LONDON ─ British retailer Marks & Spencer said on Wednesday its first-half profit rebounded from last year's cyberattack-hit level but was down on a two-year basis as strong earnings from food failed to fully offset weakness in clothing.
Stuart Machin, CEO since 2022, said results from the fashion, home and beauty division (FH&B) "fell short of their potential and show there is a lot more to do."
"Although we have much improved product, the end-to-end transformation is in the foothills," he said.
However, M&S shares rose 4 percent, extending 2026 gains to 31 percent, as investors focused on the stellar performance in food and what the company called "solid" trading in October.
The 142-year-old mainstay of Britain's shopping streets said adjusted profit before tax more than doubled to a better-than-expected £403.2 million ($542.4 million) in the six months to Sept. 26, on sales up 16.2 percent to £9.26 billion.
Food sales increased 13.9 percent year on year, while FH&B sales rose 17.5 percent.
Clothing profit still lagging
However, while food profit was well ahead on a two-year basis, FH&B profit was nearly £93 million lower, reflecting a more challenging apparel market and a slower recovery from the cyberattack.
The results "underline the extraordinary strength of the food business, show a sales recovery in clothing, but underscore the scale of the task ahead of M&S to fix clothing profitability," Bernstein analysts said.
M&S said its fashion business had gained market share in a declining market.
However, product availability, particularly in some core womenswear lines and sizes, was constrained by the longer-than-expected impact of manual ordering processes introduced after the April 2025 cyberattack. Profitability was also hurt by a higher proportion of online sales, which carry greater fulfillment costs.
M&S said some womenswear ranges had also shifted too far toward trend-led styles in some categories.
"We felt we left money on the table," Machin told reporters.
He said FH&B performance was expected to improve in the second half as product availability normalized and the balance between core and seasonal stock improved.
M&S' food business recovered quickly from the cyberattack and is now Britain's fastest-growing grocer, winning market share.
The company said its strategy of becoming more of a "shopping list retailer" was working and that its plan to double the size of the food business remained on track.
M&S forecast full-year profit in line with current market expectations. Analysts on average forecast £941 million.
