Marks & Spencer Shares Down as Cyber Attack Disruption to Continue into July

The Marks & Spencer (LON: MKS) share price declined more than 3% on Wednesday after the retailer warned that the fallout from a recent cyber attack would continue to affect operations into July.

The company said online sales and trading profit in its Fashion, Home & Beauty division had been “heavily impacted” by the need to pause online shopping, and that the disruption would extend “throughout June and into July.” 

Manual processing has also led to increased waste and logistics costs in its Food division, where sales have already suffered due to lower availability.

The cyber incident is expected to hit full-year group operating profit by around £300 million before mitigation, although M&S said the cost would be partially offset by insurance, cost controls and other trading actions.

Despite the disruption, Marks & Spencer reported a 22.2% rise in profit before tax and adjusting items to £875.5 million for the year to 29 March—its highest in over 15 years. 

Statutory profit before tax fell 23.9% due to a non-cash impairment charge related to its stake in Ocado Retail.

Meanwhile, sales came in at 13.9 billion, rising 6%, with food sales up 8.7% to £9 billion.

“We have tackled this head on,” said chief executive Stuart Machin. “It has been challenging, but it is a moment in time, and we are now focused on recovery.”

“The incident allows us to accelerate the pace of change as we draw a line and move on.”