Wesfarmers went through a lot of changes during lockdowns and now it's bouncing back with its latest financial results.
👉 Background: Wesfarmers is the owner of Kmart, Target, Bunnings, Officeworks and Catch, amongst others. During lockdowns, Wesfarmers went through a world of changes.
👉 What happened: Wesfarmers announced their group earnings last week. While revenue rose by 8.5% to $36.8 billion, their profit was down 2.9%.
👉 What else: Interestingly, Bunnings' profit accounted for around 60% of Wesfarmers' total earnings. Wesfarmers' results are always interesting because it shows an insight into the broader economy.
💡Since Wesfarmers owns such a broad array of businesses, it’s a great indicator of the performance of the economy. Companies like this are called bellwether companies.
💡Wesfarmers has companies in hardware retail, in the discount department space, home and office supplies. Not to mention healthcare, industrials and mining. So when the economy is booming, Wesfarmers booms.When the economy slows down, Wesfarmers also slows.
💡Last financial year, when stimulus was pumped into the economy, Wesfarmers saw net profit jump 40%. But this financial year, Wessies saw a 2.9% decrease in net profit. So clearly the effects of inflation and higher living costs are playing games with Wesfarmers’ heart.
Sign up for Flux and join 100,000 members of the Flux family
