During 1HFY19.
Wesfarmers confirmed the renaming of its department store division to Kmart Group, which the company says, reflects the transition of both Kmart and Target away from the traditional department store model.
The announcement accompanied the Group’s financial results for first half FY19. Kmart Group revenue increased 0.8% for the half year to December 31 2018. Earnings for the division of $383 million were 3.8% lower than the prior corresponding period.
Wesfarmers managing director, Rob Scott said, “Kmart’s earnings declined compared to the pcp primarily due to weaker sales in apparel, lower growth in non-seasonal products and increased store and supply chain expenses. Despite these challenges, customer feedback remained strong and was reflected in increased units sold during the half.
“Target delivered earnings growth through improved trading margins reflecting increased levels of direct sourcing, an improved sales mix and the befit of annualised cost saving received during the half.”
Revenue for Bunnings Australia and New Zealand (BANZ) increased 5.2% for the half, with earnings up 7.9%.
“Earnings growth was achieved despite a moderation of trading conditions and high levels of growth in the prior corresponding period and was assisted by an ongoing focus on cost control and continued favourable commercial property market conditions resulting in further positive outcomes on property divestments,” Scott said.
Officeworks revenue increased 8.2% with earnings increasing 11.8% to $76 million. Strong sales growth was achieved across stores and online.
“Higher earnings growth was achieved through a combination of strong sales growth, an improvement in sales density and effective management of gross margin and CODB.
In its outlook statement, the company said cost of living pressures and a decline in residential housing conditions have contributed to a moderation in retail spending growth and consumers remain cautious and value conscious. Despite this, the Group’s retail divisions will further develop the digital offer, while improving operating efficiencies.