Wesfarmers, Australia’s largest retailer, posted annual earnings that matched analysts' estimates, as discounting and a move to more own-brand goods helped fend off competition from German discount supermarket Aldi.
Net income was A$2.44 billion ($1.79 billion) in the 12 months ended 30 June, the Perth, Western Australia-based company said in a regulatory statement. That’s a fall of 9.3 per cent from the A$2.69 billion result a year earlier, and was in line with the A$2.42-billion average of ten analysts' estimates compiled by Bloomberg.
The result demonstrates the ongoing challenges for managing director Richard Goyder, who’s more than tripled Wesfarmers’ enterprise value since taking the top job in July 2005. He’s facing competition on multiple fronts from incoming discounters Aldi and Costco, and domestic market-leader Woolworths, which is firing 1,200 workers and ploughing A$500 million into discounting key lines.
“They’re doing all the things that have been effective in competing with discounters in Europe,” Andrew McLennan, an analyst at the Commonwealth Bank of Australia in Sydney, said by phone before the results.
News by Bloomberg, edited by ESM
