Marks & Spencer (M&S) expects to fully recover from the major cyberattack that disrupted its operations earlier this year by March 2026, as the retailer forecasts its second-half profit to be at least in line with the previous year.
The 141-year-old British retail chain reported a 55.4% fall in adjusted pre-tax profit to £184.1 million for the six months ending September 27, down from £413.1 million a year earlier. The sharp decline was largely attributed to the April cyber hack, which forced M&S to suspend online clothing orders for seven weeks and halt click-and-collect services for nearly a month.
The incident also disrupted store operations, leading to reduced clothing and food availability and additional logistics and waste costs.
Chief Executive Officer Stuart Machin said the company expects a strong recovery in the second half of the financial year, which would set a solid foundation for future growth. “The recovery in the second half should give us a solid base to springboard into a new financial year starting April and set M&S up for further growth,” Machin told reporters.
Despite the optimism, Machin noted that the broader retail sector continues to face challenges, including higher social security costs and a new packaging tax. “Our customers are increasingly concerned about rising costs and higher taxes, and they’re worried about the budget on November 26,” he said.
Shares in M&S rose 1% following the update, extending the retailer’s 2026 gains to 3.4%, recovering most of the losses incurred after the cyber incident. Analysts at Investec said they expect “news flow to continue to improve” as the retailer rebuilds operations.
M&S said it had received £100 million in insurance proceeds to offset some of the cyberattack-related costs. The company has recorded £101.6 million in expenses related to the breach so far, with a further £34 million expected in the second half. The retailer initially estimated the total financial impact of the hack at around £300 million in lost operating profit for the full year but hopes to halve that figure through insurance recoveries, tighter cost control, and trading improvements.
While food sales grew 7.8% in the first half, sales in clothing, home, and beauty declined by 16.4%, reflecting the operational impact of the cyberattack.
Before the incident, M&S had been enjoying the benefits of a turnaround plan launched in 2022, which led to its strongest profit in more than 15 years during the 2024/25 financial year. Analysts currently forecast a pre-tax profit of £638 million for 2025/26, compared with £876 million last year.
Machin also ruled out any plans to buy the remaining 50% stake in Ocado Retail, M&S’s online grocery joint venture with Ocado Group. “No, we’ve never had a discussion, and it’s not on my mind,” he said. “We’ve got other things to do with our shareholder money and plenty to go at.”
