The John Lewis Partnership said on Thursday it will pay staff a bonus for the first time in four years after reporting higher underlying profits for the year to 31 January 2026, marking a milestone in the employee-owned retailer’s recovery following pandemic losses.

The company said its 69,000 employees, known as partners, will receive a bonus worth 2 per cent of salary, equivalent to roughly one week’s pay. Underlying profit before tax, bonus and exceptional items rose 6 per cent to £134 million, while sales increased 5 per cent to £13.4 billion.

Despite the improvement in trading performance, the partnership reported a statutory pre-tax loss of £21 million, compared with a £97 million profit the previous year. The company said the result reflected about £120 million of exceptional charges, mainly non-cash write-downs linked to legacy technology systems being replaced as part of its transformation programme.

Jason Tarry, chairman of the John Lewis Partnership, said the group’s long-term investment strategy was beginning to deliver results. “Our multi-year plan to invest in customers and our brands for the long term is working; we have grown customer numbers and achieved record satisfaction,” he said.

Financial performance was driven largely by Waitrose, where sales rose 7 per cent to £8.5 billion and adjusted operating profit increased to £256 million. The John Lewis department store chain recorded a smaller increase, with sales up 3 per cent to £4.9 billion and adjusted operating profit rising to £58 million.

The partnership has spent several years restructuring its operations after losses during the Covid pandemic, closing 16 department stores and at least 20 Waitrose sites while cutting thousands of head office roles. More recently the retailer abandoned plans to develop a large build-to-rent housing business in order to focus investment on retail.

Richard Hyman, a retail industry analyst speaking on BBC’s Today programme that the modest bonus still signalled progress under the company’s leadership. “Turning a business round, especially of this size, takes time. It’s baby steps and they are taking those baby steps,” he said.

The partnership said it remained cautious about the outlook for the coming year, citing uncertain consumer spending and higher tax costs including increased national insurance contributions and new packaging levies.

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