The new owners of David Jones say the department store is performing well above expectations despite a fall in its operating profit.
David Jones sales rose 11.2 per cent in the half year to December, while those in comparable stores grew 9.7 per cent.
But higher store costs and restructuring weighed on the department store's operating profit, which at $104 million in the six months to December was weaker than $107 million in the five months to December 2014.
South Africa's Woolworths Holdings bought David Jones for $2.1 billion in 2014 and took control in August that year.
Woolworths chief executive Ian Moir said the Australian chain was performing well above expectations, and its rivals.
"The profit for the period was well above the budgeted profit for the period," he said.
Woolworths also owns Country Road, which achieved 5.2 per cent operating profit growth in Australia, partly due to the launch of Country Road brands in David Jones stores.
Sales growth at David Jones is expected to remain above wider market levels, but Woolworths said capital expenditure will also be high as transformation work continues.
Mr Moir is also cautious about the state of the Australian economy.
"The Australian economy, whether we like it or not, is a resources led economy, and will depend significantly on what happens in China," he said.
"If there is more of a slowdown in China then there will be more pressure on the economy and confidence will come down, even at our level of the market.
"That said, the business is trading very well and we're seeing the best sales we've seen in Country Road for a very long time."
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