ibusinesslines.com September 18, 2018

John Lewis cuts staff bonuses as profits dive 77%

09 March 2018, 05:30 | Melissa Porter

Image John Lewis said 2017 had been a"challenging year

Image      John Lewis said 2017 had been a

John Lewis saw like-for-like sales edged 0.4% higher, while operating profits lifted 4.5% to £254.2m, but Waitrose saw profits collapse.

"We expect trading to be volatile in 2018/19, with continuing economic uncertainty and no let up in competitive intensity".

Sir Charlie Mayfield, Chairman of John Lewis Partnership, said: "As we anticipated, 2017 was a challenging year".

Profit before partnership bonus and tax also dived 67.2 per cent.

The grocery chain responded by lowering the prices of hundreds of products, helping comparable sales growth pick up to 1.1% in the final six months, although this hurt profits. Group profits before partnership bonus, tax and exceptional items dropped 21.9 per cent to £289.2 million. The partnership suffered major exceptional charges of £111.3 throughout the year, including a restructuring and redundancy bill of £72.8 million.

"Consumer demand was subdued, and we made significant changes to operations across the Partnership which affected many Partners".

Although sales were up in both Waitrose (+1.8%) and John Lewis (2.2%) stores, the company says that profits declined sharply 2017, largely due to lower gross margins in Waitrose, driven by weaker exchange rates and commitment to competitive pricing.

Waitrose saw like-for-like sales grow by 0.9% but at the expense of a 42% dive in operating profits, as higher costs were not passed on in prices.

"Partnership Bonus has been awarded at 5%. As at January 2018, the average hourly rate of pay for a non-management Partner was GBP8.91", he added.

It has cut the bonus for five years running now, down from 6% last year and as much as 17% in 2013.

Waitrose has seen like-for-like sales rise 2.4% since the year-end.

Sales were significantly impacted, particularly in John Lewis, by the heavy snow last week, the partnership said.

Before one-off items, pretax profits fell almost 22% to £289.2m, largely as a result of lower profit margins at the Waitrose supermarket chain driven by the fall in the value of the pound, which has increased costs and a "commitment to competitive pricing".

Following a profit warning in January, Sir Mayfield said the business chose to reduce the proportion of profits paid as Partnership Bonus previous year in a bid to absorb the impact of tougher trading conditions.

Other News

Trending Now

Fathers of slain Parkland students beg Florida reps to pass gun bill
The goal of the letter was to respond to rumors of planned student demonstrations, spokeswoman Beth Harrison said. Students will be informed that they are not to leave school grounds.

Owners reunited with pets after Beaver Dam detonation
Officials plan to hold a town hall meeting for the Beaver Dam residents who are affected by the evacuation at 11:30 a.m. While residents had been evacuated from the complex before the detonation, some left their pets behind.

Cigna's purchase of Express Scripts: Drug price relief ahead?
But shares of Cigna slumped 10.1 percent to $174.67 in late-morning trading, while Express Scripts surged 10.5 percent to $81.09. Morgan employer coalition, has spurred Cigna and Express Scripts to tie the knot", said the Leerink analyst in the CNBC report.

The Avengers Infinity War: Black Panther, Hulkbuster & More Art
Beau Flynn, Hiram Garcia, Johnson, and John Rickard are producers on this action pic scripted by Ryan Engle, Carlton Cuse, Ryan J. Prior to this announcement, Johnson shared some worldwide posters now featuring all three of the monsters from Rampage .

Broncos trade Aqib Talib, close doors on 'No Fly Zone'
Earlier today the Broncos enacted their 2018 option on cornerback Chris Harris Jr.to keep him in the fold. According to 9News , the AFC rival Patriots are one team in the mix for a potential Talib deal.

Tibetans cancel another event
The Hindu had reported on March 2 that an interfaith meeting at Mahatma Gandhi's memorial Rajghat on March 31 had been cancelled. Last April, Indian officials gave the Dalai Lama permission to visit the sensitive border area of Arunachal Pradesh.

Valspar Championship: PGA Odds, Pick, Predictions, Dark Horses
All the while, the golf legend who has been dealing with injury is feeling healthier. "I got a big stretch ahead of me". With the note that the Players is often referred to as "the fifth major", no major championships are held in Florida .