Wesfarmers Faces Lithium Market Volatility Amid Strong Profit and Dividend Announcement
Wesfarmers Limited reported a robust 2025 financial year with a 14.4% increase in net profit after tax to $2.926 billion and declared fully franked dividends of $2.06 per share. The conglomerate also unveiled a proposed $1.50 per share capital management distribution, pending shareholder approval.
- Revenue up 3.4% to $45.7 billion
- Net profit after tax increased 14.4% to $2.926 billion
- Fully franked dividends maintained at $2.06 per share
- Proposed $1.50 per share capital management distribution
- Significant progress on sustainability targets and digital transformation
Financial Performance Highlights
Wesfarmers Limited has delivered a strong financial performance for the year ended 30 June 2025, with revenue rising 3.4% to $45.7 billion and net profit after tax surging 14.4% to $2.926 billion. This growth was underpinned by solid earnings contributions from key divisions including Bunnings, Kmart, Officeworks, and Wesfarmers Health. Meanwhile, Chemicals, Energy and Fertilisers and Industrial and Safety divisions faced earnings pressures due to subdued commodity prices and restructuring costs.
The company declared fully franked dividends totaling $2.06 per share, consistent with the prior year, reflecting a commitment to returning value to shareholders. Additionally, the Board proposed a capital management distribution of $1.50 per share, comprising a $1.10 return of capital and a $0.40 fully franked special dividend, subject to shareholder approval at the upcoming Annual General Meeting.
Operational and Strategic Developments
Wesfarmers’ diversified portfolio continues to be a key strength, balancing out sector-specific challenges. Bunnings Group maintained its market leadership in home improvement retail, achieving a 3.3% revenue increase and a 3.8% rise in earnings before tax. Kmart Group recorded a 2.9% revenue increase and a 9.2% earnings growth, driven by strong value credentials and productivity gains.
Officeworks expanded its technology and business-to-business offerings, while Wesfarmers Health saw a 5.5% revenue increase and a 28% rise in earnings, supported by growth in its Consumer segment, including Priceline Pharmacy. The Chemicals, Energy and Fertilisers division marked a milestone with the completion and commissioning of the Kwinana lithium hydroxide refinery, achieving first product in July 2025, although earnings were impacted by volatile lithium prices and lower commodity prices.
Industrial and Safety experienced a slight decline in earnings, influenced by restructuring costs and a softer market environment. Notably, the sale of Coregas for $770 million was completed in July 2025, reflecting Wesfarmers’ disciplined portfolio management.
Sustainability and Digital Transformation
Wesfarmers has made significant strides in sustainability, reducing Scope 1 and Scope 2 greenhouse gas emissions by 9.3% across the Group. Bunnings, Officeworks, and Kmart have achieved or are on track to meet their 100% renewable electricity targets by the end of 2025. The Group’s sustainability initiatives are integrated into its capital allocation and operational strategies, with a focus on long-term value creation.
Digital transformation remains a priority, with increased use of data analytics and artificial intelligence to enhance customer experience and operational efficiency. The OnePass membership program continues to drive cross-shop activity and incremental sales, while the newly launched OneReach retail media network is positioned to unlock new revenue streams.
Governance and Leadership
The Board announced leadership changes, including the appointment of Aleksandra Spaseska as Managing Director of Kmart Group and John Gualtieri as Managing Director of Officeworks. The Board remains committed to strong governance practices, risk management, and fostering a diverse and inclusive workplace. Wesfarmers continues to emphasize ethical sourcing, community engagement, and advancing reconciliation with Aboriginal and Torres Strait Islander peoples.
Looking ahead, Wesfarmers is well positioned to navigate economic uncertainties, supported by a strong balance sheet, disciplined capital management, and a portfolio of resilient businesses with attractive long-term growth prospects.
Bottom Line?
Wesfarmers’ 2025 results underscore its resilience and strategic agility, but investors will watch closely the lithium project ramp-up and shareholder vote on capital returns.
Questions in the middle?
- How will the ramp-up of the Covalent lithium project impact future earnings amid volatile lithium prices?
- What are the implications of the proposed capital management distribution for Wesfarmers’ balance sheet and investment capacity?
- How effectively will Wesfarmers leverage AI and digital initiatives to sustain competitive advantage and growth?