Foods-to-fashion retailer Marks & Spencer’s (LON:MKS) sales and profits returned to growth in H1 as the company recovered from last year’s damaging cyber incident. Shares rose after the retailer insisted it enters H2 in a ‘strong position, with a solid performance in October under our belts’.
There was also relief as Marks & Spencer maintained its FY27 pre-tax profit guidance. While trading conditions in Fashion, Home & Beauty remain ‘challenging’, the company expects an improved performance in H2.
M&S bounces back
For the half ended 26 September 2026, adjusted profit before tax more than doubled, rising from £184.1 million to £403.2 million. And sales rose 16.2% to £9.26 billion as the iconic British retailer recovered from last year’s cyber attack.
Drawing confidence from its strong balance sheet and robust free cash flow, Marks & Spencer bumped up the H1 dividend by 16.7% to 1.4p.
Food, glorious food
In the Food division, like-for-like sales grew 11.7% in H1. Marks & Spencer delivered double-digit volume growth in a flat market and has momentum as the UK’s fastest-growing grocer.
Encouragingly, the Fashion, Home & Beauty division bounced back with like-for-likes up 17.3%, as Marks & Spencer gained share in a declining fashion market.
| Year to March | FY27E | FY28E | FY29E |
| Revenue (£m) | 19,325 | 20,503 | 21,724 |
| Adjusted PBT (£m) | 925 | 992 | 1,057 |
| EPS (p) | 33.2 | 35.3 | 37.7 |
Source: Shore Capital estimates
Yet despite growth in online sales, divisional revenues and profits remained below H1 2025. ‘This was due to availability disruption reflecting the long -tail impact of the incident and lower store sales during the prolonged summer heat,’ explained the retailer.
Ready for an unforgettable Xmas
‘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,’ said CEO Stuart Machin.
‘Our hard work over the last few years to create a strong balance sheet has built a firm financial footing from to invest and we are confident in the opportunities ahead.’
Machin added: ‘We enter the second half in a strong position, with a solid performance in October under our belts. We are ready to deliver an unforgettable Christmas for our customers, with the best food and fashion ranges we’ve ever had.’
Shareholders will be delighted to see Marks & Spencer moving on from last year’s cyber disruption and striking a confident tone ahead of Christmas.
Sharesify expects the Food division to win further market share over the festive period, although we note management’s cautious outlook for the Fashion, Home & Beauty division given tough clothing market conditions.
It is also pleasing to observe that both the International business and Ocado Retail, in which Marks & Spencer has a 50% stake, grew profits year-on-year in H1.
Shore Capital’s well-followed retail analyst Clive Black said: ‘Based upon this company guidance from Marks & Spencer, it will come as a surprise too few to note that we are not adjusting our financial expectations for FY27F, so pre-tax profits of £925 million, which represents progress on the FY25 out-turn, putting FY26 to one side.’
Black teased: ‘With a decent Christmas 2026 behind it, noting our below consensus current FY27F estimate, we may yet have scope to nudge our profit expectations a little higher in the New Year.’
Disclaimer: The author (James Crux) owns shares in Marks & Spencer.
