- Wesfarmers has released its results for the 2020 financial year.
- Officeworks and Bunnings saw an increase in revenue as Australians worked and learned from home.
- “Earnings in Bunnings and Officeworks were particularly strong and demonstrated the ability of these businesses to rapidly adapt to the changing needs of their customers,” Wesfarmers Managing Director Rob Scott said.
- Visit Business Insider Australia’s homepage for more stories.
Wesfarmers has released its 2020 financial year results, with Bunnings and Officeworks being the top performers.
The company – which owns Kmart, Bunnings, Officeworks, online marketplace Catch, and Target – reported a profit after tax of $1.69 billion for the year ending June 30, 2020.
While the coronavirus pandemic had an impact on the group’s operations, sales were strong across Officeworks and Bunnings. Those brands in particular thrived as Australians spent more time working and learning from home.
Officeworks saw a 20.4% increase in revenue to $2,787 million, bolstered by a growth in sales both online and in store. Earnings were also up 13.8% to $190 million. During the second half of the financial year, sales at Officeworks were also boosted by a strong demand for home office supplies, technology and education products.
Revenue at Bunnings rose 13.9% to $14.9 billion, supported by customers who have spent more time working and doing projects at home during the pandemic. The company’s earnings also increased 13.9% to $1.85 billion.
“Earnings in Bunnings and Officeworks were particularly strong and demonstrated the ability of these businesses to rapidly adapt to the changing needs of their customers,” Wesfarmers Managing Director Rob Scott said in a statement.
Across the group’s retail businesses – excluding Catch – there was an online sales growth of 60%. And when looking at total online sales across the group, including Catch, this increased to $2.1 billion. “This reflects the significant investment in digital capabilities over recent years, as well as the continued change in customer preferences towards online shopping,” Scott added.
Kmart Group – which includes Target, Kmart and Catch – saw a 7.2% rise in revenue to $9.2 billion. But the company recorded earnings losses of $222 million. While Target was impacted by lower sales, Catch experienced growth across its in-stock and marketplace offerings.
Target particularly struggled during the pandemic, with Wesfarmers announcing it would convert a number of Target stores into Kmart stores.
“In May 2020, a number of actions were announced to accelerate the growth of Kmart and address the unsustainable financial performance of Target,” Scott said. “Good progress has been made on executing these actions, including agreeing the terms for the conversion of 27 Target stores to Kmart stores and completing the first phase of restructuring the Target store support office.”
The earnings results come after Wesfarmers revealed the conditions under which its stores would operate under the stage four restrictions in Melbourne. Bunnings stores in Melbourne’s metro region remain open to tradies, while Kmart and Target stores in Melbourne aren’t servicing customers in-store. Officeworks is open for business customers but not retail customers.
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