Wesfarmers financial performance and dividend trends

Wesfarmers reported its 2026 fiscal year results, showing a 3.4% revenue increase to $47.2 billion and an 8.3% rise in underlying net profit to $2.7 billion. Growth was largely attributed to the Bunnings and Kmart retail divisions, while Officeworks saw a 22.2% decline in earnings due to transformation costs. The company declared a total annual dividend of $2.22 per share for FY26, a 7.8% increase from the previous year. Additionally, Bunnings Group Managing Director Michael Schneider announced his intention to retire in February.

Detailed FY26 figures show Bunnings recorded revenue of $20,399 million, a 4.1% increase, with earnings rising 5.1% to $2,455 million. This growth was supported by digital sales and the launch of an AI-powered assistant, ‘Buddy’. Kmart Group revenue rose 2.8% to $11,751 million, with earnings increasing 6.0% to $1,109 million; notably, Kmart’s digital sales and marketplace gross merchandise value grew 19.7% in the second half of the year. Conversely, Officeworks earnings fell 22.2% to $165 million, despite a 3.7% revenue increase, due to one-off transformation program costs.

Following these results, financial projections for FY27 suggest a potential annual dividend of approximately $2.40 per share, representing a grossed-up yield of 4.3 percent, with further increases projected for FY28. Early trading data for the first seven weeks of FY27 indicates that Bunnings' sales growth has remained slightly stronger than the second half of FY26, while Kmart Group sales growth has remained consistent.

Despite these strong retail earnings and an underlying earnings per share growth of 8.3% in FY26, Wesfarmers’ share price has experienced a decline of approximately 10% since the start of 2025. Bunnings Warehouse continues to be a primary performance driver, contributing over 50% of the conglomerate’s operating profit.