John Lewis is back in the black as loafers not sofas drive recovery

John Lewis partnership reported record full-year sales of £12.4bn, up by £176 (1%) on the previous year. Profit before tax and exceptional items was £42m an improvement of £120m year-on-year- compared to a £78m loss in 2022/23, and profit before tax was £56m a £290m improvement year on year. 

Sales at John Lewis came in at £4.8bn and were down 4% on last year despite the brand attracting a record 13.4 million customers. Operating profit was £689m which was a £13m improvement year-on-year. Waitrose sales were up 5% at £7.7bn with a total operating profit of £1,064m improved by £170m. 

Robyn Duffy, senior analyst for consumer markets at RSM UK comments on today’s results from John Lewis: ‘John Lewis is back in the black, but there are hard yards to travel before the retailer can confidently hail a return to form. Divisionally, the food arm of the business Waitrose is performing well after recovering from last year’s availability issues, but needs a cash injection to really compete with its rivals. As for John Lewis, the theme is ‘loafers, not sofas’ with consumers spending more on themselves rather than their homes.   

‘Despite being one of Britain’s best-known brands, John Lewis has struggled to stay relevant in recent years. A fast-moving economic environment has meant changing consumer habits have got the better of the business as the brand seemed to be missing the mark, whilst direct competitors Next and Marks and Spencer have prospered. 

‘As an employee-owned business that has failed to pay bonuses for several years, and with competitors seeing strong growth, the pressure is now on for new leadership to bring positive change. New CEO Nish Kankiwala has announced a ‘back-to-basics’ approach and plans to put retail back at the heart of John Lewis. Noise around the proposed housing and financial services plays have quieted for now, both interesting ideas but in a challenging retail environment a return to core values is needed. 

‘Only a few years ago John Lewis was the go-to retailer for the middle classes as it delivered quality at the best possible price. Returning to core values alongside investment in technology mirrors the fundamentals from other high street success stories and should help the business further improve margin. With 2023’s positive results behind them, John Lewis has the chance to return to the playing field and with the British public loving an underdog, they’ve everything to play for.’