Company Interview / Wesfarmers leans on Bunnings & Kmart amid cost crunch

Key points:

Wesfarmers (ASX:WES) achieves strong first-half growth, led by Bunnings and KmartFocus on productivity and digital investment, including major AI partnershipsOfficeworks undergoes transformation for future growth under new leadershipMount Holland lithium project advances despite technical commissioning issues

Wesfarmers (ASX:WES) posts a strong first half, with net profit rising over 9%, surpassing analyst expectations. Rob Scott states the conglomerate’s key divisions—Bunnings and Kmart—are central to delivering lower prices amid inflationary pressures, supporting Australian households facing cost-of-living concerns. He highlights the company's continued focus on productivity, leveraging scale and operational improvements to offer value to customers and provide robust returns for shareholders.

Scott outlines Wesfarmers’ digital expansion, particularly through AI partnerships with technology leaders including Google, Microsoft, and OpenAI. He sees these strategic alliances as pivotal in boosting productivity, digitising business processes, and giving team members advanced tools to work smarter rather than replacing jobs. Scott maintains these initiatives are about improving productivity, enabling the company to pursue more opportunities with existing resources, rather than cutting jobs.

The CEO addresses weakness at Officeworks, acknowledging it as the only division not to achieve earnings growth in the period. He notes proactive moves to transform Officeworks' business model, aligning it with the efficiency and digital strengths of Bunnings and Kmart, under new leadership from former Kmart CEO John Gualtieri. On the lithium front, Scott comments on progress at the Mount Holland project, with mining and concentration ramping toward capacity despite technical challenges at the refinery stage.