Near-term outlook uncertain due to COVID lockdowns.

 

Officeworks has broken through the $3 billion sales barrier for the first time, assisted by the work-from-home trend and a continued increase in online transactions.

 

Full year revenue increased by 8.7 per cent to just over $3 billion with earnings up 7.6 per cent to $212 million.

 

Second half sales declined 3.2 per cent as the business began to cycle elevated sales in the prior year, growth remained strong on a two-year basis at 24.4 per cent.

 

Wesfarmers CEO Rob Scott said: “Officeworks delivered solid earnings growth for the year, supported by strong sales growth, despite some margin pressure from continued investment in price, changes in sales mix and higher supply chain costs. 

 

“Officeworks continued to invest in the every-channel model, including through a new Print and Create website, launch of a Geeks2U subscription program and development of its data and digital capabilities to provide more timely, personalised and engaging communication to customers,” he said.

 

Officeworks managing director Sarah Hunter (pictured) said the retailer’s online sales penetration reached 35 per cent (including click and collect) and recorded strong demand for products that supported customers working and learning from home.

 

During the year, Officeworks contributed more than $6.4 million to community groups and reduced emissions by 7.2 per cent and recycled over 90 per cent of waste.

 

Hunter said the company had also continued its investment in education, SME and WFH segments.

 

She added that the near-term outlook remains uncertain with changing customer shopping patterns and any future COVID-19 measures expected to impact trading conditions.

 

At a press briefing, Scott said the federal government should seriously consider offering more stimulus to struggling businesses and individuals as lockdowns in NSW and Victoria are likely to drag on until November.

 

He said Wesfarmers is currently spending $2 million to $4 million a week keeping its staff in NSW and Victoria paid during lockdowns but was happy to so as its own form of “business stimulus”.

 

He also warned of increased supply chain pressures leading to higher costs and some inventory delays. 

 

In next week's OPN newsletter:

 

Check out next week's OPN newsletter for highlights of Officeworks' The People & Planet Positive FY20 report , the first year of reporting on Officeworks' 2025 community and sustainbility commitments.