The Wesfarmers Ltd (ASX: WES) share price is up 1% after the retail ASX share announced its FY25 result.
Wesfarmers is the parent company of businesses like Kmart, Bunnings, Officeworks, Priceline and Target.
Wesfarmers FY25 result
Here are some of the highlights from the 12 months to 30 June 2025:
- Revenue climbed 3.4% to $45.7 billion
- Underlying EBIT (EBIT explained) up 4.9% to $4.2 billion
- EBIT increased 11.9% to $4.5 billion
- Underlying net profit after tax (NPAT) up 3.8% to $2.65 billion
- Net profit after tax climbed 14.4% to $2.9 billion
- Full-year dividend up 4% to $2.06 per share
- Proposed capital distribution $1.50 per share
The reason why reported profit was higher than underlying profit because this year included $279 million of additional profit, predominately being the $233 million gain on the sale of Coregas.
The $1.50 per share capital distribution relates to the sale of certain assets, including its interest in Coles Group Ltd (ASX: COL), Coregas and the WesCEF LPG and LNG distribution businesses.
Wesfarmers also announced that Ken MacKenzie will become the new Wesfarmers chair at the 2026 AGM in October 2026 with the retirement of Michael Chaney.
Let’s look at the individual performances of the businesses.
Individual business performance
Bunnings Group and Kmart Group, the two biggest profit generators of the portfolio, were the biggest drivers of the overall result thanks to their everyday low prices and market-leading offers.
Bunnings Group revenue rose 3.3% to $19.6 billion and earnings climbed 3.8% to $2.3 billion. Wesfarmers said its solid trading reflected its strength and resilience of its offer, with growth across home repair and necessity products. There were also higher commercial sales. Its return on capital (ROC) rose to 71.5%, up from 69.2%.
Kmart Group revenue increased 2.9% to $11.4 billion and earnings jumped 9.2% to $1.05 billion. The company saw growth across all categories, particularly home. It has also focused on productivity and cost control, through systems and processes, as well as ongoing digitisation of operations across stores, sourcing and supply. The Kmart ROC improved to 67.6%, up from 65.7%.
WesCEF (chemicals, energy and fertilisers) revenue climbed 7.8% to $3 billion and earnings fell 9.3% to $399 million. Revenue was helped by higher fertiliser sale volumes and lithium sales, though the earnings worsened due to lithium losses and lower ammonia earnings.
Officeworks revenue went up 3.8% to $3.6 billion and earnings increased 1.9%. Officeworks performed well in a number of sales periods, including Black Friday, end of financial year and back to school. Productivity and cost management were offset by cost inflation and the closure of Circonomy.
Industrial and safety revenue dropped 1.2% and earnings declined 4.6%.
Wesfarmers Health revenue improved 5.5% and earnings jumped 28% to $64 million. Priceline Pharmacy headline network sales increased by 11.9%, thanks to network expansion and price reductions on key value lines.
Outlook for the Wesfarmers share price
The company said it’s well positioned to deliver satisfactory returns to shareholders over the long-term, with a portfolio of high-quality, resilient businesses.
In the current economic environment, its retail businesses are “well positioned to profitably grow their share of customer wallet, supported by strong value credentials, broad customer appeal and growing addressable markets.”
In the first eight weeks of FY26, Bunnings sales growth was stronger than the second half of FY25 (which was 3.4%). Kmart Group sales growth was “broadly in line” with the FY25 second half (which was 3.9%).
Officeworks sales continued to grow broadly in line with the FY25 second half (of 3%).
Wesfarmers Health is “well positioned to improve long-term earnings”.
I’d call Wesfarmers shares one of the best businesses on the ASX, though it certainly comes with a valuation that reflects that quality too.
I’d be very happy as a shareholder, though I’m not sure how much higher the price/earnings (P/E) ratio can go before it’s unsustainable.
