M&S earnings surge to £355 million after cyber-attack disruption

Marks & Spencer reported half-year profits of £355 million for the six months ending 26 September, a sharp rise from £3.4 million in the same period last year. The financial results surpassed the consensus forecasts of City analysts, marking a partial rebound from the operational disruptions caused by a cyber-attack that began over Easter 2025.

Group sales increased by 16.2% to reach £9.2 billion. The cyber-incident forced the retailer to shut down its e-commerce platform for over six weeks. Although more than a year has passed since the initial breach, the company stated that the impact on product availability continued to affect its clothing and homewares divisions throughout the summer months. Consequently, sales and profits in these categories remained lower than they were two years prior.

Stuart Machin, the chief executive, explained that the loss of standard technology and detailed data forced buyers to forecast demand and place supplier orders manually. This process left several clothing categories short of everyday items during the peak summer season. Machin noted that while the brand is attracting a wider range of shoppers, the financial results had not yet met their full potential. He also cited the high volume of online orders during the hot summer as a factor in profit pressure, given the higher fulfillment costs associated with digital sales.

Despite the stock issues, clothing, beauty, and homewares sales grew by 17.5% to nearly £2 billion. The company reported gaining share in a shrinking market during this period. Management indicated that with availability now restored and a better balance between core and seasonal products, performance is expected to strengthen in the second half of the fiscal year.

The food division contributed significantly to the overall beat against analyst expectations. Sales in this sector climbed almost 14% to £5.2 billion, aided by the opening of seven new stores and the refurbishment of others. A £50 million investment focused on lower prices and improved quality helped the retailer capture market share in staple items such as meat, dairy, and fresh produce.

The joint venture with Ocado also returned to profitability, recording a £25.6 million profit for the half year compared to a £3.1 million loss in the previous period. Sales at the joint venture rose by 16% alongside gains in delivery efficiency. Looking ahead, M&S plans to cut costs by £120 million this year across technology, logistics, and store operations. These savings will help offset additional expenses, including a £35 million levy for new packaging.