M&S profits slide after cyber attack, but retailer hails ‘progress’

Marks & Spencer has revealed a slump in sales and profits due to disruption from a major cyber attack last year (Mike Egerton/PA) - (PA Wire)

Marks & Spencer has revealed a slump in sales and profits due to disruption from a major cyber attack last year which halted online clothing sales.

Nevertheless, the retailer said it has come out of the year “stronger” and expects to return to profit growth this financial year, compared with levels from before the cyber attack.

Bosses added that the group has still made “progress” in its wider transformation plan, which has included major store refurbishments.

M&S was forced to stop all online sales for about six weeks, and had empty shelves because of disruption to its logistics systems, after it was targeted by hacked around the Easter weekend last year.

M&S saw food sales grow 7% over the past year (Yui Mok/PA) (PA Archive)

The London-listed firm said late last year that the incident would hit its annual profits by about £136 million.

On Wednesday, it said adjusted pre-tax profits fell by 23.8% to £671.4 million for the year.

The high street giant also told shareholders that revenues dropped by 25% to £13.8 billion for the year to March 29, compared with a year earlier.

The hack particularly impacted the group’s fashion, home and beauty operations, with online sales suspended, stock flow disrupted and availability restricted by the cyber attack.

Sales in the division fell by 7.7% over the past year as a result, while profits from the category fell by more than half after the markdown and clearance of excess seasonal stock.

Meanwhile, the group’s food arm reported 7% sales growth for the year.

The retailer also pushed ahead with its major transformation plan, with included the opening 12 new food stores and three full line stores offer food and clothing.

Boss Stuart Machin stressed that the group is making progress despite pressures on its costs, including from increased government regulation and war in the Middle East.

He 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.”