M&S profits slide as cyber attack takes its toll
M&S has said its performance in the 52 weeks to 28 March was a year of two halves with the impact of a cyber attack in the first and a return to sales and profit growth in the second.
Sales climbed by 24.8% to £17.37 billion in the period as trading was boosted by a strong performance at the retailer’s food arm.
Subscribe to TRBWhile statutory pre-tax profit fell by 28.8% to £364.6 million across the year, group adjusted pre-tax profit declined by 23.8% at £671.4 million with second half profit up 4.1%.
Fashion, home and beauty sales dropped by 7.7% reflecting the temporary pause in online trading and systems access due to the cyber incident, which disrupted stock flow and restricted availability.
In contrast, food sales climbed by 7% as M&S grew its customer numbers and invested in value, quality and regular new product launches.
To support its fashion recovery, the retailer is accelerating supply chain improvements and has acquired a new fully automated fashion distribution site to enable it to increase capacity and deliver new styles faster.
Stuart Machin, M&S chief executive, said: “That was an extraordinary year. 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. We aim to serve our customers better every day, and we thank them for shopping with us. We continue to invest in the value, quality and innovation that they look for in M&S.
“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.
“With strong net funds we continued our transformation at pace, completing our most ambitious year in a decade of opening new and renewal stores alongside significant advances in supply chain and digital capability.”
M&S said it remains focused on delivering further improvements to availability and service levels in the current financial year.
Looking ahead, Machin said: “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.”
