John Lewis Partnership has reported an improved performance for the half year, narrowing losses before tax by 41% to £59m.
Before tax and exceptionals, losses fell to £57.3m (£66.8m a year earlier), a +14% improvement.
Liquidity was strong at £1.3b (£1.5b a year earlier), with borrowings unchanged at £650m. Cash generated from operations was £97.4m, £76.7m better than last year.
The partnership invested £196.9m in transformation and, after investments and financing activities, had an outflow of cash in the first half of £232.4m – an improvement of £238.4m YoY (the partnership generates most of its cash in the second half).
Total sales were £5.8b, up +2% YoY, while revenue was up +3%. Some 600,000 more customers shopped with the partnership in the half, taking the total number of customers to 21.4 million.
However, while Waitrose proved strong, John Lewis' sales were £2.1b, down -2%. While spending more on clothing, customers were cautious about big-ticket items in Home and Tech (down -5% and -4% respectively) – "in effect it’s been a case of ‘more loafers and fewer sofas’," says the retailer.
Interest-bearing credit is now available online, and will be available in-store from mid-October (ahead of peak), to help customers spread the cost of their purchases.
The balance between store and online purchases remained broadly unchanged, at 43% and 57% respectively. Shop sales improved by +2%, driven by increased footfall, while online declined -4% owing to weaker conversion.
The partnership says that it was hit hard by inflation last year, which increased costs by £179m – and meaning it will take a further two years to deliver the proposed Partnership Plan (in 2027/28, rather than 2025/26). It adds that plans are on track to scale efficiencies in the second half, delivering over £100m benefit by the end of the year, while investing to modernise technology and data.
While the outlook remains uncertain, the partnership expects an improved full-year financial performance compared to last year's £77.6m loss before tax, partnership bonus and exceptionals.
Sharon White, chairman, says: “The partnership is a unique model that has been tested and come through stronger many times in our 100-year history. While change is never easy - and there is a long road ahead - there are reasons for optimism. Performance is improving. More customers are shopping with us. Trust in the brands and support for the partnership model remain high.”
CEO Nish Kankiwala adds: “Our transformation to modernise our business is well under way, and I want to thank our partners for their efforts to give customers great service, quality and value when they shop with us in-store or online. There are no brands better placed than Waitrose and John Lewis to provide customers with what they need right now - to help them feel good and eat well.”
