John Lewis upgrades profit outlook but delays end of transformation plan

For the 26 weeks to July 29, 2023, John Lewis Partnership reported losses before tax narrowing 41% to £59m, and a 14% improvement in losses before tax and exceptional items to £57.3m.

Partnership sales topped £5.8bn in the half, up 2% year on year, and cash generated from operations was £97.4m – £76.7m better than the previous year.

However, the retailer said a combination of inflationary pressures and greater-than-expected investment requirements for its transformation means it will be delaying the Partnership Plan to 2027/28 rather than 2025/26.

The retailer said that an extra 600,000 customers shopped with the Partnership in the first half, taking total customers to 21.4 million.

Sales at John Lewis were £2.1bn, down 2%, however a 3% increase in fashion and a 2% increase in beauty sales were strong points.

The department store reported customers being more cautious around purchasing big-ticket items such as home and tech, down 5% and 4% respectively.

Store-versus-online sales percentages were unchanged at 43% and 57% respectively, while customers coming to shops used the in-store experiences and services provided – with personal styling appointments up 27%, beauty services up 23% and nursery consultations up 17%.

Waitrose sales were up 4% to £3.7bn, with sales growth driven by a 9% increase in the average price item, while volumes were down 5%.

The retailer invested more than £100m in price in the half, which led to improving volume trends.

Waitrose also improved availability during the period to 96.1%, up from 93.6% in the previous year.

In terms of outlook, John Lewis said that off the back of stronger Waitrose trading and further efficiency savings in the second half, it expects full-year financial performance to improve to a £77.6m loss before tax, Partnership bonus and exceptionals.

Chair of the Partnership Sharon White said: “The Partnership is a unique model that has been tested and come through stronger many times in our 100-year history. While change is never easy – and there is a long road ahead – there are reasons for optimism. Performance is improving. More customers are shopping with us. Trust in the brands and support for the Partnership model remain high.”

Chief executive Nish Kankiwala said: “Our transformation to modernise our business is well underway, and I want to thank our Partners for their efforts to give customers great service, quality and value when they shop with us in store or online. There are no brands better placed than Waitrose and John Lewis to provide customers with what they need right now – to help them feel good and eat well.”