Highlights

  • MKS’ adjusted profit before tax reached GBP 184.1m in latest half, impacted by one-off cyber incident costs.
  • Food sales increased 7.8%, supported by rising customer numbers and a GBP 340m supply chain investment.
  • 18 new stores planned for the financial year and cost savings target raised to GBP 600m.

Marks and Spencer Group plc (LSE:MKS) announced its interim results for the 26 weeks ended 27 September 2025, reporting first-half performance affected by a cyber incident and associated recovery costs. Despite the disruption, the company continued to make progress across key strategic areas, including supply chain investment, store expansion, and cost reduction initiatives.

Profit Impacted by One-Off Incident Costs

M&S reported adjusted profit before tax of GBP 184.1 million, down from GBP 413.1 million in the same period last year. The result includes GBP 100 million of insurance income related to the incident and GBP 101.6 million of incident-related costs recorded within adjusting items. Statutory profit before tax was GBP 3.4 million.

The incident also contributed to higher markdowns and waste in the Food division and increased stock management costs in Fashion, Home & Beauty. Additional pressures came from new regulatory costs, including the Extended Producer Responsibility packaging levy and higher national insurance contributions.

Despite these challenges, M&S maintained its interim dividend policy, increasing the payout to 1.2p per share, up from 1.0p in the prior year.

Food Business Recovery and Market Share Growth

The Food division recorded sales growth of 7.8% and an adjusted operating profit of GBP 89.1 million, representing a margin of 2.0%. The performance was supported by increased customer numbers and a rise in market share, driven by continued innovation and quality enhancement across ranges.

Margins were temporarily affected by elevated waste and manual stock allocation during system restoration, but these have since normalised as operations stabilised. M&S also announced a GBP 340 million investment in its Food supply chain to secure capacity for future growth.

The company highlighted that its Food business has now outperformed on value and volume for 37 consecutive months.

Fashion, Home & Beauty and International Trading Update

In Fashion, Home & Beauty, sales were down 16.4%, with an adjusted operating profit of GBP 46.1 million and a margin of 2.7%. The slower pace of online recovery contributed to lower volumes as the company rebuilt digital traffic following the incident.

International sales declined 11.6%, generating an adjusted operating profit of GBP 13.3 million (margin 5.2%). The group is progressing with its international reset strategy, including new franchise, wholesale, and marketplace agreements to support future growth.

Ocado Retail, in which M&S has a joint venture, reported an operating loss before adjusting items of GBP 3.1 million. However, M&S Food outperformed total sales growth on Ocado.com.

Reshaping for Growth and Outlook

M&S continued to execute its transformation plan, with six new stores opened in the first half and 18 expected to open by year-end. The company increased its cost reduction target to GBP 600 million, helping to mitigate inflation and regulatory cost pressures.

As it enters the second half, M&S expects the business to be largely recovered, with profit anticipated to be at least in line with the prior year as residual effects of the cyber incident diminish. The company reaffirmed its focus on disciplined capital allocation, continued investment, and operational execution to deliver its long-term “Reshape for Growth” strategy.