M&S profit rebounds from cyberattack but clothing drags on recovery

M&S Profit Rebounds After Cyberattack, But Clothing Sales Slow Overall Recovery

By James Davey

M&S Financial Performance and Sector Analysis

LONDON, Nov 4 (Reuters) - British retailer Marks & Spencer said on Wednesday its first-half profit rebounded from last year's cyberattack-hit level, but was down on a two-year basis as strong trading in food failed to fully offset weakness in clothing.

The 142-year-old M&S, one of the biggest names on the UK high street, said its adjusted profit before tax more than doubled in the six months to September 26 to £403.2 million ($542.4 million), on sales up 16.2% to £9.26 billion.

Analysts had on average forecast profit of £399 million.

Food and Clothing Division Performance

Food sales increased 13.9% year-on-year, while sales in the fashion, home and beauty division, or FH&B, rose 17.5%.

Clothing Profit Still Lagging

CLOTHING PROFIT STILL LAGGING

But, while food profit was well ahead on a two-year basis, FH&B profit was nearly £93 million lower, reflecting a more challenging apparel market and a slower recovery from the cyberattack.

M&S said fashion gained market share in a declining market, despite "availability constraints".

Management Commentary and Market Conditions

CEO Stuart Machin said FH&B's results "fell short of their potential and show there is a lot more to do."

"Although we have much improved product, the end-to-end transformation is in the foothills," he said.

Analysts noted that this year's spring/summer clothing collections were ordered when many systems were down after the April 2025 hack.

M&S said market conditions in FH&B "remain challenging", but said performance is expected to improve in the second half compared with the first, as availability has recovered, with a better balance between core and seasonal stock.

Market Reaction and Future Outlook

Shares in M&S were down 1% in early trading, paring 2026 gains to 24%.

Food Business Recovery and Strategy

M&S' food business was quick to recover from the cyberattack and is currently Britain's fastest-growing grocer, winning market share.

The group said its strategy of becoming "more of a shopping list (food) retailer" was working and its plan to double the size of its food business was on track.

Profit Forecast and Closing Remarks

M&S forecast full-year adjusted profit before tax in line with current market expectations. Analysts on average forecast £941 million.

"We enter the second half in a strong position, with a solid October under our belts," added Machin.

($1 = 0.7433 pounds)

(Reporting by James Davey, Editing by Paul Sandle and Louise Heavens)