Australian retail group Wesfarmers Ltd.'s fiscal year 2019 adjusted profit missed expectations despite a 13.5% jump following a disappointing performance by its Kmart retail chain.
Profit from continuing operations excluding an A$300 million impairment from retail unit Target came at A$1.94 billion, up from A$1.71 billion a year ago but below S&P Global Market Intelligence mean consensus estimate of A$2.02 billion.
Attributable diluted EPS from continuing operations came in at A$1.72, up from A$1.25 in 2018. Revenue from continuing operations rose 4.3% to A$27.92 billion.
Operating profit for Bunnings Australia and New Zealand grew 8.1% to A$1.63 billion, which was partially offset by a 13.7% drop in Kmart Group operating profit to A$540 million.
"Trading conditions moderated during the year and the performance of the Kmart Group was below expectations," Wesfarmers Managing Director Rob Scott said in a statement.
"Despite this moderation, Kmart has continued to invest in its customer offer and price leadership position that has delivered strong returns over the long term, while also making good progress in improving its digital offer. Although key elements of the Target range continue to grow, its trading results highlight that Target's customer offer requires ongoing repositioning."
On a non-adjusted basis, net profit attributable soared 360% to A$5.51 billion, compared with last year's A$1.20 billion, due to the impact of divestment of Coles Group Ltd. as well as the sale of its Bengalla, Kmart Tyre & Auto Service and Quadrant Energy Australia Ltd. units in fiscal 2019.
In addition, Wesfarmers issued a final ordinary dividend of 78 Australian cents per share, which brought the full-year ordinary dividend to A$2.78. The dividend is payable Oct. 9 to shareholders of record as of Sept. 2.
