John Lewis Partnership reported a larger loss in the first half, due to higher one-off costs, but made progress on its transformation, with increased sales and balance sheet strength.
A loss before tax, exceptionals and bonuses of £34 million was reported, compared to £5 million a year ago, while pre-tax losses grew to £88 million from £30 million.
Losses reflected an extra £29 million from the government's new packaging levy, where the group has absorbed the full-year cost in the first half, alongside higher National Insurance contributions and £54 million of exceptional costs from its transformation plan.
The group said it was "well positioned" for full-year profit growth thanks to its turnaround strategy under chairman Jason Tarry, who replaced Sharon White last year.
"Our strategic initiatives are gaining positive momentum, with our sharpened focus on our customer proposition driving growth," the employee-owned group said, helped by Tarry returning the 'Never Knowingly Undersold' promise.
Sales across the partnership rose 4% to £6.2 billion and revenue 5% to £5.4 billion.
Waitrose sales surpassed £4 billion for the first time, up 6% to £4.1 billion, with adjusted operating profit of £110 million, down £3 million.
John Lewis sales increased 2% to £2.1 billion, outperforming a market affected by economic uncertainty.
Cash generation strengthened, with £177 million generated from operations, up £30 million year-on-year, leaving liquidity at £1.5 billion.
Investment in the first half rose to £191 million, with further step-up planned in the second half.
Analyst Victoria Scholar at Interactive Investor said John Lewis "might have got a boost" from disruptions from Marks & Spencer being affected by its cyber attack in April.
"While its 36 physical bricks and mortar retail stores have been operating in a challenging space for many years, Waitrose has been a bright spot which continues to prioritise quality while also focusing on competitive pricing," she added.
Independent retail analyst Nick Bubb noted that the outlook contained no mention of full-year partner bonus hopes, but that the statement expressed optimism about delivering full year profit growth.