John Lewis: reorganisation costs
Reorganisation costs hit retailer John Lewis Partnership which reported a sharp fall in profit for the half year.
Profit before tax fell 53.3% to £26.6m for the six months ending 29 July after a £56.4m charge mainly for restructuring and redundancy costs.
At the John Lewis department store, operating profits rose by 10%. Waitrose operating profits fell 18% as its margin was eaten into by higher costs.
Next: The fashion retailer has upgraded its forecasts for full-year sales and profits on the back of “encouraging” trading over the past three months.
While the retail environment remained tough, Next said its prospects appeared “somewhat less challenging than they did six months ago”.
The company is predicting full-year profits of £687m-£747m, compared with its previous estimate of £680m-£740m.
Its forecast came as it reported a 9.5% fall in half-year profits to £309.4m.
Chief executive Lord Wolfson said that while the first half of the year had been “difficult” sales and profits were in line with “cautious expectations”.
He said: “Our performance in the last three months has been encouraging on a number of fronts and whilst the retail environment remains tough, our prospects going forward appear somewhat less challenging than they did six months ago.
“As a result, we are taking the opportunity to modestly upgrade our sales and profit guidance for the full year.”
Morrisons: The supermarket chain continued its recovery with a 3% rise in like-for-like sales for the six months to July.
Britain’s fourth largest supermarket chain said turnover grew by 4.8% to £8.42 billion while pre-tax profit rose from £143m to £200m.
Chairman Andrew Higginson said: “This is another good performance from Morrisons. Our seventh consecutive quarter of positive like for like means that we are able to report profit growth on growth for the first time in the turnaround.
John Ibbotson, director of the retail consultancy, Retail Vision, said: “Morrisons has quite simply been transformed over the past two years. Given the cut-throat market we’re in, this has been one of the great retail turnarounds.
“Dave Potts has kept his turnaround strategy simple and in the grocery world simple is generally best.
“By re-energising its food proposition and in putting customers first, Morrisons has regained their trust. This is another warning shot to the discounters, Aldi and Lidl.”