Kmart logged its record first-half earnings on strong growth in apparel sale, while Bunnings benefited from strong consumer and commercial demand.

"Wesfarmers' retail divisions executed strongly during the half, responding effectively to changing customer needs as households increasingly sought out value," Wesfarmers Managing Director Rob Scott said.

The company, however, warned of persisting inflationary pressures in fiscal 2024

"Domestic cost pressures in Australia and New Zealand are expected to remain elevated, driven by inflation, labour market constraints and wage cost increases, and energy and supply chain costs," the company added.

Wesfarmers' net profit after tax was A$1.43 billion ($927.93 million) for the six months ended Dec. 31, compared with A$1.38 billion a year earlier. That beat analysts' expectations of A$1.34 billion, according to LSEG data.

Revenue from the Bunnings division increased 1.7% to A$9.96 billion, while that from Kmart rose 4.8% to A$5.99 billion.

The Perth-headquartered firm declared an interim dividend of 91 Australian cents per share, up from 88 Australian cents apiece declared last year.

For the first five weeks of the second-half, both Bunnings and Kmart logged upbeat performance, the company added.

($1 = 1.5411 Australian dollars)

(Reporting by Sameer Manekar in Bengaluru; Editing by Anil D'Silva and Shinjini Ganguli)

By Sameer Manekar