John Lewis Partnership said investment in its stores and modernising its technology was paying off and the group is “well positioned to deliver full year profit growth”.
The group said losses before tax in the first half leapt from £29m to £87m, but this included £54m of exceptional items relating to the ongoing transformation and non-cash asset impairments. Loss before tax and exceptional items came in at £33m, up from £4m .
Investment in the John Lewis stores and Waitrose supermarkets is showing “good progress, delivering growth in sales, volumes, customer numbers and market share in the first half”, said the company.
Group sales for the 26 weeks to 26 July increased 4% year-on-year to £6.2 billion, while total revenue grew 5% to £5.4bn.
It achieved its highest recorded level of positive customer satisfaction in the half, with customer numbers up 4%, and saw “pleasing growth” in its loyalty schemes, My Waitrose (up 6%) and My John Lewis (up 13%).
A planned £30m strategic investment in operating costs targeted at technology, financial services and the central teams aims to accelerate growth.
“While this impacts profitability in the short term, it is a foundational part of our strategy for the benefit of our customers and partners,” said the company.
“Our strong cash generation and liquidity, combined with our ability to take a long-term perspective, enables us to make these crucial investments to support our growth in the second half and for years to come.
“Our investments have helped build momentum over the first half, delivering growth in sales, customer numbers, loyalty and satisfaction. We have also increased both our cash generation and productivity savings, which will drive ongoing investment in our brands.
“While we expect the macroeconomic environment to remain challenging, our momentum, coupled with exciting plans for the second half, sees us well positioned to deliver full year profit growth.”
Jason Tarry, chairman, said: “Our clear focus on accelerating investment in our customers and our brands is working: more customers are shopping with us, driving sales, and helping Waitrose and John Lewis outperform their markets. We achieved our highest recorded levels of positive customer satisfaction, a testament to the great service of our Partners.
“The investments we are making, combined with our plans for peak trading, provide a strong foundation for the remainder of the year. While we are reporting a loss in the first half, we’re well positioned to deliver full year profit growth, which we’ll continue to invest in our customers and partners.”
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