As it enters the third year of its transformation strategy, John Lewis has shared its unaudited results for the year ended 28th January 2023, reporting revenues of £3.79b (down -2% YoY).
Customer numbers were up +0.5% to 11.7 million. Footfall to stores grew +34% YoY (reaching 100 million for the first time since before Covid), while online traffic was down -5%. The number of customers using both channels during the year was up +4% (to 21% of the retailer's customer base). In combination, this led to a channel mix rebalancing from pandemic levels of approximately 70:30 online/shops back to almost 60:40. Over a quarter of online sales are now made through the retailer's app.
The retailer says it maintained its market share, with volumes up +1% for the year, supported by a strong performance from its branches, which were up +20%. John Lewis Trading operating profit fell by £82m to £676m, due to trading dynamics and inflation, partially offset by cost savings.
Home sales continued to prove relatively consistent with the last four years, at 27% of the sales mix.
Across the John Lewis Partnership, loss before exceptional items and tax was £78m, down from a profit of £181m last year, "principally due to economic backdrop and inflationary pressures". The loss before tax was £234m, down from a loss of £27m last year, largely due to property write downs. The impact of inflation was felt across the business, adding £179m to costs in the year.
However, the partnership says it is stepping up its transformation, having delivered over £300m of cost savings in the last two years – with a new target to save another £600m by January 2026.
Having spent £32m to support its staff with a cost of living payment and free food over winter, the partnership was left with a strong balance sheet, with £1b of cash, total liquidity of £1.5b, borrowings of £650m, and total net debts (including £1.9b of leases) of £1.7b.
"Inflation has had a big impact on the partnership and sent our costs soaring - up almost £180m on last year," says chairman Sharon White, also noting the significant impact of the write-down in the value of Waitrose stores.
"Looking ahead, the external environment is no less uncertain. Even as headline inflation is starting to fall, the partnership is still seeing costs rise.
"Faced with a more challenging environment, we have adapted the Partnership Plan to improve the profitability of the business, tripling our target for efficiency savings from £300m to c.£900m (by January 2026). The mantra for the year is cost out, margins up and customer focus."