Kmart Group has reported a 4.4 per cent lift in annual revenue to $11.1 billion, with earnings nearing the $1 billion mark. This is up from $10.6 billion, with that up 16.5 per cent from FY22.
Group earnings for FY24 were up 24.6 per cent to $958 million and represented a record for the low-price department store business, according to parent company Wesfarmers.
The group’s Kmart subsidiary drove the overall sales growth with a 6.3 per cent lift. Wesfarmers cited a continued strong response to the its owned brand Anko, which covers clothing, accessories and footwear among a wider range of categories.
Sales increased across all categories for the year, with units sold, transaction volumes and customer numbers all growing on the prior year.
Meanwhile, Target’s total sales declined 4.5 per cent for the year. The second half trading performance was relatively stronger in apparel and also included a disrupted period of sales with the changeover in Target’s general merchandise range to Anko.
The introduction of Anko products in Target has performed in line with expectations since launch.
“Earnings growth for the year reflected Kmart’s strong trading performance, including strong growth in apparel sales as a result of improvements in the product offer,” Wesfarmers reported in a trading update this morning. “Well-executed pricing strategies enabled the business to deliver profitable growth in share of wallet while extending Kmart’s lowest price positioning.”
There was also a continued focus on productivity, Wesfarmers reported, along with moderation in key input costs, including international freight, mitigated the impact of ongoing cost of doing business pressures and higher shrinkage.
“Target delivered positive earnings for the year and the second half. The integration of the Kmart and Target processes, systems and organisational structures to achieve one operating model across the two brands progressed in line with expectations.”
The sales momentum across Kmart Group continued into FY25, with sales for the first eight weeks up “broadly in line” with the second half of FY24.
“Performance in the 2025 financial year will be influenced by ongoing cost of living pressures affecting customers’ spending capacity, particularly in New Zealand, as well as by increased competitive intensity,” Wesfarmers reported. “Productivity and cost control will be a focus, with cost pressures expected to persist across operating expenses.
“The continued digitisation of sourcing, supply chain and store operations, and the integration of Kmart and Target systems, processes and organisational structures, provide the opportunity to drive greater efficiencies and to further fractionalise costs.”
“In light of the integration of Kmart and Target, and the introduction of the Anko general merchandise range to Target, sales growth metrics will be reported at a Kmart Group level only from the first half of the 2025 financial year onwards.”