Harrods has returned to the black, recording a pre-tax profit of £84.9 million as turnover at the luxury department store approached £1.1 billion.
The retailer’s latest accounts, covering the year to 31 January 2026, show a significant improvement on the pre-tax loss of just over £34 million recorded in the previous year.
Turnover increased by 1.2% to almost £1.1 billion despite challenging conditions across the global luxury market.
The previous year’s performance was significantly affected by a £62.5 million provision for compensation relating to sexual abuse committed by former owner Mohamed Al Fayed. The provision was recognised in Harrods’ 2024 accounts and was therefore not repeated in the latest results.
Operating profit stood at £172.3 million, down from £177.7 million in the previous year, with the retailer pointing to investment in employee pay and higher distribution costs.
An average 3.2% pay increase for employees cost the business £8.5 million, while higher employer National Insurance contributions added a further £5.7 million.
Geoff Weaver, Chief Financial Officer at Harrods, said the results demonstrated “further stabilisation and modest growth” for the business.
“Despite ongoing headwinds across the global luxury sector, Harrods once again outperformed the broader market,” he said.
“Our results provide a clean and clear picture, reflecting the strength of our core strategy: investing in exceptional customer experiences, strong brand relationships and continuously elevating our Knightsbridge store.”
Looking ahead, Harrods said it remains cautiously optimistic despite continued global macroeconomic and geopolitical uncertainty.
Weaver added: “Driven by our iconic brand, long-term vision, and unwavering commitment to quality, we are uniquely positioned to navigate market shifts and drive sustainable long-term growth.”
The results come during a period of significant change in the UK department store sector, with Frasers Group recently acquiring rival Harvey Nichols.
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