Wesfarmers (WES) H1 2026 earnings summary

Executive summary

• Net profit after tax rose 9.3% year-over-year to $1,603 million, driven by strong performances in Bunnings, Kmart Group, and WesCEF, supported by productivity initiatives and digital transformation, despite cost pressures and subdued residential construction.

• Revenue increased 3.1% year-over-year to $24,212 million, reflecting disciplined execution across major divisions.

• Interim fully-franked dividend rose 7.4% to $1.02 per share, with a $1.50 per share capital management distribution paid, totaling $1.7 billion.

• Sustainability progress included a 27.8% reduction in Scope 1 and 2 emissions and achievement of 100% renewable energy in retail businesses.

• AI adoption and strategic partnerships with Microsoft and Google Cloud accelerated digital transformation and enhanced productivity.

Financial highlights

• EBIT rose 8.4% to $2,493 million; basic EPS increased 9.3% to 141.4 cents.

• Free cash flows increased 35.6% to $2,745 million, aided by asset sales.

• Net financial debt increased to $4,878 million, with Debt/EBITDA at 1.9x.

• Return on equity (excluding significant items) improved to 32.7%.

• Cash realisation ratio at 99% (down from 108% year-over-year).

Outlook and guidance

• Retail divisions are well positioned for profitable growth, leveraging omnichannel investments and strong value credentials.

• Bunnings and Officeworks sales growth in early second half in line with first half; Kmart Group sales growth stronger.

• Net capital expenditure for FY26 expected between $1,000 million and $1,300 million, excluding $274 million proceeds from Bunnings property sales.

• WesCEF’s lithium refinery ramp-up extended due to odour issues, but second half earnings expected to be slightly ahead of first half.

• Health division to focus on accelerating consumer growth and wholesale improvements.