Retailer Marks & Spencer has today forecast a return to profit growth this year after it slumped 24% in 2025/26, hit by a disruptive cyberattack that dented sales and margins.
The 142-year-old Marks & Spencer said it entered its current reporting year to March 2027 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 today.
M&S said its outlook for the current year takes account of higher fuel, freight and input costs caused by the Iran war and continued government tax levies and regulatory challenges for the sector.
It would mitigate these through improved buying, reinvestment in value to drive volume, and savings from its structural cost-reduction programme.
Shares in M&S were up 2% in early trading. Its shares have fallen 11% over the last month.
"There is still so much to be done on the 'Reshaping M&S' transformation programme with plenty of self-help and market share to go after," Investec analyst Kate Calvert said.
The cyberattack forced M&S 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 £671.4m in the year to March 28, down from £881.1m in 2024/25. Second-half profit grew 4.1% from the previous year.
M&S said costs related to the cyber hack were £131.3m.
While food sales rose 7% and the division grew market share, sales in fashion, home and beauty slid 7.7%.
Machin said recovery in fashion, home and beauty has taken longer, "but there is strong growth potential."
He also said, however, that retailers faced "a triple whammy of headwinds with increased taxation, a greater regulatory burden and ongoing global conflict."
British consumers, shaken by the inflationary impact of the Middle East conflict, cut their spending last month for the first time since November 2024, a survey by Barclays showed last week.
The M&S CEO also said that any move by the UK government to cap some food prices would be "completely preposterous".
He added that if the UK government wanted to help ensure lower food prices there are actions it could take to reduce pressure on retailers' costs.
