5 November 2025
If you are covering the latest financial results from M&S, please find below a comment from Lucy Rumbold, equity research analyst at Quilter Cheviot:
“Marks & Spencer reiterated that it was a business that is back on track following the significant cyber attack earlier this year. Its first half year results showed that food sales have remained resilient through a difficult period, while the home and beauty divisions are showing signs of recovery. Crucially, guidance for the second half of the year indicates that profit is expected to be at least in line with last year, which is a positive sign that operations have normalised and trading can continue as normal over the strong Christmas period.
“Sales came in 20% ahead of consensus, just under £8bn, demonstrating that the cyber incident had minimal lasting effect on the brand’s reputation. Adjusting items, primarily related to the cyber impact, totalled £167m, an increase of about £100m year-on-year, but significantly below market expectations of £300m. The group received £100m in insurance proceeds, which offset most of the impact and contributed to this morning’s beat. Overall group operating profit was 50% ahead of forecasts, although operating profit for individual segments was behind.
“Food sales grew by 7.8%, with 2.4% driven by volume, resulting in a 10bps increase in market share. However operating metrics were below consensus due to higher markdowns, waste, and loss but the strength of the M&S brand helped offset these challenges through strong demand. The margin for the half was 2%, down from 5.1%, but management has reassured that operating efficiencies have improved following system restorations.
“Sales in fashion, beauty, and home declined by 16.4%, underperforming consensus, largely due to online sales disruption as click-and-collect services took longer than expected to resume. The margin contracted from 12% to 2.7%, due to online being inactive for a prolonged period and stock management issues, though management remains optimistic about recovery, echoing comments made regarding the food segment.
“Although the bottom line has been impacted across key divisions, the group’s resilient brand and lower-than-feared cost implications reinforce the view that the cyber incident was a one-off. Normal trading can therefore resume and the positive story M&S had going prior to the cyber attack remains in place.”
