Wesfarmers slides as consumer spending warning overshadows profit beat (updated)

WESFARMERS

26/08/2026 23:18

FY profit rises more than 8% to A$2.87 billion 
Final dividend A$1.20/share vs A$1.11 last year
Bunnings Group MD to retire in February 2027
Recasts paragraph 1, adds details and analyst comment throughout
Aug 27 (Reuters) - Australia's Wesfarmers WES.AX warned on Thursday that pressure on household budgets could weigh on spending, overshadowing a bigger-than-expected rise in annual profit and sending its shares to their lowest in nearly three months in early trading.
The country's biggest non-food retailer said sales growth at its home improvement products segment, Bunnings, was slightly stronger in the first seven weeks of fiscal 2027, compared with a 3.9% rise recorded in the second half of last year. 
However, that missed a Visible Alpha consensus estimate of a 4.8% rise for the first half of fiscal 2027, according to analysts at Jefferies.
"Uncertainty regarding the outlook for inflation, house prices, interest rates and tax settings are affecting consumer sentiment, while higher costs of doing business are weighing on business confidence and spending," Wesfarmers said in a statement.
Shares of the apparel-to-lithium conglomerate fell as much as 2.5% to A$81.16 by 0007 GMT, hitting their lowest since June 10, while the broader benchmark S&P/ASX 200 index .AXJO was down 0.4%.
Net profit after tax excluding significant items rose more than 8% to A$2.87 billion ($2.06 billion) for the full year ended June 30, beating the Visible Alpha consensus estimate of A$2.84 billion.
High interest rates and cost-of-living pressure drove more customers towards Wesfarmers' value-led retail offers, supporting sales volumes at discount retailer Kmart Group and Bunnings.
Earnings at WesCEF, the chemicals, energy and fertilisers division, were hurt by a lag in passing through higher ammonia prices after the Middle East conflict, though this was partly offset by stronger lithium earnings.
Wesfarmers said it expects business costs to remain high in fiscal 2027, driven by labour, energy and supply-chain expenses.
It forecast net capital expenditure of A$1.30 billion to A$1.50 billion for the year, above the Visible Alpha consensus estimate of A$1.07 billion.
The 112-year-old conglomerate declared a final dividend of A$1.20 per share, higher than A$1.11 apiece last year.
Separately, Wesfarmers said Bunnings Group Managing Director Michael Schneider would retire in February 2027 and be succeeded by finance chief Rachael McVitty.
"It is never positive to see a highly effective executive depart, but Wesfarmers has a solid track record of management succession," Jefferies said.

 ($1 = 1.3945 Australian dollars)

 (Reporting by Shivangi Lahiri in Bengaluru; Editing by Joyjeet Das and Subhranshu Sahu)
 ((Shivangi.Lahiri@thomsonreuters.com;))