20 May 2026
If you are covering Marks & Spencer’s latest financial results, please find below a comment from Lucy Rumbold, retail analyst at Quilter Cheviot:
“Overall results for Marks & Spencer were better than feared given the cyber implications throughout the year. Its profit beat was driven mostly by the heavy lifting done by the food division, with clothing being the most disrupted by the incident last year given supply chain issues, however positive trading in the second half signals a good improvement. Guidance has been for profit growth to resume from 2025 underpins our core thesis that the business fundamentally did not change from cyber.
“Sales increased 25% year on year, which underlines the strength of the brand. Within this, Food like-for-like sales rose 6.7% over the year as customer numbers increased and market share improved, ahead of consensus expectations. Food is now the largest part of the business, accounting for around 60% of the business and this strength more than offset weakness in Clothing, where the cyber disruption had a greater impact. Clothing sales declined 7% over the year, although second-half growth of 0.2% reflected the restoration of online trading. Even so, performance remained constrained by the lingering impact of the incident on availability and the clearance of residual stock.
“Operating profit came in 6% ahead of expectations, which again is evidence of the group’s resilience and there is the potential for future recovery in margins, especially in clothing as trading continues to normalise over the next year. The group’s strong balance sheet allowed it to absorb the cost of disruption of the cyber-attack without compromising financial health. With it now firmly in the rearview mirror, the year ahead should be a positive one.
“The group remains committed to reinvesting in the business through supply chain upgrades, technology transformation and store rotation, which explains the step-up in capex to £650–750m this year. Looking ahead, management expects profit growth to resume versus 2025, implying upside of around 20% over the year ahead. For investors, M&S is valued incredibly cheaply given it should continue from where it left off in 2025 as operations normalise.”
