Marks & Spencer Faces Cyberattack Aftermath
This week, shoppers and shareholders are looking to Marks & Spencer for updates on the fallout from recent cyberattacks, particularly regarding when they might resume online orders.
The UK’s largest clothing and food retailer has been grappling with issues since its IT systems were compromised during Easter weekend. As a result, M&S had to halt its online operations, which also disrupted product availability in stores.
On Wednesday, the company is set to release its financial results for the year ending in March, a timeframe that precedes the cyber incidents.
Still, with online clothing and home sales generating about 3.8 million daily, the spotlight is on M&S’s response to this crisis and its potential financial implications.
CEO Stuart Machin has encouraged customers to shop in-store. However, it seems the warm weather might have led to missed opportunities in clothing sales.
“Fashion sales will likely be the hardest hit, especially since the attacks coincided with warmer periods when summer styles typically fill virtual shopping carts,” noted Susanna Streater, who heads money and markets at Hargreaves Lansdown.
There’s a chance M&S could see a boost from sales of barbecues and picnic supplies as people enjoy the spring sunshine, although the grocery segment does not compare in size to clothing and home products.
Amid reports that thousands of customers’ personal details, such as names and addresses, were breached, rebuilding consumer trust may require a significant effort from retailers.
While M&S has not yet estimated the financial impact of the cyberattacks, Barclays analysts predict costs might reach around £200 million during the 2025-26 fiscal year, somewhat balanced by insurance payouts that could total about £100 million.
Analysts at Shore Capital, acting as M&S’s house broker, have expressed their views, noting the importance of financial guidance moving forward.
Investors are anxious to see if the retail giant will offer forecasts for the upcoming year or even consider increasing dividends for shareholders.
The cyberattack has already erased over £1.1 billion from M&S’s market value, causing a decline in stock prices after hitting a nearly nine-year high in April.
Looking ahead, sector analysts anticipate annual revenue growth of 5%, projecting M&S could reach £13.8 billion for the year ending March 29, compared to £716 million the previous year.
