John Lewis issues profit warning despite ‘most successful trading day ever’

The John Lewis Partnership has reported an increase in sales for the six-week period ending December 30, but a competitive Christmas season characterised by heavy discounting across the retail industry will hit profits, it said today.

Group sales were (which include John Lewis and Waitrose) were up 2.5% year-on-year, totalling £1.96bn for the period, which included Black Friday trading.

Broken down, Waitrose’s sales were £928m, up 1.4% versus last year and up 1.5% on a like-for-like basis. John Lewis gross sales were £1.03bn, up 3.6% compared with last year and up 3.1% on a like-for-like basis.

The company said the department store chain outperformed the market by 4.5%.

Black Friday was also John Lewis’s most successful sales day in its history and contributed to the biggest ever week of sales, up 7.2% year-on-year.

Sir Charles Mayfield, chairman of the John Lewis Partnership said he was pleased with Christmas trading, but warned full-year profits will be lower as a result of increased costs linked to the devalued sterling and its commitment to being “never knowingly undersold”, their price matching promise.

He said: “The pressure on margin seen in the first half of the year has intensified because of our choice to maintain competitive prices, despite higher costs mainly due to the weaker exchange rate. This will negatively affect full-year financial results as indicated previously.

“Looking ahead to 2018/19 we expect trading to be volatile due to the economic environment and anticipate that competitive intensity will continue, driven by the structural changes taking place in the retail industry.”