The John Lewis Group's profits halved during the first six months of the year, as restructuring hit the bottom line while inflationary pressures ate into margins.
Pre-tax profits across the group halved in the first half of the year, dropping to £26.9m.
Exceptional costs of £56.4m hit the group after a strategic overhaul, which involved closing some regional offices and making redundancy payments.
But profit before tax and exceptional items was still down 4.8 per cent to £83.3m
Overall sales grew 2.3 per cent, with roughly similar increases at both John Lewis and Waitrose.
Why it's interesting
Bosses at the iconic British retailer said this morning on a call with journalists that it had felt the effect of the Brexit vote, as rising product costs caused margins to shrink.
Waitrose was particularly badly hit, as profits excluding property sank 17.4 per cent. Managing director Rob Collins said this was due to basic food prices outpacing sale prices, especially in meat, fish and dairy.
Paula Nickolds, managing director of John Lewis, noted that big-ticket item sales had been negatively affected by waning consumer confidence. But she also pointed to women's clothing and beauty as a rare bright spot for the fashion sector.
Chairman Charlie Mayfield said the business had noted the challenging retail environment but instead of "hunkering down" it "pressed on with a lot of important changes."
Group finance director Patrick Lewis added that most restructuring costs had been deliberately kept in the first half of the year, and that profits typically spike in the latter half on the back of the Christmas boom.
What Waitrose said
Looking ahead, Mayfield commented: "Sales growth has continued in the first few weeks of the second half. We are well set for our all-important seasonal peak, but we expect the headwinds that have dampened consumer demand and put pressure on margins to continue into next year.
"In addition, we will incur higher pension accounting charges in the second half year, as a result of low market interest rates. These will all impact our full year profits."