Marks & Spencer, the UK’s largest clothing retailer, is set to release its latest financial results this week, shedding light on the impact of a recent cyber-attack and its plans to resume online operations. The retailer has been grappling with the aftermath of a cyber-attack that disrupted its IT systems over the Easter weekend, forcing it to halt online operations and leading to product shortages in stores.
Despite the challenges posed by the cyber-attack, Marks & Spencer is expected to report its financial performance for the year ending in March, covering the period before the incident occurred. The focus will be on how the retailer is managing the fallout from the attack and its implications for the company’s finances, particularly as online sales account for a significant portion of its revenue.
Stuart Machin, the chief executive of Marks & Spencer, has encouraged shoppers to visit its stores in light of the online disruption. However, the retailer may have missed out on clothing sales during a period of warm weather, impacting its financial performance. Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted that fashion sales are likely to have been the hardest hit by the cyber-attack.
While the retailer may have seen an uptick in sales of barbecue and picnic food, grocery lines have lower profit margins compared to clothing and homewares. Rebuilding consumer trust will be crucial for Marks & Spencer, especially after disclosing that personal information of thousands of customers was compromised in the cyber-attack.
Analysts at Barclays estimate that the cyber-attack could cost Marks & Spencer around £200m in the 2025-26 financial year, partially offset by an insurance payout of approximately £100m. Despite the disruption, analysts at Shore Capital remain optimistic about the retailer’s prospects, expecting the financial impact to be temporary.
Investors will be keen to see if Marks & Spencer provides financial guidance for the upcoming year or considers increasing its shareholder dividend. The cyber-attack has had a significant impact on the retailer’s market value, wiping more than £1.1bn off its market capitalization and dampening its share price following a recent high in April.
Analysts predict that Marks & Spencer will report a 5% increase in sales to £13.8bn for the year ending in March, with a pre-tax profit of £840m compared to £716m in the previous year. The retailer’s financial performance will be closely watched as it navigates the aftermath of the cyber-attack and works to regain consumer trust.
