John Lewis profits are on recovery trail - report
John Lewis Partnership’s next set of results may not be due until next month, but for now, there are signs that the retailer’s profits are headed in the right direction.
A leaked memo from the owner of John Lewis department stores and Waitrose supermarkets talked about “fantastic” Christmas sales. Profits are being boosted both by those higher sales and by the firm’s cost-cutting drive.
It means the staff bonus might be reinstated with the company having apparently beaten its £100million full-year profit target after only 11 months.
The memo, which was seen by The Mail on Sunday, said the recent performance was a “fantastic achievement given the complexity of trading through this year”.
The less good news here for the fashion and beauty sectors is that much of the success seems to have been driven by Waitrose — the firm’s grocery arm — rather than its department stores that are major sellers of fashion and beauty.
The report said that while Waitrose sales boomed, John Lewis sales fell short as product shortages due to supply chain issues and lower footfall dampened spending.
We won’t know the full details until the official results are reported in March.
When its last set of results was released last September, they showed times were still tough for the retailer but that it had begun to recover from issues that had pre-dated the pandemic.
For the first six months of the financial year, profit before exceptional items was a low £69 million. But that was £124 million up on the 2020/21 year, when it made a loss of £55 million.
Importantly it was also an improvement on a two-year basis as the first half of 2019/20 had seen it making a loss of £52 million.
However, when exceptional items such as redundancy costs were included, it remained loss-making.
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