British retailer Marks & Spencer said on Wednesday its first-half profit rebounded from last year's cyberattack-hit level, but was down on a two-year basis as strong trading in food failed to fully offset weakness in clothing.
The 142-year-old M&S, one of the biggest names on the UK high street, said its adjusted profit before tax more than doubled in the six months to September 26 to £403.2 million ($542.4 million), on sales up 16.2% to £9.26 billion.
Analysts had on average forecast profit of £399 million.
Food sales increased 13.9% year-on-year, while sales in the fashion, home and beauty division, or FH&B, rose 17.5%.
But, while food profit was well ahead on a two-year basis, FH&B profit was nearly £93 million lower, reflecting a more challenging apparel market and a slower recovery from the cyberattack.
M&S said fashion gained market share in a declining market, despite "availability constraints".
CEO Stuart Machin said FH&B's results "fell short of their potential and show there is a lot more to do."
"Although we have much improved product, the end-to-end transformation is in the foothills," he said.
Analysts noted that this year's spring/summer clothing collections were ordered when many systems were down after the April 2025 hack.
M&S said market conditions in FH&B "remain challenging", but said performance is expected to improve in the second half compared with the first, as availability has recovered, with a better balance between core and seasonal stock.
Shares in M&S were down 1% in early trading, paring 2026 gains to 24%.
M&S' food business was quick to recover from the cyberattack and is currently Britain's fastest-growing grocer, winning market share.
The group said its strategy of becoming "more of a shopping list (food) retailer" was working and its plan to double the size of its food business was on track.
M&S forecast full-year adjusted profit before tax in line with current market expectations. Analysts on average forecast £941 million.
"We enter the second half in a strong position, with a solid October under our belts," added Machin.
