Wesfarmers says COVID-19 disrupts first-half operations but boosts online sales

Australian retail group Wesfarmers reported as part of its 2022 half-year results update that combined online sales for Kmart and Target were 44% higher than in the previous corresponding period.

Despite the surge in online sales, combined Kmart and Target sales were down 10% year-over-year for the first half and 5% on a two-year basis.

Wesfarmers said retail conditions and performance at Kmart Group – which is made up of Kmart, Target and Catch – continued to be affected by COVID-related disruptions and costs.

“Kmart and Target’s business performance in the first half of fiscal 2022 was significantly impacted by COVID-19 restrictions, with nearly 25% of store trading days lost due to imposed store closures. by the government,” the company said Monday.

“Business conditions improved as restrictions eased in the second quarter of fiscal 2022, but customer traffic to stores was impacted by increased community transmission of COVID-19 in some states, especially during the Christmas shopping period.

“Continued global supply chain disruptions were well managed during the period with investments made to maintain additional inventory domestically, but high levels of COVID-related absenteeism in New South Wales and in Victoria’s fulfillment centers have impacted the ability to deliver inventory to online stores along with customer demand.”

Wesfarmers said it now expects to report group net profit after tax of between A$1.18 billion and A$1.24 billion for the six months ending December 31, 2021.

In terms of profit before tax (EBT), for Kmart and Target combined, it is expected to land between 215 and 223 million Australian dollars for the half. During this time, Catch will incur an EBT loss of between $45 million and $43 million, which Wesfarmers says will reflect continued investment in team, technology, marketing and other capabilities to support growth. of the company.

For Kmart Group, EBT is expected to be between $170 million and $180 million for the semester.

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David A. Albanese