John Lewis reported a 21.2% rise in profit before tax to £370.4m for the year ended 27 January 2017.
Overall sales rose 3.2%, and John Lewis and Waitrose both increased their market share.
However, Waitrose supermarkets saw-like-for-like sales fall 0.2%.
The supermarket is changing its focus to investing in existing stores rather than opening new ones.
It opened five supermarkets and five convenience shops during 2016, closing two convenience shops. In February it proposed the closure of four supermarkets and two more convenience shops.
It plans to open two more core supermarkets and five convenience shops in 2017. Its new site in Faringdon, Oxfordshire, opened in February.
Zoë Mills, retail analyst at Global Data, said: “Waitrose has continued to shift its core focus to improve the existing store portfolio rather than relying on significant space expansion via new stores. This should prove fruitful in 2017, as the rollout of successful food service concepts increase customer dwell time and ensure that stores have greater destination appeal.”
Despite the rise in profit before tax, staff bonuses at John Lewis and Waitrose were cut for the fourth year in a row.
Employees will now get a 6% bonus, down from 10% last year.
Sir Charlie Mayfield, chairman of John Lewis Partnership, said: “This allows us to maintain our level of investment in the face of what we expect to be an increasingly uncertain market this year, while absorbing the costs associated with adapting the Partnership for the future.”
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