M&S has returned to sales and profit growth after a “year of two halves” was dominated in the first half by a devastating cyber attack.
Overall profits were severely impacted by the cyber incident that disrupted fashion and food sales in Easter 2025.
Group adjusted profit before tax fell 23.8% to £671.4m in the year to 28 March 2026. Operating profits were down 16.9% to £818.4m pre-adjustment.
But a better than anticipated performance from M&S’ food division helped pull the group back to 4.1% profit growth in the second half.
“That was an extraordinary year,” said CEO Stuart Machin, introducing the company’s full-year results announcement.
“We were laser focused on our customers, worked incredibly hard to recover our business, and we came out stronger.”
Less severely disrupted – and enjoying strong trading momentum – M&S’ food division carried the group’s sales to growth for the year. Food sales were up 7% in 2025/26, compared to a 7.7% drop in fashion, home and beauty sales and 7.2% drop in international sales.
“Food has come roaring back,” said Bernstein analyst Richard Trainor.
”But the focus will be on a poorer clothing margin.”
M&S achieved an operating margin of 4.6% in its food division, ahead of expectations, but its clothing division disappointed with a 5.5% margin, around 0.7 percentage points below expectations.
Revenues excluding Ocado Retail, the joint venture now accounted for within M&S’ results, grew 1.9% to reach £14.2bn.
Total revenues including Ocado were up 24.8% to £17.4bn.
M&S has set out a prospectus to ramp up growth in its food division, with a vision to operate 380 food stores by March 2028 and double its online food household and beverage sales.
These ambitions are backed by a “strong balance sheet position” thanks to a renewed revolving credit facility and £100m of insurance proceeds.
M&S said it expected to resume profit growth compared to its pre-cyber attack 2024/25 position, even after accounting for what Machin called a “triple whammy” of headwinds from increased taxation, the Iran war and increased regulation.
“A resilient balance sheet supported by the hard work done on our cash position in recent years allowed us to absorb the cost of disruption without compromising our financial health,” said Machin.
“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,” he said.
“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.”
Freetrade investment writer Duncan Ferris said it was “crucial” that the group’s strong food sales translate into better profitability going forward.
“Food is still doing the heavy lifting,” he said, but added that the strength of M&S’ turnaround was remarkable.
”It’s clear that the second half performance put the business back on the front foot. Six months ago, we were talking about M&S profits and consumer trust being decimated by a cyber-attack. Against that backdrop, food momentum, a return to second-half profit growth and a constructive outlook are considerable wins.”
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