M&S reveals profits more than doubled over past six months
M&S has revealed that profits more than doubled over the past six months amid a revival following last year’s cyber attack, but warned that it faces an “onslaught of cost headwinds”.
The high street giant has been buoyed by strong growth across its food business, which is performing “ahead” of plan.
But boss Stuart Machin said results from its fashion, home and beauty business “fell short of their potential” – despite bouncing back from the impact of the cyber-attack.
Last year, the retailer stopped all online sales on its website for around six weeks and suffered empty shelves due to disruption to its logistics systems after hackers targeted the business around the Easter weekend.
Bosses said recent sales and profits from its fashion, home and beauty business were still impacted by disruption to product availability due to the “long-tail impact” of the cyber incident.
Meanwhile, store sales were also partly knocked by the long period of hot weather over the summer.
On Wednesday, the company revealed that adjusted pre-tax profits lifted to £403.2 million for the 26 weeks to September 26, compared with £184.1 million a year earlier.
However, this was lower than the same period in 2024, amid an impact from weaker fashion, home and beauty profits and higher costs.
M&S said it has swallowed around £35 million of costs from increases to packaging taxes, pay and national insurance costs, and costs linked to disruption in the Middle East.
“Despite the onslaught of cost headwinds, we have remained focused on our ambitions and we are clear on our plan,” said Mr Machin.
“We enter the second half in a strong position, with a solid performance in October under our belts.”
M&S saw sales lift by 16.2% to £9.25 billion for the half-year to September.
It said its food operation reported a 13.9% jump in sales, as it benefited from an 11.9% rise in volume sales as well as store openings and investments.
Meanwhile, fashion, home and beauty sales increased by 17.5% year-on-year, supported by the online recovery following the cyber attack.
Richard Hunter, Head of Markets at interactive investor, commented: “A small hangover from the cyber attack remains in the fashion, home and beauty business, but the food unit continues its inexorable rise even before the impending festive season where M&S traditionally prevails.”
He highlighted the ongoing resilience and strength of the food business, which accounts for 56% of group revenues.
Duncan Ferris, of the investment platform Freetrade, said: “M&S has bounced back well from last year’s hack attack, with food, glorious food, leading the charge.
“Profit growth is huge, but it is puffed up by the effect of the cyber attack chaos on last year’s numbers. If we leapfrog last year’s weak comparatives and use the £413.1m adjusted pre-tax profit from two years ago as a benchmark instead, M&S is still 2.4% shy of its pre-cyber attack adjusted profitability.
“The comeback is still a comeback, though, and double-digit jumps in food sales and volumes show where the turnaround has been masterminded. Additional improvements to margins and market share make M&S’s progress here even more impressive.
“It’s momentum built on quality and distinctive treats, as well as products you simply won’t find anywhere else, but also an increasing emphasis on everyday essentials."