TIDM45GD
RNS Number : 9509T
Lewis(John) PLC
12 January 2017
12 January 2017
Christmas trading (six weeks to Saturday 31 December) and
outlook
Highlights include:
-- Total sales at the John Lewis Partnership were up 4.9% versus last year(1) to GBP1,913.0m
-- John Lewis and Waitrose traded well, with both brands gaining market share(2)
-- Waitrose gross sales (excluding fuel) were GBP914.9m, up
4.8%(1) versus last year and up 2.8%(1) on a like-for-like
basis
-- John Lewis gross sales were GBP998.1m, up 4.9%(1) versus last
year and up 2.7%(1) on a like-for-like basis
-- Profit before Partnership Bonus, tax and exceptionals for the
year ending 28 January 2017 is expected to be up on last year with
lower pension accounting charges offsetting trading pressures on
profit
-- Partnership strategy will be accelerated to prepare the business for the challenges ahead
-- The Partnership Board will decide on the level of Bonus in
March, but, given the challenging market outlook and the importance
of investment for the future, the Board expects that bonus is
likely to be significantly lower than last year
Sir Charlie Mayfield, Chairman of the John Lewis Partnership,
commented:
"We traded strongly over Christmas with sales up nearly 5% and
both Waitrose and John Lewis grew market share. Sales were
particularly strong in the areas that have been the focus for
product innovation this year, such as our Waitrose 1 premium range
and John Lewis own-brand fashion. Our multi-channel capability has
again proved its worth with online accounting for 40% of total
sales in John Lewis.
Operational performance was good across both brands. That was
thanks to the hard work and commitment of Partners across shops,
distribution and head offices. As a result we sustained a strong
sales performance right through to Christmas and enabled a great
start post Christmas including Clearance.
However, although we expect to report profits up on last year,
trading profit(3) is under pressure. This reflects the greater
changes taking place across the retail sector. We expect those to
quicken, especially in the next 12 months as the effects of weaker
Sterling feed through. We will now accelerate aspects of our
strategy. This will involve a period of significant change,
investment and innovation to ensure the Partnership's success."
1The six week period this year to 31 December 2016 includes an
additional trading day in shops compared to last year's six week
period to 2 January 2016. Excluding the additional trading day
like-for-like sales were broadly level in Waitrose and
approximately 2% up in John Lewis
2 Kantar Grocery data for Waitrose / BRC for John Lewis
3 Trading profit is Profit before Partnership Bonus, tax and
exceptionals and before pension costs
Waitrose
-- Gross sales (excluding fuel) up 4.8% to GBP914.9m, with like-for-like sales up 2.8%
-- Convenience sales up 13.1% and 4.8% on a like-for-like basis
-- Online grocery sales up 0.8%
Sales were driven by demand for premium items with the Waitrose
1 'best in class' range seeing a 21.4% uplift.
Hospitality was another key area of growth with sales up 4.9% as
customers took advantage of the growing casual dining and snacking
opportunities in our shops, while little Waitrose convenience shops
also saw strong like for like growth.
A successful promotional campaign, including one day only offers
for Christmas staples, such as champagne and crackers, proved
effective in building footfall in the pre-Christmas period.
Online grocery sales saw an uplift in both orders and average
order value, while John Lewis Click and Collect sales which were
picked up in Waitrose shops were up 18.5% on last year.
John Lewis
-- Gross sales up 4.9% to GBP998.1m, with like-for-like sales up 2.7%
-- Online sales up 11.8%, representing 40.0% of sales. Shop sales up 0.8%.
-- Across product areas: Home up 2.7%, Fashion up 7.2% and EHT up 4.8%
John Lewis outperformed the market again this year, with the
pattern of trade characterised by the three peaks of Black Friday,
Christmas week, and Clearance.
The channel mix saw a continued shift to online. Shopping on
mobile phones was the online channel of choice with sales up 80.9%,
accounting for 37% of all traffic. Click & Collect sales were
up 14.5%, accounting for 52% of online orders. Shop sales were up,
trading well pre-Christmas as last-minute shopping delivered a
record week for branches.
