Wesfarmers annual profit climbs as lockdowns boost in-home consumption

(Reuters) – Australia’s Wesfarmers Ltd (WES.AX) posted a 7.4% rise in annual profit on Thursday on higher sales at its hardware and stationery chains during coronavirus lockdowns, as customers took on more in-home projects and set up workspaces at home.

Retailers across the globe have seen a sharp rise in demand for home improvement products, personal appliances and packaged food products, particularly on their online platforms, as customers purchased more products for use within their homes.

This drove the Group’s retail businesses to clock total online sales growth of 60% during the year, excluding Catch, its online marketplace division.

Excluding one-time charges, the retail-to-chemicals conglomerate reported a net profit after tax from continuing operations of A$2.08 billion ($1.50 billion) for the full year ended June 30, compared with A$1.94 billion a year earlier.

The figure was higher than an estimate of A$2 billion, according to analysts polled by Refinitiv.

“Customers spending more time working, learning and relaxing at home led to very strong demand in some product categories,” the company said, adding that government stimulus measures also had a positive impact on retail sales.

The company’s office supplies division saw high demand from customers establishing and maintaining their work and learning spaces at home, Wesfarmers said, while home improvement projects helped Bunnings, its hardware segment.

However, the company said the outlook was highly uncertain, with sales expected to be impacted as government stimulus measures are gradually removed and given that strong sales in the second half likely pulled sales forward from fiscal 2021.

Recent government-mandated restrictions in Victoria and New Zealand are expected to impact sales, Wesfarmers added.

Revenue from continuing operations for the year rose 10.5% to A$30.85 billion.

($1 = 1.3908 Australian dollars)

Reporting by Rashmi Ashok and Anushka Trivedi in Bengaluru; Editing by Devika Syamnath and Rashmi Aich

Our Standards:The Thomson Reuters Trust Principles.

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