Bunnings smashes it again for Wesfarmers

Donald Miralle/Getty Images

The Bunnings warehouse business in Australia has again proved to be a major contributor to earnings growth for Wesfarmers.

In the first quarter of 2018, sales rose 11.5% to $2.96 billion compared to the same three months last year. Store-on-store growth was 10.8%.

The sales growth is well above the 2017 full year result when Bunnings earnings increased 2.6% to $1.245 billion.

Bunnings group managing director Michael Schneider says good sales growth was achieved in both consumer and commercial markets, within all trading regions and across all merchandising categories.

He says the results continue to be supported by a strategic agenda focused on driving growth, creating better experiences for both customers and the community, and strengthening the core of the business.

“Continuing to deliver on this strategic agenda will support ongoing growth for the BANZ business,” says Schneider.

During the quarter, two replacement warehouses were opened at the former Masters sites in Dandenon, Victoria, and Mt Gambier, South Australia.

Wesfarmers bought a series of Masters Home Improvement store sites across Australia when Woolworths got out of the hardware business.

Another 16 sites are under construction.

However, sales fell at Bunnings UK and Ireland Total sales for the quarter were £276 million ($A457 million), a fall of 13.8%. Store-on-store sales were down 11.9%.

“While the performance of Homebase is disappointing, we continue to be encouraged by the performance of the Bunnings pilots,” says BuSchneider.

“The BUKI team remains focused on stabilising the performance of the Homebase stores as well as delivering proof of concept for the Bunnings format.”

Wesfarmers has 244 Homebase stores and eight Bunnings in the UK. A total of 15 to 20 pilot stores are expected to be either trading or nearing completion by December 2017.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.