Operationally, our supply chain performed particularly well; on
the Saturday after Black Friday our Magna Park distribution centre
processed 33% more units than the equivalent in 2015.
Outlook
We expect the full year Profit before Partnership Bonus, tax and
exceptionals to be ahead of last year. However, that will be
substantially as a result of lower pension accounting charges
following the changes to our pension scheme from April 2016 and the
effect of favourable market interest rates used to determine the
pension accounting costs at the beginning of this year. Trading
profit is under pressure as a result of wider changes taking place
in retail.
The most obvious of these changes is the channel shift from
shops to online. The other major influence is pricing, where
deflation continues in food and non-food, despite rising input
costs as a result of weakness in the Sterling exchange rate.
These factors are significant for the outlook where we expect
both inflationary cost pressures and competition to intensify in
the market as a whole. The rate of retail market sales growth may
slow and the rate of profit growth that is achievable will be
affected by margin pressure.
We have decided to comment on Bonus implications at this stage
because the Partnership's strong Christmas trading, and the
likelihood of higher reported profits, risk overshadowing the
importance the Board is placing on the challenging market outlook,
our determination to maintain a strong balance sheet and our
commitment to accelerating our strategy. The precise level of the
Bonus will be decided as usual in March, but, in view of these
factors, it is likely to be significantly lower than last year.
John Lewis Partnership plc will report its full year results
ended 28 January 2017 on 9 March 2017.
ENDS
Enquiries:
Citigate Dewe Rogerson
Simon Rigby
Jos Bieneman
Telephone: 020 7638 9571
John Lewis Partnership
Simon Fowler, Director of Communications
Telephone: 07710 398460
Katie Robson, Senior Manager, Group External Communications
Telephone: 07764 675608
John Lewis
Peter Cross, Director, Communications
Telephone: 07764 697674
Gillian Taylor, Head of External Communications
Telephone: 07919 057931
Waitrose
Christine Watts, Communications Director
Telephone: 07764 676414
Graeme Buck, Head of Communications
Telephone: 07703 379561
Notes to editors
The John Lewis Partnership - operates 48 John Lewis shops across
the UK, johnlewis.com, 351 Waitrose shops, waitrose.com and
business to business contracts in the UK and abroad. The business
has annual gross sales of over GBP11bn. It is the UK's largest
example of an employee-owned business where all 88,900 staff are
Partners in the business.
Waitrose - winner of the Best Supermarket(1) and Best Food
Retailer(2) awards- currently has 351 shops in England, Scotland,
Wales and the Channel Islands, including 62 convenience branches,
and another 27 shops at Welcome Break locations. It combines the
convenience of a supermarket with the expertise and service of a
specialist shop - dedicated to offering quality food that has been
responsibly sourced, combined with high standards of customer
service. Waitrose also exports its products to 58 countries
worldwide and has eight shops which operate under licence in the
Middle East. Waitrose's omnichannel business includes the online
grocery service Waitrose.com, as well as specialist online shops
including waitrosecellar.com for wine.
(1) Which? Customer Survey
(2) Verdict Customer Satisfaction Awards
John Lewis - John Lewis operates 48 John Lewis shops across the
UK (34 department stores, 12 John Lewis at home and shops at St
Pancras International and Heathrow Terminal 2) as well as
johnlewis.com. John Lewis 'Best In-Store Experience 2016', 'Best
Clothing Retailer 2016', 'Best Electricals Retailer 2016', 'Best
Furniture Retailer 2016', 'Best Homewares Retailer 2016' and 'Best
Click & Collect Retailer 2016'(1) , typically stocks more than
350,000 separate lines in its department stores across fashion,
home and technology. Johnlewis.com stocks over 280,000 products and
is consistently ranked one of the top online shopping destinations
in the UK. John Lewis Insurance offers a range of comprehensive
insurance products - home, car, wedding and event, travel and pet
insurance and life cover - delivering the values of expertise,
trust and customer service expected from the John Lewis brand.
(1) Verdict Consumer Satisfaction Awards 2016
You can follow John Lewis on the following social media
channels:
www.johnlewis.com/twitter
www.johnlewis.com/facebook
www.johnlewis.com/youtube.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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