Marks & Spencer Group Plc (MKS.L) reported a 29% drop in full-year pretax profit to £364.6 million after a cyberattack crippled the retailer in the first half, but it guided for a full recovery in the current year.
The company said its performance was “a year of two halves,” with the second half showing a return to growth that it expects to continue. M&S forecast that adjusted pretax profit for the current fiscal year will surpass the £875.5 million reported in fiscal 2025, before the cyber incident.
The results lay bare the financial cost of the cyberattack that hit the British retailer last year. The attack caused significant disruption, leading to a steep decline in profitability despite a resilient second-half performance.
*Prior year pretax profit calculated from the reported 29% drop.
A Tale of Two Halves
The company’s narrative focused on a sharp divergence in performance. While the first half was defined by the cyberattack's impact, the second half saw a rebound. Adjusted profit in the second half rose 4.1% year-on-year, with the resilient food division compensating for weaker results in the fashion, home, and beauty arm.
The food business was the standout performer, with its profitability more than offsetting the declines elsewhere in the latter half of the year. This highlights the segment's defensive strength amid a challenging consumer environment, which has been further complicated by a surprise increase in the UK unemployment rate to 5.0% in March, according to the Office for National Statistics.
Looking Ahead
The optimistic guidance suggests management is confident it has moved past the disruption and is on a firm recovery path. By guiding for profits to exceed the pre-attack level of £875.5 million, M&S is signaling a swift return to its previous growth trajectory.
The forecast implies a significant year-over-year increase from the £671.4 million in adjusted pretax profit reported for fiscal 2026. Investors will be watching closely to see if the fashion and home division can contribute more meaningfully to growth in the coming quarters. The stock is a constituent of the FTSE 250 index, which closed down 0.2% in the prior session.
This article is for informational purposes only and does not constitute investment advice.
