(Reuters) -Wesfarmers, Australia's biggest non-food retailer, reported a near 4% rise in its annual profit on Thursday, driven by strong performances in its retail divisions, and announced an additional A$1.7 billion ($1.10 billion) capital return.
The company's hardware unit Bunnings and its budget department store chain Kmart Group's low prices and offers drove sales and earnings growth. The divisions also benefited from new and expanded offerings that helped grow their addressable markets.
Earnings
at Bunnings and Kmart grew by 3.8% and 9.2%, respectively, for the full year ended June 30.
The apparel-to-lithium conglomerate's annual net profit after tax excluding significant items came in at A$2.65 billion, higher than the A$2.56 billion posted last year and in line with Visible Alpha's consensus estimate of A$2.64 billion.
The two retail divisions, the company's biggest sales contributors, continued to trade well in the first eight weeks of the new financial year.
Bunnings' sales growth was stronger compared to the second half of fiscal 2025, while Kmart's sales growth was broadly in line.
However, Wesfarmers said it expects cost pressures to persist in fiscal 2026, driven by labour, energy and supply chain costs.
Additionally, the company said cash flow from its recent asset sales — including its residual interest in Coles, divestment of Coregas and the divestment of unit WesCEF's LPG and LNG distribution businesses — made an additional capital return possible.
The shareholder return is expected to comprise a capital component of A$1.10 per share and a special dividend of A$0.40 per share.
Wesfarmers also declared a final dividend of A$1.11 per share, higher than A$1.07 apiece last year.
Separately, the company appointed Ken MacKenzie to succeed Michael Chaney as chairman, effective June 2026.
($1 = 1.5389 Australian dollars)
(Reporting by Himanshi Akhand and John Biju in Bengaluru; Editing by Maju Samuel and Alan Barona)
