4th Nov 2026 08:56
(Alliance News) - Marks and Spencer Group PLC on Wednesday said "there is a lot more to do" in its clothing business as the retailer reported a jump in profit as it recovered from last year's cyber attack.
The London-based clothing and food retailer reported a sharp rise in half-year pretax profit to GBP355.1 million from just GBP3.4 million a year earlier. Last year, profit was hit after M&S stopped all online sales on its website for around six weeks due to a cyber attack.
Adjusted pretax profit more than doubled to GBP403.2 million from GBP184.1 million, ahead of GBP399 million consensus cited by RBC Capital Markets. Adjusted operating profit leapt 94% to GBP486.5 million from GBP251.4 million.
Revenue increased 15% to GBP9.17 billion from GBP7.94 billion.
Within this, Food sales grew 14% year-on-year to GBP5.16 billion, with adjusted operating profit soaring to GBP288.6 million from GBP89.1 million on-year, ahead of GBP261 million consensus. Margin was 5.6%, up 2.0%.
Fashion, Home & Beauty sales increased 18% to GBP2.00 billion, delivering adjusted operating profit of GBP150.5 million, below GBP191 million consensus, but up from GBP46.1 million the year prior. Margin of 7.5% was up from 2.7% a year ago.
M&S noted sales and profit in the division remained below 2024/25, despite growth in online sales.
"This was due to availability disruption reflecting the long - tail impact of the incident and lower store sales during the prolonged summer heat," M&S said.
International adjusted operating profit at GBP15.3 million was slightly ahead of expectations and up from GBP13.3 million on-year. Profit from the Ocado joint venture of GBP25.6 million was in line with consensus and improved from the GBP3.1 million loss the year before.
Shares in M&S were up 1.4% at 420.10 pence each in London on Wednesday morning.
"We hit the ground running in the first half of the year, accelerating the pace of change and delivering market share growth in both businesses," said M&S Chief Executive Stuart Machin.
"Our Food business is ahead, delivering double-digit volume growth in a flat market and we have momentum as the UK's fastest growing grocer," the CEO stated.
"In Fashion, Home & Beauty we bounced back from last year, gaining share in a declining market," Machin said. "Availability and stock flow are now improving...but the results fell short of their potential and show there is a lot more to do."
The CEO said M&S is resetting the "backbone" of the business from sourcing to supply chain, merchandise planning, stores and online.
"Although we have much improved product, the end-to- end transformation is in the foothills," he added.
M&S said it completed investments including 18 new, extended or renewed stores, acquired and constructed additional distribution capacity and relaunched its loyalty card, Sparks in the first half of the financial year.
Investment will increase in the second half, "focused on supply chain modernisation, digital capabilities to support sales growth and improve operational efficiency and to create a more productive store estate," it said.
These investments are expected to be funded through operating cash flows, with the benefits expected to deliver increased free cash flow over time, providing scope to further increase investment.
Capital expenditure, net of disposals, is expected to be around GBP750 million in the current year, in line with previous guidance.
The retailer declared an interim dividend of 1.4 pence per share, up 17% year-on-year from 1.2p.
Looking ahead, Marks & Spencer expects full-year 2027 adjusted pretax profit to be in line with market expectations.
It said trading conditions in Fashion, Home & Beauty remain challenging, although it expects second-half performance to improve from the first half.
For the full year, Food margins are expected to be ahead of the 2024/25 financial year.
"We enter the second half in a strong position, with a solid performance in October under our belts," CEO Machin said.
Machin bemoaned an "onslaught of cost headwinds", noting the business has absorbed significant external expenses, including packaging taxes, increased pay and National Insurance costs and costs related to the disruption in the Middle East.
By Jeremy Cutler, Alliance News reporter
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