Wesfarmers delivered a solid FY25 with revenue rising 3.4% to $45.7 billion and net profit after tax up 14.4%, driven by strong performances in Bunnings and Kmart. The company announced increased dividends and a proposed capital return, while navigating challenges in its lithium business and ongoing cost pressures.
- Revenue up 3.4% to $45.7 billion
- Net profit after tax increased 14.4% to $2.9 billion
- Strong sales and earnings growth in Bunnings and Kmart
- Lithium refinery ramp-up causes losses in WesCEF segment
- Proposed $1.50 per share capital management distribution subject to approval
Robust Retail Growth Anchors Group Performance
Wesfarmers Limited reported a resilient full-year performance for FY25, with consolidated revenue climbing 3.4% to $45.7 billion and net profit after tax (NPAT) surging 14.4% to $2.9 billion. The retail powerhouses Bunnings and Kmart Group were key contributors, leveraging their strong value propositions and productivity initiatives to drive sales and earnings growth despite a challenging economic backdrop.
Bunnings sustained its market leadership with a 3.3% revenue increase to $19.6 billion, underpinned by its everyday low price strategy and expanded commercial offerings. Meanwhile, Kmart Group grew revenue by 2.9% to $11.4 billion, benefiting from digitisation efforts and integration of Kmart and Target systems, alongside the rollout of its new Plan C+ store format.
Mixed Fortunes in Industrial and Chemicals Segments
The Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) division faced headwinds, reporting a 9.3% decline in earnings to $399 million, largely due to subdued lithium prices and ramp-up costs at the newly completed Kwinana lithium hydroxide refinery. Despite these challenges, the refinery achieved a significant milestone with its first product in July 2025, signaling a transitional FY26 as production scales over the next 18 months.
Industrial and Safety experienced a slight revenue dip of 1.2% amid restructuring efforts aimed at resetting cost bases and improving customer service. The sale of Coregas for $770 million, completed in July 2025, marked a strategic portfolio action to sharpen focus on core businesses.
Sustained Investment in Growth and Sustainability
Officeworks and Wesfarmers Health divisions delivered solid growth, with Officeworks increasing revenue by 3.8% and Wesfarmers Health by 5.5%, driven by network expansion and enhanced omnichannel capabilities. The Group continued to invest heavily in digital transformation, AI, and retail media networks to enhance customer experience and operational efficiency.
On sustainability, Wesfarmers reported a 9.3% reduction in Scope 1 and 2 emissions and increased rooftop solar capacity, reflecting ongoing commitment to climate resilience and ethical sourcing. Indigenous employment parity was maintained, and women held 50% of board and leadership roles, underscoring the Group’s focus on social responsibility.
Capital Management and Outlook
Wesfarmers declared a fully franked ordinary dividend of $2.06 per share, up 4%, and proposed a capital management distribution of $1.50 per share, comprising a $1.10 capital component and a $0.40 special dividend, pending shareholder approval. The Group maintained a strong balance sheet with net financial debt stable at $4.2 billion and successfully issued a $1.1 billion Eurobond to diversify its debt profile.
Looking ahead, Wesfarmers anticipates ongoing cost pressures from labour, energy, and supply chain factors but plans to mitigate these through continued productivity and digitisation initiatives. The lithium segment remains volatile, with ramp-up costs expected to weigh on FY26 earnings. Nonetheless, the Group is well positioned to capitalize on growth opportunities in retail, health, and lithium sectors while maintaining disciplined capital allocation.
Bottom Line?
Wesfarmers’ FY25 results underscore resilience and strategic agility, but lithium market volatility and cost pressures will test its growth trajectory in FY26.
Questions in the middle?
- How will lithium price volatility impact WesCEF’s profitability in the coming years?
- What are the risks and timelines associated with the proposed capital management distribution?
- How effectively can Wesfarmers leverage AI and digital investments to offset rising cost pressures?