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Wesfarmers’ operating outlook looks resilient, but uneven—not immune to a difficult retail climate. Its FY2026 underlying earnings grew, led by Bunnings and Kmart Group, while Officeworks earnings fell sharply and the lithium business still has a production ramp-up to execute. Early FY2027 trading was positive across the retail divisions, but only covers the first seven weeks and is not a full-year forecast. Those business signals do not establish whether Wesfarmers shares are cheap or likely to rise: the company materials available through 30 September 2026 do not provide a current fair value or independent analyst consensus.
What the FY2026 results say about earnings resilience
In its full-year results released on 27 August 2026, Wesfarmers reported revenue of A$47,274 million, up 3.4%. EBIT excluding significant items rose 7.3% to A$4,493 million, and net profit after tax (NPAT) excluding significant items increased 8.3% to A$2,874 million. There were no significant items in FY2026.
The statutory comparison tells a different story: statutory NPAT fell 1.8% to A$2,874 million. The difference reflects significant items in FY2025, so the underlying and statutory comparisons should not be treated as interchangeable. For judging the latest operating trend, the growth in earnings excluding significant items is the more informative of the two comparisons.
Retail performance varied by business. Bunnings and Kmart Group grew both revenue and earnings; Officeworks grew revenue but recorded lower earnings.
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| Business | FY2026 revenue | Revenue change | FY2026 earnings | Earnings change |
|---|---|---|---|---|
| Bunnings | A$20,399 million | Up 4.1% | A$2,455 million | Up 5.1% |
| Kmart Group | A$11,751 million | Up 2.8% | A$1,109 million | Up 6.0% |
| Officeworks | A$3,698 million | Up 3.7% | A$165 million | Down 22.2% |
Wesfarmers attributed Officeworks’ earnings decline in part to one-off transformation costs, among other factors. Revenue growth alone therefore did not translate into earnings growth in every division. The reported segment figures come from Wesfarmers Limited’s 2026 full-year results.
Why the retail outlook is mixed
Management described Australian consumer demand as resilient, while saying cost-of-living pressures continued to affect households. In the 27 August 2026 results announcement, Managing Director Rob Scott also pointed to uncertainty around inflation, house prices, interest rates and tax settings as weighing on sentiment. He said higher costs of doing business were weighing on business confidence and spending. These are management’s characterisation of conditions, not an independent economic assessment.
For shareholders, the tension is that customer demand can hold up while the cost of serving customers and running stores remains elevated. Wesfarmers expected labour, energy and supply-chain costs to remain high into FY2027. It also expects its retail businesses to pursue profitable growth through value credentials, customer experience, omnichannel services, digital commerce, marketplaces and productivity initiatives. Those are plans and priorities, not evidence that cost pressure has already been offset.
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What the first seven weeks of FY2027 indicate—and what they do not
Wesfarmers’ 27 August update said Bunnings sales growth in FY2027’s first seven weeks was slightly stronger than its FY2026 second-half rate. The company noted that unseasonably dry weather in July assisted the early Bunnings comparison. Kmart Group’s sales growth was in line with its FY2026 second half, while Officeworks remained positive at a slightly slower rate.
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This is a directional early-trading update, not a quantified full-year growth forecast. It offers evidence that sales had not broadly turned negative at the start of the year, but it does not settle how demand, margins or weather comparisons will develop over the remaining weeks and months.
Lithium adds growth potential—and delivery risk
Wesfarmers’ lithium outlook depends on execution as well as market conditions. Management expected production rates at Covalent Lithium to accelerate through the second half of FY2027 as odour mitigation progressed and product qualification continued. A ramp-up can create a future earnings opportunity, but delays or difficulties in achieving reliable output and qualifying product would put that timing at risk.
At Mt Holland, spodumene production was expected to reach approximately 380kt of nameplate capacity, with WesCEF’s share approximately 190kt; around half was expected to be sold to market. These are company expectations, not confirmed production results. The distinction matters when assessing how much the project may contribute and when.
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Wesfarmers forecast FY2027 net capital expenditure of A$1.3–1.5 billion, including approximately A$200 million for the Mt Holland mine and concentrator expansion. It also said borrowing costs were expected to be higher, citing higher net debt, capital expenditure and cost of funds. Investment may support future growth, but alongside higher borrowing costs it makes execution and returns on that spending relevant to the outlook.
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The FY2026 ordinary dividend was A$2.22 per share, fully franked, up 7.8%. That is distinct from the A$1.50-per-share capital-management distribution paid in December 2025; the latter should not be mistaken for part of the ordinary dividend or assumed to recur. Neither historical payment guarantees future income. Without a share price, the dividend amount also cannot tell you the current dividend yield.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Does the operating outlook make Wesfarmers shares attractive?
Not by itself. A resilient earnings profile can support a company’s prospects, but a share’s attractiveness also depends on the price paid and on expectations already reflected in that price. The official Wesfarmers materials reviewed through 30 September 2026 do not establish a current fair-value estimate, independent analyst consensus or reliable price target. The operating results therefore support a view on the business, not a buy-or-sell conclusion about the shares.
A valuation would need dated share-price information and explicit assumptions about future earnings, share count and capital structure, together with a stated valuation method. Investors considering the outlook can track the company’s subsequent reports for:
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstall- whether Bunnings and Kmart Group sustain earnings growth as household spending and costs evolve;
- whether Officeworks earnings recover as transformation costs and other pressures change;
- whether Covalent Lithium advances production, odour mitigation and product qualification as planned;
- how capital expenditure, net debt and borrowing costs develop against management’s expectations; and
- whether future ordinary dividends are supported by earnings and cash generation rather than inferred from past distributions.
The FY2026 figures and FY2027 expectations above are from Wesfarmers Limited’s 2026 full-year results announcement, released 27 August 2026. FY2026 is historical; the FY2027 statements are dated company guidance and may change.
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