Marks and Spencer (M&S) has warned investors it is facing a £300m hit to trading profits as a result of last month’s ransomware attack.
The company said it was aiming to reduce the figure significantly through management of some costs but added that disruption to its operations may last through until July,
The continuing fallout from last month’s cyberattack is hanging over the retailer’s outlook as its online channels remain down for payments.
Website sales are expected to resume, at least partially, in a couple of weeks’ time.
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It is widely believed the group fell victim to the same hackers, known as Scattered Spider, that targeted the Co-op and Harrods towards the end of April.
Both M&S and the Co-op have admitted that personal customer data was snatched but say the thefts were limited to names and contact details, with payment details safe.
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The Co-op said last week that it was aiming to improve grocery availability in its stores but progress is believed to have been limited so far, with some empty shelves still being reported.
M&S has seen more than one billion pounds lost from its stock market value since it declared the incident on 22 April.
The company said of its predicament: “Over the last few weeks, we have been managing a highly sophisticated cyber incident. As a team, we have worked around the clock with suppliers and partners to contain the incident and stabilise operations, taking proactive measures to minimise the disruption for customers.
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“We are seeking to make the most of the opportunity to accelerate the pace of improvement of our technology transformation and have found new and innovative ways of working.
“We are focused on recovery, restoring our systems, operations and customer proposition over the rest of the first half, with the aim of exiting this period a much stronger business.
“Since the incident, Food sales have been impacted by reduced availability, although this is already improving. We have also incurred additional waste and logistics costs, due to the need to operate manual processes, impacting profit in the first quarter.
“In Fashion, Home & Beauty, online sales and trading profit have been heavily impacted by the necessary decision to pause online shopping, however stores have remained resilient. We expect online disruption to continue throughout June and into July as we restart, then ramp up operations. This will also mean increased stock management costs in the second quarter.”
The statement added that the anticipated hit to operating profits this year will be reduced through of around £300m for 2025/26, which will be reduced through management of costs, insurance and other trading actions. It is expected that costs directly relating to the incident will be presented separately as an adjusting item.
Chief executive Stuart Machin thanked customers for being “unwavering in their support” for the chain.
“This incident is a bump in the road, and we will come out of this in better shape, and continue our plan to reshape M&S for customers, colleagues and shareholders,” he said.
M&S gave the update while revealing financial results for the year to 29 March.
They showed trading profits at a 15-year high. M&S reported a 22.2% rise to £875.5m, with sales up across each of its product divisions.
Shareholders were rewarded with a 20% increase in the final dividend.
