M&S expects profit recovery after cyber hack-driven slump
Marks & Spencer's Financial Outlook and Recovery Strategy
By James Davey
LONDON, May 20 (Reuters) - British retailer Marks & Spencer forecast a return to profit growth this year after it slumped 24% in 2025/26, hit by a disruptive cyberattack that dented sales and margins.
The 142-year-old M&S, one of the biggest names on the UK high street, said it entered its 2026/27 year with a clear plan and a strong balance sheet and was focused on delivering further improvements to product availability and service levels.
Profit Growth Forecast
"Profit growth is expected to resume versus 2024/25," it said on Wednesday.
Challenges and Mitigation Measures
M&S said its outlook for the current year takes account of higher fuel, freight and input costs and continued government tax levies and regulatory headwinds for the sector.
Cost Management Initiatives
It would mitigate these through improved buying, reinvestment in value to drive volume, and savings from its structural cost reduction programme.
Impact of Cyberattack
Online Clothing Orders Suspended
ONLINE CLOTHING ORDERS SUSPENDED
The cyberattack meant M&S was forced to suspend online clothing orders for seven weeks and click-and-collect services for nearly four. Clothing and food availability in stores was also hit, while additional waste and logistics costs were incurred.
Leadership Response
"We were laser focused on our customers, worked incredibly hard to recover our business, and we came out stronger," CEO Stuart Machin said.
Financial Impact
The group made adjusted profit before tax of £671.4 million in the year to March 28, down from £881.1 million in 2024/25. Second half profit grew 4.1% versus the previous year.
M&S said costs related to the cyber hack were £131.3 million.
Performance by Division
Food Sales
While food sales rose 7.0% and the division grew market share, sales in fashion, home and beauty slid 7.7%.
Fashion, Home & Beauty Recovery
Machin said recovery in FH&B has taken longer, "but there is strong growth potential."
Sector Headwinds and Share Performance
But he added that "retailers face a triple whammy of headwinds with increased taxation, a greater regulatory burden and ongoing global conflict".
Shares in M&S have fallen 11% over the last month.
(Reporting by James Davey; editing by Sarah Young and Elizabeth Piper)
