Wesfarmers Reports Strong Performance: Diversification Strategy Drives Growth

Australian conglomerate Wesfarmers Ltd announced a 4.8% increase in annual profit,How to get back the money cheated by foreign exchange trading slightly above analyst expectations, due to a cost-of-living surge driving consumers towards budget department chain Kmart.

This performance demonstrates the diversified earnings of the country's largest listed conglomerate, whose operations include pharmacies, office supplies chain stores, industrial chemicals businesses, and plans to venture into lithium mining starting next year. Wesfarmers stated it expects to profit from the new lithium business in the first half of 2024.

Over the years, most of the company's profit growth has come from hardware chain giant Bunnings in real estate and renovations. However, according to the announcement, profits from this chain grew only by 1.2% till June this year, as shoppers became more cautious and deliberate with renovations and their spending.

Kmart emerged from the COVID-19 trading restrictions unscathed, its operations unrelated to Bunnings, attracting cost-conscious consumers and boosting its profit growth by more than half.

Wesfarmers CEO Rob Scott said, as people increasingly focus on value and as Kmart strives to improve quality, it has attracted many new consumer groups. Now, people enjoy buying clothes at Kmart, where previously they may only have shopped for household goods.

Wesfarmers' total profit reached 2.47 billion Australian dollars, slightly above the average forecast of 2.45 billion Australian dollars by data aggregation platform Visible Alpha.

Wesfarmers shares rose 2.5% in early trading, while the overall market fell by 1%, as the company altered consumption patterns, and analysts acknowledged its performance as better than expected.

Analysts at Macquarie Group pointed out in a client report that the performance was in line with expectations, or even better, noting that consumer drag seemed to have less impact.

The company announced a final dividend of 1.03 Australian dollars per share, making the total dividend for this year 1.91 Australian dollars, higher than last year's 1.80 Australian dollars.

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