KPls Used by John Lewis

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KPls Used by John Lewis

Gross sales Growth %

This indicates the gross sales growth in percentage during the financial reporting period. This measure is used alongside Like-For-Like Sales, a performance measure that analyzes year-by-year growth in online sales among branches while excluding VAT. The measure also excludes the effect of branch opening and closure. The measure aims at establishing the performance of sales in a consistent manner. These measures are used to show how John Lewis is fairing in the market through identification of sales growth. It also helps in estimating the achievement of the firm’s long-term growth sustainability. It is observed that John Lewis’ market share expanded as a result of growth in sales. The Like-For-Like Sales improved by 6.4% while the gross sales growth went up by 6.6% in 2014 (John Lewis, 2014) as indicated on the graph below.(…)

Operating Margin %

Operating margin can be described as the operational profit in respect to exceptional products and services indicated as percentage of the generated revenue. The margin is an indicator of the firm’s profitability. It is used in evaluating the pricing strategy used by the company as well as its operating efficiency. The operating margin prior to the exceptional products in John Lewis is principally decreasing as a result of year-by-year increase restructuring costs as well as increase pension related operational costs. The 2014 margin stood at 5.2% and reduced further to 4.7% after the inclusion of exceptional items (John Lewis, 2014). The performance of in the last 5 years is indicated in the graph below.(…)