John Lewis Partnership's profits fell in the six months to the end of July - despite a growth in gross sales and market share across both Waitrose and John Lewis in the period.
The Partnership said it delivered solid gross sales growth with both Waitrose and John Lewis increasing their market shares and customer numbers.
Partnership gross sales (inc VAT) were £5.27bn, an increase of £157.7m, or 3.1%, on last year. Revenue, which is adjusted for sale or return sales and excludes VAT, was £4.67bn, up by £124.2m or 2.7%.
Partnership operating profit was £113.7m, down £159.2m, or 58.3% on last year. This includes an exceptional charge of £25.0m in Waitrose for the write-down of property assets no longer intended to be developed and related costs, following a strategic review re-prioritising future investment spend towards existing stores (2015/16: income of £128.0m following the sale of the Clearings building). Excluding the exceptional items, operating profit was £138.7m, down £6.2m or 4.3% on last year.
Profit before tax was £56.9m, down by £167.1m, or 74.6% on last year. Excluding the exceptional items it was £81.9m, down by £14.1m or 14.7%.
Chairman Sir Charlie Mayfield said: "We have grown gross sales and market share across both Waitrose and John Lewis, but our profits are down. This reflects market conditions and, in particular, steps we are taking to adapt the Partnership for the future.
"These are not as a consequence of the EU referendum result, which has had little quantifiable impact on sales so far. Instead there are far reaching changes taking place in society, in retail and in the workplace that have much greater implications.
"Our ownership structure makes it especially important that we manage the Partnership carefully and thoughtfully for the long term and our plans anticipate the impact of these bigger changes. Evidence of that is already showing within these results and will become increasingly evident as we implement our long-term strategy."