Wesfarmers Falls Most in Two Years on Target ForecastDavid Fickling
Wesfarmers Ltd., Australia’s largest private-sector employer, fell the most in more than two years in Sydney trading after it said earnings from its Target department stores would drop as much as 43 percent from a year earlier.
The stock declined 2.9 percent, the most since February 2011, to close at A$42.93. The Perth-based company forecast that the unit would report earnings before interest and tax of A$140 million ($136 million) to A$160 million in the 12 months ending June. The business posted Ebit of A$244 million in the previous year, according to data compiled by Bloomberg.
Australia’s retail industry has struggled as the strength of the currency has driven down the cost of imported goods. The country’s central bank has cut interest rates to a record low 2.75 percent amid unemployment that’s risen by half a percentage point to 5.5 percent over the past year. Target had seen poor sales performance in the second half and higher levels of shoplifting and stock loss, the company said.
“While Target’s earnings for the current year will be disappointing, appropriate action has been taken,” Wesfarmers said in a statement attributed to managing director Richard Goyder.