The Wesfarmers Ltd (ASX: WES) share price is under the spotlight after reporting its solid FY26 result.
Wesfarmers is the owner of Kmart, Anko, Bunnings, Beaumont Tiles, Officeworks, Priceline and several other businesses including lithium mining.
FY26 result
Here are the highlights for the 12 months to 30 June 2026:
- Revenue grew 3.4% to $47.3 billion
- Underlying EBIT (EBIT explained) rose 7.3% to $4.5 billion
- Underlying net profit increased 8.3% to $2.87 billion
- Operating cashflow declined 6.5% to $4.27 billion
- Statutory profit down 1.8% to $2.87 billion
- Full-year dividend per share up 7.8% to $2.22
What happened in the result?
The company reported that its underlying earnings was driven by its three core businesses, with productivity benefits a key factor for the profit margin increasing.
Bunnings revenue increased 4.1% to $20.4 billion and earnings before tax (EBT) grew 5.1% to $2.45 billion. There was sales growth for both consumer and commercial customers, and all product categories and regions.
Kmart Group revenue rose 2.8% to $11.75 billion and EBT rose 6% to $1.1 billion. Seasonal categories experienced challenging conditions, while a worsening of the exchange rate hurt Kmart New Zealand earnings.
WesCEF revenue increased 5.9% to $3.1 billion and EBT jumped 18.5% to $473 million. There was a big uplift in earnings for the lithium division.
However, while Officeworks revenue grew 3.7% to $3.7 billion, its EBT declined 22.2% to $165 million.
Wesfarmers Health saw revenue rise 9.1% to $6.47 billion and EBT climbed 18.8% to $76 million.
Industrial and safety revenue declined 12% to $1.76 billion and its EBT declined 26.9% to $76 million. Excluding the divested Coregas, the division would have reported a small increase of revenue and earnings.
The statutory profit figure was boosted in FY25 by $273 million in FY25 because of the sale of Coregas and other factors.
Outlook for the Wesfarmers share price
Wesfarmers says it’s well-positioned to deliver satisfactory returns to shareholders over the long-term, while noting the ongoing impact on households and businesses. Its retail divisions play “an important role in the community” through offering everyday low prices.
The company said high operating costs are expected to remain in FY27, so it will continue to execute its productivity agendas to help offset this.
In the first seven weeks of FY27, Bunnings sales’ growth was slightly stronger than the 4% rate seen in the second half of FY26. Kmart Group sales growth was in line with the FY26 second half rate of 2.3% and Officeworks total sales growth was positive, but below the FY26 second half growth rate of 2.8%.
Wesfarmers also noted that, together with partner SQM, it’s going to invest to double lithium production, which will also help lower unit operating costs and accelerate cash flow, for a cost of between $645 million to $715 million.
I think Wesfarmers is one of the best operators in Australia, with impressive retailers and growing market shares. If I were a shareholder, I’d be happy with both the underlying earnings and dividend growth.
With it trading at around 30x earnings, I wouldn’t say it’s amazing value. I think it could compound earnings over the long-term and help deliver shareholder returns.
