John Lewis Partnership released its half-year results on Thursday and said its “transformation [is] on track” with a “marked improvement” in the H1 numbers and the retailer set to “deliver significantly higher profits for the full year”.

Partnership sales including VAT — which takes in those from its eponymous department stores both physically and online, as well as its Waitrose supermarkets — topped £5.9 billion, up 2% year-on-year. And total revenue also rose 2%, to £5.2 billion.

While it was still lossmaking, the loss before tax/exceptional items was only £5 million, much better than the £57 million a year earlier. And the loss before tax also narrowed from £59 million to £30 million.

Its operating profit margin increased 1.2 percentage points and cash generated from operations was £147 million, up £97 million year-on-year.

The company expects further profit growth in H2, when it typically generates a significantly higher proportion of its profit.

It highlighted 0.5 million new customers gained in the half to reach 23.1 million, “with customer satisfaction up”, and loyalty programmes also saw growth, with 17% more members in the John Lewis programme specifically.

But not everything was perfect at the department stores arm of the business. H1 sales there actually fell 3% to £2 billion in what the company said was a challenging market.

While gross margins improved by 0.5 percentage points in the first half, adjusted operating profit at the John Lewis chain declined by £24 million due to the lower sales and an investment in its staff and technology “to enhance customer service”. 

On the plus side, Beauty sales were up and it “significantly outperformed” against the prior year. 

But Fashion “was impacted by the well-documented squeeze on customers’ disposable income and unseasonal weather, with sales down”. It also saw softer Home sales, but it performed well in Technology.

The company said that plans to improve John Lewis’s performance include the previously flagged return of its Never Knowingly Undersold promise with the help of AI technology. 

It’s also investing in its flagship Oxford Street store “by creating one of the largest Beauty Halls in the country. Additionally, our High Wycombe and Cheadle stores are undergoing investment, and all of our stores are benefiting from upgrades”.

Brand link-ups will be important too with an Awake Mode partnership having been unveiled only this week and the launch of Trinny London.

CEO Nish Kankiwala said: “These results confirm that our transformation plan is working and we expect profits to grow significantly for the full year, a marked improvement from where we were two years ago.

“We continue to invest heavily in quality, service and value, and customers are responding well – with more people shopping with us and customer satisfaction increasing. While we have much more to do, we’re well set up for a positive peak trading period and on target to significantly improve our performance for the full year.”