Marks & Spencer said on Wednesday 4 November that its first-half adjusted profit more than doubled to £403.2 million, up from £184.1 million a year ago, when a cyber attack shut down its online clothing business for weeks. The figure beat the average analyst forecast of £399 million, Reuters reports. It still fell £9.9 million short of the £413.1 million M&S made two years ago, before the attack.
The split inside those numbers matters more than the headline. Food is growing at a pace no large British grocer can match, while chief executive Stuart Machin conceded that clothing and home “fell short of their potential”. For anyone who shops at M&S online, the statement also explains why favourite sizes went missing this year, why parcels and returns are costing the company more, and what it is building to fix both.
In short
- Profit: adjusted profit before tax was £403.2 million for the 26 weeks to 26 September 2026, on group sales up 16.2% to £9.26 billion.
- Food: sales rose 13.9% and volumes 11.9%, with operating profit of £288.6 million, about a third higher than two years ago.
- Clothing and home: sales rose 17.5% against last year’s collapse, but operating profit of £150.5 million is 38% below the 2024/25 level.
- Online: clothing and home online sales reached £705.7 million, 35% of the division, yet higher delivery and returns costs held the online margin at 6.0%.
- Christmas: M&S reported “a solid performance in October” and expects full-year profit in line with market forecasts, which Reuters puts at an average of £941 million.
What did M&S report on 4 November?
The results cover the 26 weeks to 26 September 2026 and were published through the London Stock Exchange at 7am. Group sales rose 16.2% to £9,255 million, and statutory profit before tax rose from £3.4 million to £355.1 million. The statutory gap is so wide because last year’s figure carried £167.8 million of one-off charges, against £51.7 million this time.
As our preview of the M&S half-year results set out, PA Media had expected profit of around £390 million, and Shore Capital had forecast £389 million. The final number was ahead of both. Reuters, whose average of analyst forecasts was £399 million, described the outcome as a rebound from the attack that was still down on a two-year basis.
| 26 weeks to late September | 2026/27 | 2025/26 (attack year) | 2024/25 (before attack) |
|---|---|---|---|
| Group adjusted profit before tax | £403.2m | £184.1m | £413.1m |
| Statutory profit before tax | £355.1m | £3.4m | £391.9m |
| Food sales | £5,162.9m | £4,531.9m | £4,204.5m |
| Food operating profit (margin) | £288.6m (5.6%) | £89.1m (2.0%) | £216.4m (5.1%) |
| Fashion, Home & Beauty sales | £1,995.4m | £1,697.6m | £2,030.5m |
| Fashion, Home & Beauty operating profit (margin) | £150.5m (7.5%) | £46.1m (2.7%) | £243.4m (12.0%) |
| Interim dividend | 1.4p | 1.2p | 1.0p |
Source: M&S interim results, 4 November 2026. Operating profit is stated before adjusting items.
Group sales are not a clean measure of growth over two years, because M&S began consolidating Ocado Retail in April 2025 and that business now adds £1,784.5 million. Excluding Ocado Retail, sales were £7,470.5 million, about 15% ahead of the same measure last year on our arithmetic. The interim dividend rises 16.7% to 1.4p and will be paid on 8 January 2027.
Why does “profit more than doubled” understate and overstate the recovery?
The doubling headline is true, but it hides two opposite effects. One makes the recovery in trading look smaller than it was, and the other makes the health of the business look better than it is. Both are visible in the detailed tables at the back of the statement.
The £100 million insurance payment in last year’s figure
Last year’s £184.1 million included £100 million of insurance income linked to the attack, which M&S counted within its adjusted result. There was no such payment this time. Strip that out and the business earned £151.4 million at operating level a year ago, compared with £486.5 million now, on our calculation from the company’s table.
So the trading recovery is stronger than a doubling suggests. Profit before tax without the insurance money would have been only about £84 million a year ago. That is a useful reminder of how deep the damage went in spring and summer 2025.
