M&S grows second-half profits despite cyber chaos

Despite the incident costing the retailer millions operationally, as well as in lost sales, M&S reported that its second-half profit had increased 4.1% year on year and it set out expectations of increased profit growth in the year ahead.

The retailer posted a leap in revenues, from £13.9bn to £17.3bn for the 52 weeks ended March 28, 2026, inflated by the first-time consolidation of Ocado Retail. 

Meanwhile, group adjusted profit before tax was £671m, down 23.8% on last year following the hack.

M&S said in a statement to markets: “Performance in 2025/26 was a year of two halves: significant operational impact from the cyber incident during the first, followed by a return to sales and profit growth in the second. Despite the disruption, M&S made further progress on its transformation, enabled by a strong balance sheet and sustained net funds position.”

Over the period, food sales increased 7% and market share grew 17bps to 4.1%. Fashion, home and beauty took the brunt of the attack with sales down 7.7% and online sales down 18.4%, however, they returned to growth in the final quarter.

The cost of the cyber incident reached £131.3m in exceptional charges, but was partially offset by a £100m insurance payout.

“That was an extraordinary year,” said M&S chief executive Stuart Machin.

“We were laser-focused on our customers, worked incredibly hard to recover our business, and we came out stronger. Throughout, we were transparent with customers and they rewarded us with their loyalty. We remain the UK’s most trusted brand, and we never take that for granted.”

International sales were down 7.2%, improving in the second-half, due to disruption in the Middle East. 

£750m investment

M&S said it was set to “reinvest in growth”, and announced plans to plough between £650m and £750m into the business over the next year, investing in new distribution centres, food stores and digital improvements. 

“Progress would not have been possible without our colleagues across every part of M&S,” said Machin.

“We faced into this challenge together: one team, sleeves rolled up, forging the culture we need to transform. The commitment they have shown through a demanding year has been nothing short of exceptional, and I thank each one of them for playing their part. We have a renewed sense of purpose, and you can feel that energy and determination around the business today. We are fast-paced, still positively dissatisfied and always aiming higher.

“Food was our standout performer as more customers than ever chose M&S Food for its quality, innovation and value. Performance accelerated in the second half, returns were strong, and we continue to outperform the market with the prospect of more growth to come.

“In fashion, home & beauty we delivered leading style credentials at the best possible value, and this resonated with customers. Recovery has taken longer, but there is strong growth potential. To support this, we have accelerated our supply chain improvements, acquiring a fully automated fashion distribution site in Lichfield to increase capacity and deliver new styles faster.

“Retailers face a triple-whammy of headwinds with increased taxation, a greater regulatory burden and ongoing global conflict. At M&S, we are unshaken by short-term events. We have a clear plan and there is much within our control as we reinvest in value and quality for our customers. Our job is to protect the magic of M&S while modernising the rest. We’ve now got the momentum to do that at pace. We have a strong culture, a hard-working focused team, and a growth business. There’s an extraordinary opportunity ahead, and we are on it.”