Wesfarmers has reported a major drop in profit for its last fiscal year, hurt by the ongoing troubles at its Target department store banner.
For the year, net profit was down by more than 83% to A$407m, although excluding one-off charges, profit declined by 7.7% to A$2.25bn. Overall revenues, however, rose by 5.7% to A$66bn.
The Coles group saw revenues grow by 2.7% to A$39.2bn, but profits were up just 4.3% – the weakest growth since it was acquired by Wesfarmers in 2007. The Home Improvement division saw revenues jump up 21.4% to A$11.6bn, while profits were up a strong 11.6%.
Its Kmart department store recorded a sales rise of 14% to A$5.2bn, while Target saw its sales edge up 0.5% to A$3.46bn. And finally, the Officeworks banner saw its sales grow by 8% to A$1.85bn.
MD Richard Goyder noted: “This growth was offset by weak underlying performance in Target as well as the cost of restructuring activities following the creation of the department stores division in February 2016 to provide a stronger platform for future growth.”
Wesfarmers also said fiscal 2017 would be a “transitional” year for Target, as the banner undertakes changes to improve its results.