By James Davey
LONDON (Reuters) -British retailer Marks & Spencer said it will have fully recovered from April’s cyber hack by March next year, forecasting second half profit “at least” in line with last year after it slumped 55.4% in the first half.
The cyberattack meant the 141-year-old M&S, one of the biggest names on the UK high street, 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.
But CEO Stuart Machin told reporters a second-half recovery “should give us a solid base to springboard into a new financial year starting April and set M&S up for further growth.”
LOOKING FORWARD TO ‘GOOD’ CHRISTMAS
While M&S was looking forward to a good Christmas across the whole of the business, he said the wider retail sector was facing significant headwinds, such as a new packaging tax and higher employer social security costs.
“Our customers are increasingly concerned about rising costs and higher taxes and they’re worried about the budget (on November 26),” said Machin.
Shares in M&S were up 1%, extending 2026 gains to 3.4% and have recovered most of their cyber hack losses.
“We expect news flow to continue to improve,” said analysts at Investec.
The group made adjusted profit before tax of 184.1 million pounds ($247.1 million) in the six months to September 27, down from 413.1 million pounds in the same period last year. While food sales rose 7.8%, fashion, home and beauty sales slid 16.4%.
In May, M&S estimated the cyberattack would cost it about 300 million pounds in lost operating profit in its full year, although it hoped to halve that impact through insurance, cost control and trading actions.
It said on Wednesday it had received insurance proceeds of 100 million pounds. It also booked 101.6 million pounds of cyberattack related costs, with a further 34 million pounds slated for the second half.
Prior to the hack, M&S was beginning to reap the benefits of a comprehensive turnaround plan that has been running since 2022 under Machin, with the group achieving its highest annual profit performance in over 15 years in its 2024/25 year.
Before Wednesday’s update analysts were on average forecasting a 2025/26 adjusted profit before tax of 638 million pounds, down from 876 million pounds in 2024/25.
($1 = 0.7451 pounds)
(Reporting by James Davey, Editing by Paul Sandle and Conor Humphries)
