Wesfarmers reported EBIT growth of 7% in FY26. The company’s retail businesses had EBIT growth of 4%. Bunnings has so far shown resilient performance, but it is too early to see any downturn. Hardware sales are well correlated with mortgage refinancing, three months lagged. The downturn is imminent, around September 2026. We see same store sales slowing to 2% or so. Kmart will have low EBIT growth in FY27e as it upgrades its distribution centre. Wesfarmers will also have a step-up in interest costs of 17% in FY27e.