The fairer comparison is with 2024/25, the last normal period. On that basis, Food operating profit is up by £72.2 million, while Fashion, Home & Beauty is down by £92.9 million. Food has filled most of the hole but not all of it, which is why the group sits 2.4% below its pre-attack profit.
Costs explain part of the gap as well. M&S said it had absorbed about £35 million of packaging charges from the Extended Producer Responsibility scheme, along with higher pay, National Insurance and costs linked to disruption in the Middle East. It added that cost growth was weighted to the first half, with more than £120 million of structural savings expected over the full year.
Why is M&S clothing still falling short?
Machin’s own wording was unusually blunt for a results statement. He said the brand “is in good health, but the results fell short of their potential and show there is a lot more to do”. He also said the end-to-end transformation of the clothing business was “in the foothills”, which is a modest description four years into a turnaround plan.
The company gave three reasons: stock availability, the range itself and a weak market. Clothing sales growth also slowed sharply through the half, from 26.8% in the first quarter to 9.8% in the second. The first quarter was compared with the worst weeks of the online shutdown, so the second is the better guide.
Missing sizes trace back to the attack
M&S said availability “was constrained due to the longer than expected impact of manual ordering processes following the incident”. In practice, that means customers who wanted a particular line in a particular size often could not get one. Womenswear was affected most, with conversion hit by availability “in selected core lines and sizes”.
Reuters reports that analysts noted this year’s spring and summer collections were ordered while many systems were down after the April 2025 hack. That timing explains how an attack from 18 months ago could still be reducing sales this summer. M&S now says availability has recovered and that it has created a better balance between core and seasonal stock for autumn and winter.
M&S also admitted a buying misjudgement, saying the balance of its range “moved too far towards trend-led newness in some categories”. Menswear, by contrast, “continued to perform strongly”. The long summer heat also pushed demand online, and M&S said this was most evident in its high street stores.
The market gave no help. Worldpanel data cited by M&S shows the clothing market was 5.5% smaller by value than two years earlier in the 12 weeks to 13 September. M&S says it gained market share and stayed the UK’s leading fashion retailer, but its own sales were still 1.7% below 2024/25 for the half.
What happened to M&S online sales?
The online number shoppers will see quoted is an 84.6% rise to £705.7 million, but that is growth from a period when the site could not take clothing orders for weeks. Measured against 2024/25 and adjusted for the exit from bulky furniture, online sales rose 11.2%. That is the more useful figure, and it came in a falling clothing market.
Online now makes up 35% of clothing and home sales, up from 33% two years ago. Store sales moved the other way, falling 2.0% on last year to £1,289.7 million and 5.2% on two years ago. The pattern matches what the wider market has been showing: the BDO tracker for October put UK online sales up 10.1% against 2.2% in stores.
Every online sale still earns less than a store sale
The statement shows a store margin of 8.4% and an online margin of 6.0% in clothing and home. That is a big improvement on the negative 5.2% online margin for the whole of 2025/26, but it also confirms the central difficulty. M&S said profitability was “diluted by an increased mix of online sales which have higher fulfilment costs”.
Returns are a large part of this. M&S said demand had shifted towards categories with higher returns rates, so fulfilment and returns volumes “have increased faster than sales”. Its answer is physical rather than a new charge: a new dedicated returns warehouse in Sheffield, investment in the acquired Lichfield distribution centre and more capacity at Castle Donington.
The spending is already visible. Supply chain investment rose to £145.7 million from £41.7 million a year ago, and digital and technology spending to £71.8 million from £11.8 million, including work on online capabilities and a new planning platform for clothing. M&S announced on 28 October that it had begun recruiting for the 437,000 sq ft Lichfield site, which it expects to create 600 jobs. Its longer-term ambition, set out in its annual results, is to double clothing and home online sales and lift online to 50% of the division.
