Marks & Spencer forecast a return to profit growth this year after it slumped 24 per cent in 2025/26, hit by a disruptive cyberattack that dented sales and margins.
The 142-year-old M&S, one of the biggest names on the UK high street, said it entered its 2026/27 year with a clear plan and a strong balance sheet and was focused on delivering further improvements to product availability and service levels.
“Profit growth is expected to resume versus 2024/25,” it said on Wednesday.
M&S said its outlook for the current year takes account of higher fuel, freight and input costs and continued government tax levies and regulatory headwinds for the sector.
It would mitigate these through improved buying, reinvestment in value to drive volume, and savings from its structural cost reduction programme.
The cyberattack meant M&S was forced to suspend online clothing orders for seven weeks and click-and-collect services for nearly four. Clothing and food availability in stores was also hit, while additional waste and logistics costs were incurred.
“We were laser focused on our customers, worked incredibly hard to recover our business, and we came out stronger,” CEO Stuart Machin said.
The group made adjusted profit before tax of £671.4 million in the year to March 28, down from £881.1 million in 2024/25. Second half profit grew 4.1 per cent versus the previous year.
M&S said costs related to the cyber hack were £131.3 million.
While food sales rose 7.0 per cent and the division grew market share, sales in fashion, home and beauty slid 7.7 per cent.
Machin said recovery in FH&B has taken longer, “but there is strong growth potential.”
But he added that “retailers face a triple whammy of headwinds with increased taxation, a greater regulatory burden and ongoing global conflict.”
Robyn Duffy, consumer markets senior analyst at RSM UK, said the continued expansion of M&S’s food business enabled the retailer to recover rapidly after the cyber attack.
“Food is the jewel in the crown and continues to outperform the wider grocery market as consumers remain willing to selectively trade up for quality and convenience,” she said.
“At the same time, improving style perceptions around M&S’s clothing ranges - particularly within womenswear - suggest the fashion business has the potential to deliver stronger sales momentum this year. The key takeaway is that customer demand for the brand appears materially stronger than it did just a few years ago.”
However, she noted that rising energy prices and the Middle East conflict-driven inflation are likely to place renewed pressure on discretionary spending this year, with clothing and home particularly exposed to any weakening in consumer confidence.
“The core proposition is clearly working, but the key swing factor for the year ahead will be how consumers respond to another squeeze on real incomes,” Duffy said.