Australian low-price retailers Kmart and Target, as well as private label Anko, have together driven a 6.6 per cent lift in earnings before tax for the first half of FY26, hitting $683 million.
The trio form part of the Kmart Group, housed under Australian conglomerate Wesfarmers.
The jump in earnings for Kmart Group joins a $300 million lift in sales for the first half, landing at $6.3 billion, compared to the same time in FY25. Comparable sales were up 2.8 per cent.
This sales jump follows similar growth trajectories in recent years by other low-price entities, including Shein and Temu. For the full-year 2024, Shein’s Australian sales rose by around 20 per cent to $1.22 billion.
According to Wesfarmers, Kmart Group continued to benefit from its value credentials and the uniqueness of its Anko products in a competitive environment, which also reportedly included growth in customer numbers. This also includes Anko’s ‘one-up’ and ‘two-up’ price tiers, a merchandising tactic aimed at moving customers from a base-level product to a slightly higher-priced option.
Wesfarmers noted this tactic is generating stronger customer demand, with home and general merchandise being the best performing categories here.
Kmart drove most of the sales boom in the half, which was partially offset by Target, which was impacted by more difficult trading conditions in apparel, particularly in seasonal categories.
Wesfarmers added that Target’s performance was also affected by a severe weather event that resulted in the closure of a Target distribution centre in Queensland, disrupting stock flow and sales.
The overarching company, which also manages the likes of Officeworks, Bunning and Priceline Pharmacies, also noted that Kmart saw robust sales during periods of high promotional activity, including Black Friday and Christmas.
As for the earnings growth, Wesfarmers claimed this reflected disciplined pricing and inventory management in a competitive environment.
“Productivity benefits were delivered through the continued digitisation of operations across stores, sourcing and supply chain,” Wesfarmers reported. “These benefits mitigated ongoing cost of doing business pressures and the impact of investments in projects that are expected to deliver long-term operational benefits.”
Kmart Group also invested in its store network in the last half, with seven stores trading in Kmart’s new ‘Plan C’ plus format at the end of the half, and the digitisation of store processes advanced through the expansion of RFID capabilities.
The Plan C plus format involves relocating checkouts from the centre of the store back to the front, and adds new entry/exit gates, with refreshes in fashion and beauty spaces.
In logistics, Kmart Group is also constructing a new ‘Next Gen’ omnichannel facility in New South Wales, commissioned two new customer fulfilment centres and implemented a new online order management system.
“Kmart Group continued to expand its addressable market, including through the launch of a third-party marketplace which has demonstrated early positive trading results,” Wesfarmers reported. “Strong engagement with Kmart’s digital platforms also resulted in further growth in monthly active app users to more than 1.6 million.”
Anko’s expansion into new markets also appears to be progressing well, with Wesfarmers claiming joint venture stores in the Philippines have received an encouraging customer response, supporting three new store openings during the half.
Kmart opened one net new store and Target closed two stores during the period. There were 446 stores across Kmart and Target as at December 31, 2025.