David Jones has recorded a 44.6% drop in adjusted operating profit to $31 million for the 26 weeks ended 26 December 2021, with turnover down 9.2% for the period.

Gross profit margin increased by 20bps to 35% due to reduced markdowns, an improved inventory position and the timing of the Boxing Day sale.

In line with its space optimisation strategy, trading space reduced by a further 5.8% relative to the prior period. Expenses declined by 1.8% as a result of store closures, space reduction and cost-out initiatives.

Online sales were up 44.2% and contributed 28.1% of total sales during the period.

David Jones parent company, Woolworths Holdings, expects trading conditions in Australia to improve post-Omicron as restrictions ease and consumer confidence recovers. Footfall in stores is also expected to improve, although remain pre-Covid levels, particularly in CBD areas.

“While the prospect of rising interest rates will have some impact, the underlying fundamentals of the economy are sound with record low unemployment, rising wages and a robust housing market,” Woolworths Holdings said in a statement to investors.

“However, global supply chain disruptions and high freight costs continue to pose a risk to both the cost and supply of product.”