The John Lewis Partnership is showing signs of recovery with a reported £30m pre-tax loss for the first half of the year, improving from last year’s £59m loss.
- Losses before tax and exceptional items significantly improved to £5m, with a total revenue increase of 2% to £5.2bn.
- The group’s adjusted operating profit saw an uplift, returning to profit for the first time in three years, although John Lewis store profits declined due to slower merchandise sales.
- The Partnership achieved £78m in savings in the first half, contributing to £500m saved since January 2021, while remaining on track for £900m savings by 2026.
- John Lewis has been investing in customer experience and refurbishment, aiming for substantial profit growth in the second half of the year.
The John Lewis Partnership has demonstrated significant progress in its financial performance, reporting a pre-tax loss of £30m for the 26 weeks to July 27. This denotes a substantial improvement from the £59m loss recorded the previous year. The company attributed this improvement to its ongoing transformation plan, which is expected to further boost annual performance.
In terms of operational efficiency, the Partnership’s losses before tax and exceptional items saw a remarkable transition from £57m in the first half of 2023 to £5m in the current period. Revenue also climbed by 2% to reach £5.2bn, illustrating the group’s resilience amidst economic challenges. This improvement is a testament to the effectiveness of their strategic adjustments and cost-saving measures.
Despite these gains, the adjusted operating profit for John Lewis stores fell by £24m year-on-year, primarily due to a challenging market environment for general merchandise. Fashion sales were notably affected by external pressures on consumer spending and atypical weather patterns, which impacted demand for key items.
The Partnership generated £78m in savings during the first half through simplifying its business operations, bringing the total savings to £500m since early 2021. It remains committed to achieving £900m in cost reductions by 2026. These efforts highlight John Lewis’s dedication to financial health and operational efficiency.
The retailer is also heavily investing in enhancing customer experience, reviving its ‘Never Knowingly Undersold’ pledge, revamping flagship stores, and expanding both in-house and third-party brand offerings. This strategic focus is expected to foster further profitability in the latter half of the fiscal year.
The John Lewis Partnership’s transformation initiatives reflect a promising trajectory towards achieving greater profitability and operational efficiency as the year progresses.
