John Lewis Partnership sees profits triple

(Sharecast News) - The John Lewis Partnership posted a surge in annual profits on Thursday, but ruled out reinstating staff payouts. The employee-owned department store chain, which owns upmarket supermarket Waitrose, said sales rose 3% in the year to 25 January to £12.8bn.

Pre-tax profits tripled before exceptional items to £126m, while pre-tax profits jumped 73% to £97m. The operating margin strengthened 0.9 percentage points to 2.0%.

New chair Jason Tarry, who succeeded Sharon White in December, said: "These are solid results which show that our customers are responding well to our investment."

Waitrose saw sales rise 4.4% while volumes increased 2.6%. Sales in the department stores were largely flat at £4.8bn.

The retailer said it had been a "pivotal" year for the department stores, as the chain refocused on customer service, better product ranges and value, including bringing back the Never Knowingly Undersold motto.

The slogan - first coined in 1925 - was axed in 2022, after John Lewis struggled to maintain the price promise in the face online-only competitors.

However, despite the improved profits, John Lewis opted against paying its annual bonus to staff, arguing that it would instead continue to invest in turning the business around after a difficult few years. The last time John Lewis paid a bonus was the year to January 2022.

Instead, the partnership said it would spend up to £600m on business transformation this year.

Tarry, who worked at Tesco for more than 30 years, said: "I see significant opportunity for growth from both our Waitrose and John Lewis brands.

"Our focus will be on enhancing what makes these brands truly special for customers. This will involve considerable catch-up investment in our stores and supply chain, underpinned by a strong focus on the core elements of great retail."