The short version
- Half-year profits jumped to £355 million, a significant recovery from the £3.4 million reported during the previous period affected by the cyber-incident.
- Clothing and homewares sales remain below pre-attack levels due to manual ordering constraints that limited stock availability throughout the summer months.
- The food division drove overall growth with a 14 percent sales increase, supported by new store openings and strategic investments in price stability.
Marks & Spencer has reported a substantial financial recovery in its latest half-year results, signaling that the severe operational disruptions caused by last year’s cyber-attack are finally receding. The retailer announced that profits for the six months ending September 26 reached £355 million, a dramatic improvement from the mere £3.4 million recorded during the same period last year. This rebound exceeded expectations set by financial analysts, suggesting that the company is stabilizing after a prolonged period of digital instability and supply chain friction.
The cyber-incident, which originated over Easter 2025, forced the closure of the company’s online platform for clothing and homewares for more than six weeks. While the immediate technical breach has been resolved, the operational fallout persisted well into the current reporting period. Stuart Machin, the chief executive, acknowledged that the impact lasted longer than anticipated but confirmed that the acute phase of the crisis is now behind the organization. The extended disruption required buyers to calculate demand and place orders with suppliers using manual processes, lacking the detailed data and technological support they typically rely on.
These manual ordering procedures created significant constraints on product availability, particularly affecting the clothing and homewares division. Machin noted that in several categories, the retailer failed to stock sufficient everyday products during the summer months because the team could not accurately predict demand without automated systems. Consequently, sales and profits from this segment remain below the levels seen two years ago. The company also faced higher fulfillment costs due to an increased mix of online sales, which diluted profitability further despite the overall revenue growth.
Despite these challenges in the fashion sector, total group sales rose by 16.2 percent to £9.2 billion. This broad-based growth was largely driven by the food business, which saw sales increase by nearly 14 percent to £5.2 billion. The food division benefited from the opening of seven new stores and the expansion or refurbishment of existing locations. Marks & Spencer stated that it has gained market share in frequently purchased items such as meat, dairy, and fresh produce, aided by a £50 million investment aimed at keeping prices down while improving quality.
The clothing, beauty, and homewares segment also showed signs of recovery, with sales rising 17.5 percent to almost £2 billion compared to the disrupted previous year. However, the company cautioned that market conditions remain challenging. Although availability issues have been resolved, creating a better balance between core and seasonal stock, the retailer expects performance to improve further in the second half of the year. The brand is described as being in good health, with efforts underway to broaden its appeal beyond traditional customer bases.
In addition to its core operations, Marks & Spencer’s joint venture with Ocado swung to a profit of £25.6 million, reversing a loss of £3.1 million from the previous year. This turnaround was supported by a 16 percent rise in sales and improved efficiency in delivery operations. The success of this partnership highlights the retailer’s broader strategy to integrate digital logistics with physical retail, even as it navigates the aftermath of significant cybersecurity failures.
Looking ahead, Marks & Spencer plans to cut £120 million in costs across technology, logistics, and stores this year. These savings are intended to offset new expenses, including a £35 million charge related to a new packaging levy. The company’s ability to recover from the cyber-attack while maintaining growth in its food division demonstrates resilience, but the lingering effects on clothing inventory serve as a reminder of the vulnerabilities inherent in modern retail supply chains.
The financial results underscore the complex interplay between digital infrastructure and physical stock management. While the immediate threat of the hack has passed, the operational scars remain visible in the form of lower-than-expected profits in key categories. As Marks & Spencer moves forward, its focus will likely shift from crisis management to optimizing efficiency and rebuilding consumer confidence in its fashion offerings, which have been disproportionately affected by the prolonged disruption.
Sources behind this briefing
Go to the original reporting
- The Guardian World↗M&S takes more than a year to recover from cyber-attack as profits bounce back to £355m
