Premium retailer expects to see reduced availability on food into June and July due to cyber hack, but reports strong food sales in full-year figures
Premium retailer M&S saw profits fall by almost a quarter in the last year despite growth in food, after the recent cyber hack hit online sales and added extra costs.
The retailer, which has released its full-year trading figures for the 52 weeks to 29 March, said it has seen its third consecutive year of growth and a strong balance sheet.
Pre-tax profts fell by 23.9 per cent to £511.8mn, compared to £672.5mn in 23-24, while revenue grew by six per cent to £13.8bn.
Food sales rose by 8.7 per cent to £9bn, with more shoppers buying M&S food more frequently. The retailer’s home, fashion and beauty sales also rose by 3.5 per cent, while its joint venture share of online retailer Ocado saw losses of £28.7mn.
The retailer is also counting the cost of a recent high-profile cyber attack, and said it expects the impact to be around £300mn on its 2025-26 operating profit, before cost mitigation, insurance and trading actions.
Chief executive Stuart Machin said: “Over the last few weeks, we have been managing a highly sophisticated cyber incident. We are seeking to make the most of the opportunity to accelerate the pace of improvement of our technology transformation and have found new and innovative ways of working.”
Food sales have been affected by reduced availability, according to Machin, who said the business has also incurred additional waste and logistics costs due to manual processes, affecting profit in the first quarter.
Online sales and trading profit have been “heavily impacted” by pausing online shopping, while stores have remained “resilient”.
“We expect online disruption to continue throughout June and into July as we restart, then ramp up operations. This will also mean increased stock management costs in the second quarter,” said Machin.
Overall, Machin said M&S is in the best financial health for 30 years. “Disciplined capital allocation and a much stronger balance sheet have put M&S on a robust financial footing, increasing resilience and creating capacity for future growth. M&S has net funds of over £400mn and we are in our best financial health for nearly 30 years.
“Our food business had another strong year as more customers chose to fill their trolleys with M&S food, more often. Our continuous investment in quality, value and innovation is paying off. We’ve outperformed the market over the past three years and I’m confident we will continue the momentum and grow a bigger, fresher food business.”
