First Impression: Wesfarmers (WES) FY16 Result

Coles EBIT in line with our estimate- up 4.3% to $1860m, margin Steady 4.7%. Food and Liquor comparative sales growth 4.1% (3.9% pcp) | Bunnings EBIT up 11.6% to $1214m and EBIT margin 10.5% as compared to 11.4% in pcp. Store-on-store sales growth 8.1% | Office Works up 13.6% to $134m with EBIT margin 7.2% as compared to 6.9% in pcp | Department Stores EBIT down 47.3% to $275m with K Mart up 8.8% to $470m and Target ($50m) .K Mart EBIT margin 9.1% (9.5% pcp) and comparable sales growth of 10.5% (4.6% in pcp). Target EBIT margin (1.4%) as compared to 2.6% in pcp and comparable sales growth (0.4%) | Industrials down 86.7% to $47m- performance remains challenging: Resources ($310m), WesCEF up 26.2% to $294m, Industrial and Safety down 10% to $63m | Net operating cash flow down 11.2% to $3365m.