Marks and Spencer Group (LSE:MKS) on Wednesday reported a swing to a £403.2m adjusted profit before tax for the 26 weeks to 26 September, more than double the £184.1m posted in the same period last year, as the retailer recovered from the disruption caused by its 2025 cyber incident.
Statutory profit before tax jumped to £355.1m from just £3.4m a year earlier, while group sales rose 16.2% to £9.3bn, with every main division growing.
Food was the standout performer, with sales up 13.9% and like-for-like growth of 11.7%, driving adjusted operating profit to £288.6m from £89.1m and lifting operating margin to 5.6% from 2.0%.
Fashion, Home & Beauty sales rose 17.5% to £2bn and adjusted operating profit climbed to £150.5m from £46.1m, though the division's margin of 7.5% and absolute profit remained below the £243.4m and 12.0% margin recorded two years ago, with management citing availability constraints tied to the lingering impact of the cyber incident and a weak clothing market.
International sales grew 22.1%, with adjusted operating profit of £15.3m, while Ocado Retail swung to an adjusted operating profit of £25.6m from a £3.1m loss, with chief executive Stuart Machin noting the venture "is now profitable, supported by strong growth in M&S Food sales."
Adjusting items fell sharply to a net charge of £51.7m from £167.8m a year earlier, when the figure included direct costs from the cyber incident; this year's charge was dominated by a £34m hit tied to store estate rotation plans.
"We hit the ground running in the first half of the year, accelerating the pace of change and delivering market share growth in both businesses," Machin said, adding that the group's balance sheet "has built a firm financial footing from which to invest."
The group reported net funds excluding lease liabilities of £374.7m, up from £176.1m a year earlier, with cash and short-term investments of £1,072.1m; free cash flow from operations was an inflow of £102.2m, against an outflow of £193m in the prior year.
Group net debt including lease liabilities stood at £2,466.7m, slightly down from £2,528.3m a year earlier.
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The board declared an interim dividend of 1.4p per share, up 16.7% from 1.2p, payable on 8 January 2027 to shareholders on the register as at 27 November 2026, consistent with the group's policy of paying one-third of the prior full-year dividend at the half year.
Capital expenditure, net of disposals, is expected to be approximately £750m for the current year, in line with previous guidance, with around two-thirds directed to Food and the balance to Fashion, Home & Beauty; M&S capital expenditure before disposals in the first half rose to £377.4m from £238.4m, largely on supply chain and digital investment following the incident.
M&S said Food continues to outperform the market, while performance in Fashion, Home & Beauty is expected to improve in the second half compared with the first as availability recovers and the division's transformation gathers pace.
For the full year, the group said it expects Group adjusted profit before tax to be in line with current market expectations, with Food margins expected to be ahead of the 2024/25 level.