At 35%, there is a long way to go, and every extra point of online mix currently reduces margin unless costs per parcel fall. That is the commercial logic behind the warehouses. M&S generated free cash flow of £102.2 million in the half and holds net funds of £374.7 million excluding lease liabilities, so it can pay for the work from its own cash.
The statement did not announce any change to returns fees or delivery charges. Retailers under this kind of pressure often look at both, so it is worth watching, but on the published evidence M&S is trying to cut handling time and cost rather than pass it to customers.
Online groceries through Ocado Retail
Ocado Retail, the joint venture through which M&S sells food for home delivery, made an operating profit of £25.6 million against a loss of £3.1 million in the reported period last year. Active customers rose 14.3% to 1.38 million, and average orders reached 573,000 a week. The average basket was £124.78.
M&S products are taking a growing part of those baskets. M&S Food sales on Ocado rose 22.8% and now make up 30.9% of the average basket. Ocado Retail remains a small earner, with a margin of 1.4%, and Machin said there is “work to do” there.
How fast is M&S Food growing, and will prices change?
Food sales rose 13.9% to £5.16 billion, with like-for-like growth of 11.7% and volumes up 11.9%. M&S called itself “the UK’s fastest growing grocer” and said it had added 1.5 million customers over two years. Like-for-like growth did ease from 13.1% in the first quarter to 10.4% in the second, and M&S said fresh food benefited from the long summer weather and the World Cup.
| Retailer | Grocery sales growth, 12 weeks to 4 October 2026 | Market share |
|---|---|---|
| M&S (food and drink only) | +14.9% | Not comparable |
| Ocado | +12.4% | 2.2% |
| Lidl | +7.1% | 8.6% |
| Waitrose | +2.3% | 4.4% |
| Morrisons | +1.8% | 8.3% |
| Co-op | +1.8% | 5.4% |
| Asda | -0.5% | 11.5% |
| Sainsbury’s | +1.3% | 15.2% |
| Tesco | +1.0% | 27.8% |
| Aldi | +0.4% | 10.5% |
| Iceland | +0.2% | 2.2% |
Source: Worldpanel by Numerator, published 13 October 2026. Worldpanel does not give M&S a comparable share because clothing and general merchandise make up much of its sales mix.
M&S said it put more than £50 million of annualised investment into value during the half, which it credits for gains in family categories such as frozen, grocery and bakery. In recent weeks it has also announced an investment to make British beef and lamb more affordable, according to its press office. Worldpanel put grocery inflation at 2.5% in the four weeks to 4 October, so prices remain the main battleground.
The Food margin of 5.6% is exactly the number Shore Capital’s Clive Black had described, in a note reported in September, as looking “elevated and unsustainable”. M&S is more relaxed, saying only that full-year Food margins should be ahead of 2024/25. About two-thirds of its £750 million capital spending this year goes to Food.
For shoppers, a high margin alongside rising volumes gives M&S some room to keep investing in prices if rivals push back. New larger stores, many of them former Homebase units, are also helping it win more of the main weekly shop. A new Avonmouth distribution centre is due to support volumes through the Christmas peak, and our guide to supermarket Christmas delivery slots sets out how the M&S Food to Order collection dates compare.
What do the results mean for M&S shoppers this Christmas?
The most direct promise in the statement is from Machin: “We are ready to deliver an unforgettable Christmas for our customers, with the best food and fashion ranges we’ve ever had.” That is promotional language, but better stock levels are the part that can be tested. M&S says availability has recovered, and shoppers will soon find out whether core sizes are on the rails and on the site.
The balance sheet gives a more mixed picture. Inventories stood at £1,095.2 million at the end of the half, up from £981.4 million in March as stock was built for peak trading, but below the £1,192.3 million held a year earlier. M&S attributes this to “normalising continuity stock levels” in clothing and home, and the statement gave no availability measure that would allow its claim to be checked.
