Department store profits at John Lewis were up 10% to £50.1 million after sales growth of 6.6% to £1.71 billion, an increase of 5.1% on a same-store basis.
However, investment costs of £53.2m, including in-store refurbishments and IT, meant the division's overall profits fell 24% to £34.7m.
The company also had to make a payment of £40m to staff after miscalculating holiday pay over the past seven years.
In the first six weeks of the second half, John Lewis sales rose by 5.1% on a like-for-like basis.
Sir Charlie Mayfield, chairman of John Lewis Partnership, said trading conditions were showing signs of improvement and that John Lewis and Waitrose had grown sales "well ahead" of their respective markets during a strong first half.
He added: "Looking ahead, I'm encouraged by progress this year and am confident of the plans we have in place for Christmas.
"Despite a strong second half last year, both during the Olympics and at Christmas, I expect us to trade positively in the second half."
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