John Lewis Partnership posts sharp fall in annual profit
The John Lewis Partnership has seen a sharp fall in annual profit in what it described as a challenging year.
In the 12 months to 26 January, pre-tax profit before exceptional items was down 45.4% to £160 million. The decline was mainly due to a 55.5% fall in operating profit to £114.7 million at the John Lewis department store chain where there were weaker home sales, a lower gross margin and a rise in IT and property related costs.
In contrast, the Partnership’s Waitrose supermarket chain increased its operating profit by 18.1% to £203.2 million after it benefited from improved gross margins in the period.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: “In line with expectations set out in June, our Partnership profits before exceptionals have finished substantially lower in what has been a challenging year, particularly in non-food.”
Mayfield said the company had awarded its staff a bonus of 3% of annual pay which would enable the business to continue to reduce debt, maintain its level of investment and retain cash reserves in light of continuing economic uncertainty. This compares to a bonus of 5% in the previous year.
Looking ahead, he added: “We expect 2019 trading conditions to remain challenging but are confident in our strategic direction and customer offer across both brands.”
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