The company said sales, particularly at its Kmart unit that includes Target-branded stores, improved in the second half of the year as COVID curbs eased, and that momentum has held up into the new fiscal year.
Government-mandated store closures in the first half of fiscal 2022 to quell COVID outbreaks in Australia had contributed to higher expenses and led to staff absenteeism.
Retailers including Wesfarmers have also been grappling with higher prices of raw materials and lower demand as inflation-hit consumers prioritize essential goods.
“Kmart is uniquely positioned in an inflationary environment to extend its low-price leadership and profitably grow its share of customer wallet,” the company said in a statement
Retail trading conditions have remained robust through the first seven weeks of the new financial year, Wesfarmers said.
“While general inflation remains elevated, prices for some inputs such as cotton, timber and plastic resins have moderated in recent months,” the company said.
Solid Australian retail sales data from last quarter underscored that Australian consumer spending remained robust even as inflation hit a 21-year high.
Performance at the company’s home improvement chain Bunnings, which contributed nearly two-thirds to Wesfarmers’ annual profit, improved after a weak first half, with total store sales rising 7.8% in the latter six months.
Wesfarmers net profit after tax, excluding one-off costs, fell 2.9% to A$2.35 billion ($1.64 billion), but beat analysts’ estimate of A$2.22 billion, according to Refinitiv data.
The company expects net capital expenditure of between A$1 billion and A$1.25 billion for fiscal 2023, compared with A$884 million a year earlier.
($1 = 1.4331 Australian dollars)
Source: Economy - investing.com
