Why Wesfarmers’ (ASX:WES) retail businesses are seeing robust sales growth

Summary

  • Wesfarmers Ltd (ASX:WES) said that its retail businesses were witnessing robust growth in sales.
  • The consumer firm also said that it has now begun to cycle the impact of COVID-19 from the previous year.
  • Customer demand has remained resilient, but year-on-year growth has generally moderated and been negative in some months for some businesses.

Wesfarmers Ltd (ASX:WES) on Thursday said that its retail businesses were witnessing robust growth in sales even during the challenges posed by the ongoing coronavirus pandemic. The consumer firm also said that it has now begun to cycle the impact of COVID-19 from the previous year.

At its 2021 strategy briefing day presentation, the company said that the cycling of this period would mean significant volatility in monthly sales growth results due to the disruption caused by the early lockdowns.

READ MORE: Five dividend stocks with yields above 10%

Source: ©Miflippo  | Megapixl.com

On a two-year basis, all the retail businesses have reflected their ability to provide safe and trusted environments while delivering greater value, quality, and convenience for customers, it added.

Customer demand has remained resilient, but year-on-year growth has generally moderated and been negative in some months for some businesses, due to elevated activity in the prior year.

READ MORE: What does the future of shale oil market look like?

Online growth

Wesfarmers said that the online growth has moderated as customer traffic to stores has increased, and online penetration has reduced but remained above pre-COVID levels.

Cash flow

The company said that its portfolio of cash-generative businesses gave strong returns on capital. The cash generation was underpinned by strong earnings growth. It also said that the divisional cash generation from continuing operations averaged 103% over the 5 years to FY19.

Source: © Herrbullermann  | Megapixl.com

Stock performance

On Wednesday, 2 June 2021, the shares closed at AU$56.28, up 1.61%, or 0.89 points as against the previous closing on Wednesday, 1 June 2021. Wesfarmers is in competition with Treasury Wine Estates Ltd (ASX:TWE) and Metcash Ltd (ASX:MTS, Woolworths Group Ltd (ASX:WOW), Coles Group Ltd (ASX:COL), among others in the consumer sector.

READ MORE: Australia’s March quarter GDP rises 1.8%, beats estimate

Comment


Disclaimer

Ad

GET A FREE STOCK REPORT


Top Penny Picks under 20 Cents to Fit Your Pocket! Get Exclusive Report on Penny Stocks For FREE Now.


   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK