British retail company Marks & Spencer (M&S) saw its adjusted pre-tax profits fall by 55.4% to £184.1 million in the first half of the fiscal year. This was due to a cyber attack in April this year, which forced the company to suspend online clothing orders for seven weeks.
M&S sales are rising
The attack also affected the availability of food. However, the company added in a statement that it is confident that the situation will return to normal by the end of the fiscal year. Sales rose 22.1 percent to £7.97 billion in the six months to September 27. Food sales largely recovered, with sales up 7.8 percent. However, sales in fashion, homewares, and cosmetics fell 16.4 percent.
“In the second half of the year, we expect profits to be at least on par with last year. This should give us a springboard into the new financial year and set M&S up for further growth,” said CEO Stuart Machin.
M&S is recovering and expanding
M&S estimated in May that the cyberattack would cost it about £300 million in lost operating profit for the entire fiscal year. However, it added that it hoped to halve this impact through insurance, cost control, and commercial actions. The company has now added that it has received £100 million in insurance payouts, which has almost offset the £101.6 million in costs it recorded in relation to the cyberattack during this period.
Before the cyberattack, the company began to reap the rewards of its restructuring plan, which it implemented in 2022 under Machin’s leadership. In fiscal year 2024/2025, the company reported its highest annual profit in more than 15 years, as customers bought more groceries and the brand shed its reputation as a manufacturer of outdated clothing. According to its website, M&S operates in more than 70 countries outside the UK, including the Czech Republic. It has over 1,000 stores in the UK and plans to open another 18 by the end of the financial year. It has more than 380 stores abroad.
Source: Reuters
