Wesfarmers has achieved just a small rise in half year profit as heavy losses from its coal mines almost derailed strong gains at Coles and Bunnings.
All of the company's retail businesses, which also include Officeworks, Kmart and Target, delivered higher earnings in the six months to December.
Bunnings was the star performer, delivering 13 per cent earnings growth, while food and liquor sales at Coles rose six per cent from a year earlier.
Managing director Richard Goyder said the retail businesses enjoyed strong Christmas trade.
But falling coal prices and demand for lower quality coal sent Wesfarmers' resources business to a $118 million loss.
Mr Goyder said the coal operations let down the group, but there were no plans to offload the loss-making business.
"It is a disappointing result from resources," he said.
"It would be unWesfarmers-like to sell a business at the bottom of the cycle."
Wesfarmers has also combined Kmart and Target into a new department stores division, which will be headed by current Kmart managing director Guy Russo.
Target managing director Stuart Machin will shift to a yet to be identified senior role in July.
Mr Goyder said the new division would allow for stronger coordination and could lead to some Target stores being converted into Kmart stores, and vice versa.
"It certainly means we will put the right store in the right place in future," he said.
"There will also be significant benefits in sourcing (products)."
Wesfarmers shares dropped $2.12, or 4.86 per cent, to $41.50.
OptionsXpress market analyst Ben Le Brun said it was clear investors did not feel the company's earnings growth justified its already premium share price.
"The market may have been looking for more growth to justify Wesfarmers' expensive price tag," he said.
"What undermined the result was the performance of its resource businesses which swung to a loss, but the retail component did very well."
Retail rival Woolworths reports its half year results on Friday.
COAL LOSSES WEIGH ON WESFARMERS PROFIT
* Net profit up 1.2pct to $1.393b
* Revenue up 4.7pct to $33.462b
* Interim dividend up 2.0 cents to 91 cents, fully franked
* Coles earnings up 5.6pct to $945m
* Bunnings/Officeworks earnings up 13.8pct to $760m
* Target/Kmart earnings up 9.5pct to $393m
* Industrials earnings down 87.8pct to $22m
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