The Wesfarmers Ltd (ASX: WES) share price is plummeting today after the company released its earnings for the first half of financial year 2022.
The conglomerate behind retail brands Bunnings, Kmart, and Officeworks reported its profits had slumped 14.2% while its earnings before interest and tax (EBIT) slid 12.3%.
At the time of writing, the Wesfarmers share price is $51.68, 5.9% lower than its previous close.
That’s an uptick on its morning low of $51.26 – a 6.6% tumble.
Let’s take a closer look at the news dragging Wesfarmers’ stock lower on Thursday.
Wesfarmers share price slides on COVID-19 impacts
The Wesfarmers share price has slumped after the company’s managing director Rob Scott declared the first half “the most disrupted period for our businesses since the onset of COVID-19“.
The Omicron variant’s spread caused supply chain disruptions, staffing challenges, and store closures, with the company’s crown jewel retailers hit hard.
It reported around 34,000 of its store trading days were impacted by store closures or trading restrictions. That’s around 20% of the half’s trading days.
Likely, as a result, Bunnings, Kmart, Target, and Officeworks all saw their earnings drop.
The former suffered least, with its EBIT falling just 1%. Officeworks’ was hit harder, dropping 18%. Meanwhile, Kmart and Target saw their combined earnings drop 55%.
Profits from Wesfarmers’ chemicals, energy, fertiliser, industrials, and safety businesses weren’t enough to save the embattled conglomerate.
The group’s net profits for the period ended up falling 14%.
Likely helping spur the market to bid the stock down, Wesfarmers also announced a lower interim dividend.
Shareholders will receive an 80 cent dividend for the first half – 9% lower than that of the first half of financial year 2021.
And the company’s pain isn’t over yet. It expects to report continuous COVID-19 impacts in its full-year results.
Today’s tumble sees the Wesfarmers share price trading 23% lower than its 52-week high of $67.20, reached in August.
Though, it’s now just 5.4% off its 52-week low of $49.01.
The post Wesfarmers (ASX:WES) share price plunges 6% as Omicron takes its toll appeared first on The Motley Fool Australia.
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More reading
- ASX 200 (ASX:XJO) midday update: Telstra, Wesfarmers, and Woodside report
- Wesfarmers (ASX:WES) share price on watch after ‘most disrupted period’ since COVID onset
- 5 things to watch on the ASX 200 on Thursday
- Own Wesfarmers (ASX:WES) shares? Here’s what to watch when the company reports this week
- Here’s how rich Lynas Rare Earths (ASX:LYC) shares have made ASX 200 investors over the past 2 years
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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