Returns and refunds on Christmas gifts
M&S has extended its returns window for the season. According to its returns and refunds page, full-price items bought on or after 22 October 2026 can be returned until 17 January 2027, or within the standard 28 days if that is later. Sale items keep a 14-day limit. Returns are free by post or home collection, and the company says returning to a store is the fastest way to get a refund.
Those store policies sit on top of the law. Under the Consumer Contracts Regulations, most online orders can be cancelled within 14 days of delivery without giving a reason. Under the Consumer Rights Act 2015, faulty goods can be rejected for a full refund within 30 days. Neither right is affected by a store’s own gift policy, although the buyer normally has to make the claim.
What else changes for customers
- Beauty: a partnership with Sephora will create a beauty destination in selected stores and online from spring 2027. Trade press has reported that about 100 stores are targeted.
- Loyalty: Sparks was relaunched in April. M&S is still developing the platform to bring in rewards from its financial services, but the statement gave no member numbers.
- Delivery: the Lichfield hub is due to start fulfilling orders in 2027, so faster clothing delivery will not arrive in time for this Christmas.
- School uniform: M&S said in late October it would hold school uniform prices for 2027.
M&S is also selling more through other people’s websites, although mainly overseas. International online and marketplace sales reached £37.5 million, from £9.9 million in last year’s disrupted half, with strong growth on Zalando and Amazon marketplaces and a switch to Zalando’s Zeos fulfilment service that is starting to cut delivery times and costs. These are small sums beside UK online sales, but they show the brand is now willing to trade on third-party platforms.
Is M&S opening or closing stores?
It is doing both, and the two are connected. M&S made 18 store investments in the half, comprising 13 new or extended stores and five renewals, including the Oxford Street flagship. Since the Pantheon store reopened, sales on its clothing and home floors have risen 27% compared with 2024/25.
The same statement carries a £34 million charge for “store estate rotation”, reflecting the latest view of closure plans and costs. M&S said further charges are expected over the next four and a half years, which suggests the closures are far from over. Older high street Full Line stores look most exposed, because the company’s stated aim is a smaller, more productive group of larger sites in growing locations.
This matters most in smaller towns. M&S said high street stores were where the shift to online during the heat was most evident, and it did not publish a new list of closures alongside the results. Any local closure will usually be confirmed store by store, as has happened through 2026. Store technology firm Vusion also announced on Wednesday that M&S will use its connected store platform in new stores, which fits the emphasis on new sites over old ones.
Is the cyber attack over for M&S?
Financially, it is close. M&S booked just £0.3 million of attack-related costs in the half, against £101.6 million a year ago. It expects about £2 million more in the second half, taking the total to around £134 million. Set against the £100 million of insurance income it recorded last year, the direct cost looks manageable, although lost sales and profit were far larger.
Regulation is a different matter. A note on contingent liabilities says that as at 3 November 2026 M&S “continues to cooperate with the investigations of the ICO and other relevant regulators”. The Information Commissioner’s Office has not published an outcome, and M&S has made no provision for one, saying it would not ordinarily expect such matters to have a material effect.
Customer trust is the final test. M&S states that brand health indicators for quality, value and style remain strong, and its customer numbers in Food have grown. Attacks on retailers have not stopped either: ASOS reported one in October, and supermarket refrigeration systems in Europe were targeted this autumn. The M&S experience has become the reference point for how long the effects can last, with stock problems still visible 18 months on.
How does M&S compare with Primark, Next and ASOS, and what comes next?
This is one of the busiest weeks of the year for British clothing results, and each retailer has a different problem. On Tuesday, Primark reported a 12% fall in annual profit after cutting prices, with UK like-for-like sales up just 0.5%. Next and ASOS both report on Thursday.
| Retailer | Latest update | UK clothing signal | Online position |
|---|---|---|---|
| M&S | Half year, 4 Nov | Sales +17.5% on last year, 1.7% below two years ago | Online 35% of sales, +11.2% on two years ago (adjusted) |
| Primark | Full year, 3 Nov | UK like-for-like +0.5%, Primark margin 10.2% | Click and collect now; home delivery planned by end of 2027 |
| Next | Reports 5 Nov | Second-half UK sales guidance +2.0% | UK online guidance +3.4%, stores -0.2% |
| ASOS | Reports 5 Nov | Full-year gross merchandise value about -5% at September update | Online only; first results since its October data breach |
Sources: company statements and reports. Periods differ, so the figures show direction rather than a like-for-like ranking.
