Stock prices for Wesfarmers, Australia’s largest non-food retail company, tumbled Thursday following disappointing early second-half performance results that reflected ongoing financial pressures on consumers.
The retail conglomerate’s shares dropped as much as 6.1% to A$83.85 during early trading hours, representing the company’s steepest single-day decline since late October 2025, according to data as of 2353 GMT.
Rising inflation and increased operational expenses continue to squeeze both household and business budgets across Australia, forcing consumers to reduce spending even as foot traffic remains steady at major retail locations.
During the initial six weeks of the second half, Wesfarmers’ leading division Bunnings maintained sales growth matching its first-half performance of approximately 4%, while Kmart exceeded its previous 3.2% growth rate from the six-month period ending in December.
However, both divisions failed to meet market projections for second-half expansion.
“Australian consumer demand remains solid, but cost-of-living pressures are being felt unevenly across the economy and impacting many households,” Wesfarmers stated.
“The recent interest rate rise and uncertainty regarding the outlook for inflation and interest rates are affecting consumer sentiment, while higher operating expenses are weighing on business confidence and spending.”
For the six-month period concluding December 31, hardware chain Bunnings achieved earnings growth of 5% reaching A$1.39 billion ($978.42 million), while discount retailer Kmart posted growth exceeding 6% to A$683 million.
The company’s WesCEF division, encompassing chemicals, energy, fertilizer and Covalent Lithium operations, also delivered 18% earnings growth during the first half.
Company officials indicated they anticipate sequential earnings increases from their lithium operations in the second half.
“While earnings are ahead, the strength in lithium had been well understood by the market,” noted Citi analysts in their research commentary.
Robust earnings performance across multiple divisions enabled the conglomerate to achieve first-half net profit after tax of A$1.60 billion, surpassing both the Visible Alpha consensus projection of A$1.56 billion and the previous year’s result of A$1.47 billion.
The Perth-headquartered company, which jointly operates the Covalent lithium project in Western Australia alongside Chile’s SQM, announced an interim dividend of 102 Australian cents per share, up from 95 Australian cents per share in the prior year.
