John Lewis has reported a decrease in losses, thanks to a successful transformation plan, signalling a positive future.
- The Partnership posted a loss of £30m before tax for the 26 weeks ending 27 July, improving from £59m the previous year.
- Losses before tax and exceptional items decreased significantly, and revenue rose by 2% to £5.2 billion.
- While John Lewis saw an increase in revenue, its adjusted operating profit faced challenges due to lower general merchandise demand.
- Major cost savings were achieved, and the brand anticipates enhanced profits in the latter half of the year.
John Lewis Partnership has demonstrated significant progress in reducing financial losses, reporting a £30 million loss before tax for the first half of the year, ending 27 July. This marks a noteworthy improvement from the £59 million pre-tax loss reported in the same period of the previous year. The company attributes this positive shift to effective implementation of its transformation plan.
The reduction in losses before tax and exceptional items was substantial, with figures improving from £57 million last year to just £5 million in the current period. Additionally, the company’s revenue saw an increase of 2%, reaching £5.2 billion. This growth is indicative of the company’s potential to generate profit despite challenging market conditions.
Despite the overall revenue growth, John Lewis experienced a decline in adjusted operating profit by £24 million year on year. This was attributed to a slower external environment for general merchandise, which impacted sales negatively. However, there was an uptick in beauty sales, contrasting with the reduced demand for fashion and home products.
The Partnership achieved further cost savings amounting to £78 million through business simplification efforts, achieving a total of £500 million in savings since January 2021. John Lewis is on track to meet its target of £900 million in cost reductions by 2026, reflecting disciplined fiscal management.
Looking forward, the Partnership is optimistic about future profits, expecting growth in the second half of the year when most profits are generated. Nish Kankiwala, CEO, highlighted the successful transformation plan and the expectation for considerable profit improvement by year-end.
John Lewis is set for a promising financial outlook, driven by its effective transformation strategy.
