Shoppers and shareholders will look this week to Marks & Spencer to share more information about the impact of a damaging cyber-attack and whether the retailer can give clues on when it will be able to restart online orders.
The UK’s biggest clothing retailer, which also sells food and homewares, has been struggling for almost a month since its IT systems were hit over the Easter weekend. The attack forced it to stop its online operations and has also affected availability of some products in stores.
On Wednesday, M&S is due to report its financial results for the year to the end of March, covering the period before the cyber-attack occurred.
Despite this, the focus will undoubtedly be on how the company is coping with the incident and what it means for its finances, given that clothing and home sales online are worth about £3.8m a day.
The company’s chief executive, Stuart Machin, has urged shoppers to visit M&S stores, however the retailer will regret missing out on clothing sales during an extended period of fine weather.
“Fashion sales are likely to be the biggest casualty, particularly as the attack has come during the spell of warm weather when summer ranges would ordinarily be piling up in virtual baskets,” said Susannah Streeter, head of money and markets at broker Hargreaves Lansdown.
The retailer is expected to have benefited from consumers buying barbecue and picnic food to take advantage of spring sunshine, although grocery lines have significantly lower margins than clothing and homewares.
It may take M&S some time to rebuild trust with consumers, given its revelation that some personal information relating to thousands of customers – including names, addresses and order histories – was taken in the cyber-attack.
M&S has not yet shared a prediction of the financial cost of the cyber-attack but analysts at Barclays have estimated it could cost the company around £200m during the 2025/26 financial year. This is likely to be offset by an insurance payout that could reportedly total £100m.
“We expect and hope the current disruption to be a temporary matter, which we expect to involve insurance claims and modest net financial cost,” said analysts at Shore Capital, which acts as house broker for M&S.
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Investors will want to see whether the retailer is able to offer any financial guidance for the year ahead, or decides to raise its shareholder dividend.
The cyber-attack has wiped more than £1.1bn off M&S’s market value, denting its share price after it had reached an almost nine-year high in April.
The retailer is expected to report a 5% increase in sales to £13.8bn for the year to 29 March, along with a pre-tax profit of £840m, based on predictions by sector analysts. This compares with £716m a year earlier.
