Marks & Spencer profits surged as the retailer rebounded from a cyberattack, with adjusted pre-tax earnings climbing to £403.2 million for the 26 weeks to 26 September, more than double the £184.1 million recorded a year earlier.
Profit jump and cost pressures
Revenue for the half-year rose 16.2% to £9.25 billion. The food division led the growth, posting a 13.9% increase driven by an 11.9% rise in volume sales and new store openings.
Fashion, home and beauty divisions posted a 17.5% year-on-year sales lift, helped by the recovery of online channels after the breach.
Despite the upside, it said an “onslaught of cost headwinds” remains. It absorbed roughly £35 million in extra expenses linked to higher packaging taxes, wages, National Insurance contributions and disruptions in the Middle East.
Chief executive Stuart Machin said, “Despite the onslaught of cost headwinds, we have remained focused on our ambitions, and we are clear on our plan.” He added, “We enter the second half in a strong position, with a solid performance in October under our belts.”
Retail performance across categories
The food segment continued to outperform its plan, while the fashion, home and beauty areas “fell short of their potential” despite a bounce back from the cyber incident.
Last year, a ransomware attack forced the suspension of online sales for about six weeks and left shelves empty as logistics systems were compromised.
Managers noted the “long-tail impact” of the breach still affects product availability, especially for selected core lines and sizes in womenswear.
Larger, modern stores are delivering stronger results. The recently refurbished Pantheon flagship on Oxford Street is highlighted as a test bed for future investment in fashion, home and beauty.
Since reopening, sales on those floors have risen 27% compared with the previous financial year.
Online sales grew 11.2% on a comparable basis, now representing 35% of total sales, up from 33% a year earlier after the exit from bulky furniture.
“Availability and stock flow are now improving, we are broadening our appeal and the brand is in good health, but the results fell short of their potential and show there is a lot more to do,” Machin said.
Menswear performance remains robust, while conversion in womenswear is still constrained by lingering stock gaps.
In September, the retailer announced a partnership with Sephora to launch a new beauty destination in selected stores and online from spring 2027, aiming to broaden customer appeal.
Strategic moves and future outlook
It is resetting its backbone, from sourcing and supply chain to merchandise planning, stores and online. Executives note the end-to-end transformation is still in early stages.