Wesfarmers Boosts Profit 14.4%, Unveils $1.50 Capital Return Plan

Strong Financial Performance Amid Challenging Conditions

Wesfarmers Limited has reported a robust statutory net profit after tax (NPAT) of $2.926 billion for the full year ended 30 June 2025, marking a 14.4% increase over the previous year. Excluding significant items, NPAT rose 3.8% to $2.653 billion, underscoring the resilience of the Group’s diversified portfolio in a complex economic environment.

Managing Director Rob Scott highlighted the Group’s ability to deliver value despite cost pressures faced by consumers and businesses alike. "Our divisions have successfully executed growth and productivity initiatives, enabling continued investment in customer value propositions while mitigating rising costs," he said.

Retail Divisions Drive Growth

The retail arms of Wesfarmers remain the cornerstone of its financial success. Bunnings Group posted a 3.3% revenue increase to $19.6 billion and a 3.8% rise in earnings, supported by strong demand in both consumer and commercial segments. The rollout of new store formats and expanded product ranges, alongside digital enhancements such as the Hammer Media retail media network, have bolstered customer engagement and sales.

Kmart Group also delivered solid results with revenue up 2.9% to $11.4 billion and earnings rising 9.2%. The group’s focus on value, productivity, and digital transformation, including the expansion of RFID technology and app usage, helped offset inflationary pressures. Officeworks continued its steady growth trajectory, increasing revenue by 3.8% and earnings by 1.9%, driven by technology and Print & Create categories.

Industrial and Chemicals Segments Face Headwinds

Wesfarmers Chemicals, Energy & Fertilisers (WesCEF) experienced a 9.3% decline in earnings to $399 million, impacted by subdued lithium prices and operational ramp-up costs at the Kwinana lithium hydroxide refinery. The refinery reached a key milestone with first product achieved in July 2025, marking the transition to production ramp-up over the next 18 months. Despite short-term losses, the project is expected to yield satisfactory long-term returns.

The Industrial and Safety division saw a slight earnings decline of 4.6%, influenced by restructuring costs and softer market demand. However, operational improvements in the second half suggest a positive trajectory ahead.

Capital Management and Portfolio Optimization

Wesfarmers completed the sale of Coregas for $770 million shortly after the fiscal year-end, reflecting ongoing portfolio discipline. The Group also announced a fully-franked final dividend of $1.11 per share, bringing the full-year dividend to $2.06 per share, a 4% increase.

In a notable move, the Board proposed a capital management distribution of $1.50 per share, comprising an expected $1.10 capital return and a $0.40 fully-franked special dividend, pending Australian Taxation Office approval and shareholder vote. This initiative aims to optimize the capital structure while preserving capacity for future growth opportunities.

Digital Transformation and Sustainability Progress

Wesfarmers continues to invest heavily in digital capabilities, leveraging AI and data analytics to enhance customer experience and operational efficiency. The OnePass membership program and the newly launched retail media network are key pillars in driving incremental sales and cross-division engagement.

On sustainability, the Group reported improvements in safety metrics and a 9.3% reduction in Scope 1 and 2 emissions. Bunnings and Officeworks achieved 100% renewable electricity targets, with Kmart Group on track to follow suit by year-end.

Outlook

Looking ahead, Wesfarmers acknowledges ongoing cost pressures and geopolitical uncertainties but remains confident in its portfolio’s resilience. The retail divisions are expected to continue growing market share through value-led propositions and omnichannel investments. The lithium project’s ramp-up phase will be closely watched, as will the execution of productivity initiatives across all divisions.