Profits have tripled at the John Lewis Partnership as the retail group made “solid” progress on its turnaround but staff still missed out on a bonus for the third year in a row.
Sales at the group rose 3% year on year to £12.8bn in the 52 weeks ended 25 January, with all the growth coming from the Waitrose chain. The supermarket continued positive momentum to increase sales 4% to £8bn as volumes climbed 2.6%, while sales at John Lewis remained flat at £4.8bn.
Pre-tax profits before exceptional items jumped from £42m to £126m last year as margins improved 0.9 percentage points to 2%.
Waitrose posted adjusted operating profits of £227m, up £122m from the previous year as sales growth combined with productivity improvements. But adjusted operating profits declined by £16m at John Lewis to £45m as the department store chain struggled to perform in a “challenging environment”.
Despite the improved performance across the group, JLP said it had decided to prioritise further investment in the turnaround rather than pay staff a bonus, with £600m earmarked for the ongoing transformation.
New chairman Jason Tarry called the results “solid” and said it showed customers were responding well to investments in quality products, value and service.
“We have made good progress with much more still to do,” he added.
“Looking forward, I see significant opportunity for growth from both our Waitrose and John Lewis brands,” Tarry said. “Our focus will be on enhancing what makes these brands truly special for our customers.
“This will involve considerable catch-up investment in our stores and supply chain, underpinned by a strong focus on the core elements of great retail, delivered by our brilliant partners.
“Our distinct partnership model stands out as a key competitive differentiator, enabling us to adopt a long-term perspective. I am confident with the transformation momentum in the partnership, we remain well placed to drive further growth in the year ahead and over the longer term – creating a partnership that our customers and partners are truly proud of.”
Elsewhere in the results statement, JLP highlighted the success of a relaunched Waitrose No1 range, which contributed to a 5.9% rise in own label sales. The group said it continued a focus on lowering prices in supermarkets, with £61m invested during the year.
JLP warned the wider macroeconomic environment would continue to be challenging this year but said it was confident in the strategy.
The group forecast further improvements in profitability in 2025/26.
Outgoing CEO Nish Kankiwala said: “I want to thank all of our partners for their incredible hard work this year and our customers for their loyalty, both of which led to continued momentum through the year and especially over Christmas. Tripling our profit is a significant testament to the progress of our transformation – focused on delighting customers while continuing to deliver efficiency improvements, thereby laying the foundations for long-term sustainable growth.
“Both brands are showing good momentum. Our strategic investments in product innovation, quality, service and value have yielded significant improvements in customer satisfaction, attracting more customers to shop with us.
“As I step down after two years as CEO, which has been an incredible privilege, I want to express my gratitude to our partners who have shown amazing commitment to our refreshed plan. I am confident in the partnership’s continued success given the momentum we have built and the opportunities that lie ahead.”
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