Wesfarmers continued focus on long term value

Wesfarmers Limited is showing steady growth with better profit and strong performance across its key businesses. The company is managing costs well while continuing to improve sales and expand its operations.

Wesfarmers Limited (ASX: WES) 

on 19 February 2026 shared its half year results for the period ending 31 December 2025. Statutory net profit after tax touched $1,603M which is an increase of 9.3% from the prior corresponding period. The outcome shows steady progress across major parts of the group. Earnings growth came mainly from its largest divisions which continued to perform well despite a mixed economic setting. The company also kept a strong focus on efficiency and disciplined execution of its strategy to deliver value over time.

Divisional performance 

Key retail businesses delivered solid outcomes during the half. Bunnings recorded higher sales across all categories and regions including both consumer and commercial segments. 

Kmart Group raised earnings due to strong demand for its value product ranges and tight cost control. Within that group Kmart performed better while Target faced weaker conditions especially in apparel and seasonal items. WesCEF improved results helped by its lithium business as pricing strengthened later in the period. 

The refinery project was completed below expected cost and began producing lithium hydroxide though ramp-up timing has been extended due to technical issues. 

Officeworks results matched earlier expectations but were affected by spending linked to a transformation program. Industrial and Safety maintained performance similar to last year after adjusting for prior changes. 

The health division recorded higher earnings driven by retail network growth and improved wholesale outcomes.

Cash flow capital actions 

Cash realisation remained high at 99 percent though operating cash flow declined by 3.3 percent mainly due to higher tax payments. The board approved a fully franked interim dividend of $1.02 per share which is an increase of 7.4 percent. 

Also, the group completed a capital distribution of $1.50 per share totalling about $1.7 billion to improve balance sheet efficiency while keeping flexibility for future opportunities. 

Progress was also made on sustainability targets. Safety improved with a lower injury frequency rate. Emissions for Scope 1 and Scope 2 fell by 27.8 percent supported by retail divisions reaching full renewable electricity use during the 2025 calendar year.

Outlook

The company expects to maintain satisfactory long term returns supported by strong businesses and ongoing investment. Consumer demand in Australia remains stable but cost pressures continue to affect households unevenly. Early trading in the second half showed steady performance with Bunnings and Officeworks tracking similar to the first half while Kmart Group showed stronger growth. 

Cost increases remain a challenge so divisions will continue focusing on efficiency and digital improvements including expanded use of data and AI. 

Lithium earnings in the second half are expected to be slightly higher based on contract volumes. Health operations are positioned for further gains through growth in higher margin areas. 
Planned capital expenditure for the full 2026 financial year is estimated between $1,000 million and $1,300 million excluding certain property related proceeds.

(Source: Company Report)