The John Lewis Partnership (JLP) has published its unaudited interim results for the 26 weeks ended 27th July 2024, stating that its transformation process remains "on track", and that it is set to deliver significantly higher profits for the full year.
Waitrose delivered strong profit growth, while sales at John Lewis were down -3% to £2b. Gross margins in the latter improved by 0.5 percentage points in H1, yet adjusted operating profit – the partnership started reporting the performance of its brands by his metric this half, to "better reflect the way resources are managed" – declined by £24m due to lower sales and investment in partners and technology to enhance customer service.
In response to that development, customer numbers grew to 13.6m (up +2%), and customer experience ratings and overall Net Promoter Score (NPS) both was improvement.
Lower demand for big-ticket items saw softer Home sales during the period.
The partnership has outlined a strategy to drive growth and productivity in John Lewis, with further investment to enhance customer experience – including the reimagining of the retailer's historic Never Knowingly Undersold pledge (see related), investment in store upgrades and expansions, and investing in its own and third-party brands, such as an exclusive collaboration with Collagerie on homeware.
It also plans to put more staff on the shop floor, and develop what they can offer through training and technology such as digital headsets and payment points throughout the stores, not just at the till.
"The half saw us make good progress on developing complementary businesses for the long term," adds JLP. "We secured planning consent to develop rental homes in Bromley, with two more sites in the planning process. We refreshed the brand of our financial services business, now John Lewis Money, which continued to grow customers in the half, up +2%.
"In the upcoming months, customers will further benefit from an acceleration in our investment programme. This includes the completion of refurbishments in John Lewis stores Oxford Street, High Wycombe and Cheadle, and nine Waitrose stores, as well as the opening of a new convenience store in Hampton Hill in London.
"In addition, both brands will showcase new-season products and services in the run-up to the key Christmas trading period. Our customers will also be able to benefit from our linked loyalty hub, which will reward shopping at both of our brands.
"We have historically delivered the majority of our profits in the second half of the year. Despite the environment for our customers remaining uncertain, we expect to maintain financial momentum from consistent delivery of our multi-year transformation. As a result, we are confident that full year pre-exceptional profits should be significantly above the £42m we reported in 2023/24."
JLP CEO Nish Kankiwala adds: “These results confirm that our transformation plan is working and we expect profits to grow significantly for the full year, a marked improvement from where we were two years ago.
“We continue to invest heavily in quality, service and value, and customers are responding well – with more people shopping with us and customer satisfaction increasing. While we have much more to do, we’re well set up for a positive peak trading period and on target to significantly improve our performance for the full year.”
