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Wesfarmers Results: Kmart and Bunnings Shine, Catch Losing Millions

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By Published On: February 16, 20240 Comments

Catch is proving to be a thorn in Wesfarmers’ side as first half results reveal a massive loss.

Overall, Wesfarmers experienced minimal YoY growth. Revenue grew 0.5 percent to $22.7 billion, and a 3 percent increase on its statutory net profit after tax to $1.4 billion for the half-year ended 31 December 2023.

However, despite this largely positive outlook, online marketplace Catch is an outlier with a whooping 29.7 percent decline in sales, with a loss totalling over $41 million for the first half of FY24 including restructuring costs. During the restructure, the company removed unprofitable ranges to enable focus on its ongoing range of around 28k in-stock items and over 11m marketplace items.

Wesfarmers states this represents continued improvement relative to $48m loss in 2H23 and $75m loss in 1H23.

Bunnings and Kmart delivered growth for the company, earning $9.9 billion and $4.8 billion in sales respectively. Bunnings sales improved 1.7 percent on the first half of 2023, and Kmart delivered a sales growth of 7.8 percent. 

“In Bunnings, solid sales and earnings growth continued during the half, with growth in both consumer and commercial sales,” said Wesfarmers Managing Director Rob Scott. “Kmart Group delivered record earnings for the half, reflecting the market-leading value credentials of its Anko products as well as actions to drive cost efficiencies, and a moderation in some key input costs.”

Officeworks’ results were also positive, growing 1.8 percent to $1.6 billion, which the company says was supported by continued growth in stationery, art, education, Print & Create and technology categories. 

Onepass launched “significant enhancements to its offer” during the period, with new retail partnerships and unique online and in-store benefits providing additional value for customers. It recorded over 210 million Digital interactions, and is attributed to over $1.6 billion in sales for the half.

Wesfarmers Managing Director Rob Scott said overall the results were “pleasing”.

“Wesfarmers’ retail divisions executed strongly during the half, responding effectively to changing customer needs as households increasingly sought out value,” Mr Scott said. “In this environment, the retail divisions’ core offer of everyday products with market-leading value credentials supported growth in sales and customer transaction numbers. 

“The retail divisions have benefitted from a proactive focus on productivity and efficiency initiatives in recent years, which together with their unique sourcing capabilities and strong supplier partnerships enabled them to mitigate ongoing cost pressures and provide compelling value for customers during the half.”

H2 is looking promising for the company, with plans to continue to invest in its existing operations and in the development of platforms for long-term growth and shareholder value creation. 

Catch will continue to focus on executing strategies for a more profitable proposition, including curating the in-stock range to focus on in-demand categories, accelerating growth of the marketplace, leveraging the OnePass program, further optimising fulfilment and transport efficiencies to improve customer experience, and continued strong cost controls. Catch will also launch a media advertising platform, with trials planned for the second half. Despite these measures, Catch is expected to remain loss making in the second half, but with losses continuing to reduce relative to the first half.

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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