M&S and Next are both seeing online take a growing share as stores weaken. Next’s trading update on Thursday will be the most useful direct comparison, because it covers the 13 weeks to 31 October and so captures the cold weather that arrived after M&S’s half closed. M&S offered only the phrase “solid performance in October” on recent trading.
M&S has a run of dated events coming up. It holds a Capital Markets Day on 10 November, where medium-term targets and online plans are likely to get more detail. The Christmas trading statement follows on 8 January 2027, the same day as the interim dividend payment, and it will be the first real test of whether availability has improved.
The full-year target is demanding but achievable. Reuters reports that analysts were on average forecasting £941 million before this update, and M&S said it expects to be in line with current market expectations. After £403.2 million in the first half, that implies about £538 million in the second, compared with £487.3 million in the same period last year, on our arithmetic.
Two factors flatter that comparison. This is a 53-week year, although M&S plans to report 52-week results as well, and the company has weighted its cost growth towards the first half. Against that, market conditions in clothing “remain challenging” in its own words, and the £13.20 National Living Wage from April 2027 is already on the horizon for next year’s budgets.
Machin and finance chief Alison Dolan were due to take analysts’ questions at 9.30am on Wednesday, after this statement was published. Comments on Christmas demand, online plans or store closures could add to the picture. On the published figures, M&S looks like a fast-growing grocer with a clothing business still working its way back.
Frequently asked questions
How much profit did M&S make in the first half of 2026/27?
M&S made an adjusted profit before tax of £403.2 million in the 26 weeks to 26 September 2026, up from £184.1 million a year earlier. Statutory profit before tax was £355.1 million, up from £3.4 million.
Has M&S fully recovered from the cyber attack?
Not fully. Adjusted profit is still 2.4% below the £413.1 million made in 2024/25, and clothing and home profit is 38% lower. M&S said availability was affected for longer than it expected by manual ordering processes after the attack, although it now says availability has recovered.
Why were some M&S clothes out of stock this year?
M&S blamed the longer than expected impact of manual ordering after the April 2025 incident, which particularly affected core womenswear lines and sizes. Reuters reports analysts noted that the spring and summer collections were ordered while many systems were down.
Are M&S online sales growing?
Yes. Clothing and home online sales rose 84.6% to £705.7 million against last year’s shutdown. The more meaningful comparison is with 2024/25: online sales were up 11.2% after adjusting for the exit from bulky furniture, and online reached 35% of the division’s sales.
How long do I have to return M&S Christmas gifts?
M&S says full-price items bought on or after 22 October 2026 can be returned until 17 January 2027, or within 28 days if that is later. Sale items have 14 days. Free returns are available by post, home collection or in a Fashion, Home & Beauty store.
Is M&S closing more stores?
M&S booked a £34 million charge reflecting its latest view of store closure plans and expects further charges over the next four and a half years. It also opened or extended 13 stores in the half. It did not publish a new closure list with these results.
Is M&S really the UK’s fastest growing grocer?
That is the company’s claim, and Worldpanel data supports the growth rate: M&S food and drink sales rose 14.9% in the 12 weeks to 4 October 2026, ahead of Ocado at 12.4% and Lidl at 7.1%. Worldpanel does not publish a comparable M&S market share because of its clothing mix.
When does M&S next report?
M&S holds a Capital Markets Day on 10 November 2026 and publishes its Christmas trading statement on 8 January 2027. Full-year results follow on 26 May 2027, according to its financial calendar.