Marks & Spencer has revealed that disruption from a “highly sophisticated” cyber attack last month is expected to continue through to July.
Its warning of a potential £300 million profit hit from the hack cast a cloud over today’s results showing the retailer’s best performance in 15 years.
Meanwhile, a bigger-than-expected spike in the annual rate of inflation today dealt a blow to the outlook for lower interest rates.
FTSE 100 Live Wednesday
- Marks and Spencer £300m cyber hit
- Inflation blow to rate cut outlook
- Currys ups profit guidance
Market update: FTSE 100 holds firm, rates uncertainty hits builders
10:28 , Graeme EvansStrong results today shielded Marks & Spencer shares after the retailer’s warning that cyber attack disruption could mean £300 million in lost profit and last until July.
The FTSE 100 stock recovered an initial 3% fall to stand 0.4p higher at 368p, boosted by the best profit performance in 15 years and the view of chief executive Stuart Machin that M&S will emerge from the crisis in better shape.
The company backed up his optimism by declaring a 20% higher annual dividend, having increased headline profit for 2024/25 by 22.2% to £875.5 million.
This year’s profit outturn faces a hit of up to £300 million, although this is before any recoveries through insurance and cost savings.
It expects online disruption from the cyber attack will continue throughout June and into July “as we restart, then ramp up operations”.
The hacking incident at Easter has derailed the retailer’s share price progress, having recently traded above 400p for the first time in a decade.
Elsewhere in the FTSE 100 index, the mood was soured by figures showing that inflation jumped by more than expected to 3.5% in April.
The spike, which was driven by rises in energy, water and telecom bills, cast doubt on expectations that interest rates will continue to be cut gradually.
Sterling rallied back above $1.34, while rate-sensitive stocks came under pressure.
They included housebuilders as mortgage affordability concerns caused Barratt Redrow to weaken 11.6p to 465p and Persimmon to fall 24p to 24p to 1364p.
The support of Rolls-Royce, BAE Systems and National Grid limited the impact on the FTSE 100 index, which stayed within 1% of its record close with a decline of just 1.28 points to 8779.84.
JD Sports Fashion posted the biggest fall as a first quarter trading update alongside annual results caused shares to give up some of their recent recovery.
Like-for-like sales declined 2% in the 13 weeks to 3 May, which the transatlantic retailer said was in line with expectations. It described market conditions as volatile, adding that tariffs have the potential to disrupt US consumer demand.
The shares fell 5.5p to 87.5p, having risen from 63p in April.
In the FTSE 250, Currys rose another 2.3p to 127.5p after the electricals chain said annual profits are set to rise by a bigger-than-expected 37% to £162 million.
The latest upgrade to guidance came as like-for-like sales growth accelerated to 4% in the final 17 weeks of the 2024/25 financial year, having been 2% stronger over the peak trading season.
It intends to resume dividends when it publishes annual results on 3 July.
The FTSE 250 index fell 0.6% or 127.22 points to 20,969.22, with recruitment firm Hays and partnerships-focused building firm Vistry among the stocks down 2%.
M&S cyber disruption clouds strong profit progress
09:04 , Graeme EvansThe cyber attack disruption at Marks & Spencer today overshadowed strong annual results after the retailer reported its highest profit in over 15 years.
M&S’s 2024/25 surplus before tax and one-off items lifted 22.2% to £875.5 million.
Food sales rose 8.7% to £9 billion, which on a margin of 5.4% meant the division’s operating profit rose 25% to £484.1 million.
Fashion, Home & Beauty sales lifted 3.5% to £4.2 billion, with the operating profit up 8.6% to £475.3 million on a margin of 11.2%.
M&S said the performance meant a third consecutive year of growth in sales and market share and profit since the company launched its restructuring plan.
It has increased the full-year dividend by 20% to 3.6p a share, which includes plans for the payment of 2.6p on 4 July.
Shares fell 4.6p to 363p as investors focused on the potential £300 million profit hit from the cyber attack disruption, which it warned could last until July.
Hargreaves Lansdown analyst Aarin Chiekrie said: “The cyber attack is likely a one-off event, and the underlying business is performing well.
“M&S is gaining market share, improving profitability, and the balance sheet is in great shape.
“The ongoing negative headlines have caused the valuation to fall in recent weeks, and it now sits in line with peers, which doesn’t look too demanding given the above-average growth in food.
“This could mark an attractive entry point for investors willing to ride out some turbulence in the near term.”
M&S and JD Sports fall in weaker FTSE 100, housebuilders drop
08:32 , Graeme EvansMarks & Spencer shares have fallen 4% or 14.3p to 353.3p after the retailer provided a £300 million profit estimate on the hit from cyber disruption.
The guidance, which is before insurance and cost reduction measures, offset a forecast-beating performance in annual results and a 20% increase in dividend to 3.6p a share.
The shares were 411p prior to the attack over the Easter holiday.
Today’s hotter-than-expected inflation figures contributed to a disappointing performance by the FTSE 100 index, which eased 11.13 points to 8769.99.
The potential impact of the inflation print on mortgage affordability meant housebuilding stocks were among the fallers, with Barratt Redrow down 11p to 465.6p and Taylor Wimpey 1.9p cheaper at 118.5p.
JD Sports Fashion surrendered recent gains, falling 8% or 7.3p to 85.7p after it said like-for-like sales fell 2% in the 13 weeks to 3 May. It said the performance was in line with expectations amid volatile trading conditions.
JD Sports in line with hopes, low visibility on tariffs impact
08:02 , Graeme EvansJD Sports Fashion today described market conditions as volatile but said it had traded in line with expectations during the first quarter of its financial year.
Like-for-like sales fell 2% in the 13 weeks to 3 May.
The update came as the transatlantic retailer reported an underlying profit of £923 million for the year to 1 February, down 4% on a year earlier but in line with January’s guidance.
It ended the period with 4850 stores worldwide, an increase of 1533 on the start of the period due mainly to the acquisitions of Hibbett and Courir.
On tariffs, it sees the strain on US consumer demand because of higher costs of goods and services as the largest potential impact on the group.
It said it is diversifying the range of countries from which it sources own brand and licensed products.
Chief executive Régis Schultz added: “The market remains volatile and visibility on the overall potential impact from tariffs is low.”
Inflation surprise deals blow to rate cut outlook
07:47 , Graeme EvansCapital Economics today said the higher-than-expected inflation print of 3.5% “casts a little doubt on expectations that interest rates will continue to be cut gradually”.
It added: “This was more than an energy and water story. Most worrying is that the rises in core inflation, from 3.3% to 3.8%, and services inflation, from 4.7% to 5.3%, were both stronger than expected.”
With the labour market weakening, the consultancy said there is less chance that the rebound in CPI inflation will feed into the longer-lasting influences of faster wage growth and much higher inflation expectations like it did in 2021-23.
However, the rate is already close to the Bank of England’s forecast in February that inflation would peak at 3.7% this year.
“As a result, these figures will make the Bank more alert to the possibility that this rebound in inflation will be bigger and last longer than it had been thinking.”
Currys lifts guidance as sales accelerate, dividend to return
07:39 , Graeme EvansElectricals chain Currys today said profits for the year to 3 May will rise by a bigger-than-expected 37% to £162 million. It previously forecast around £160 million.
Like-for-like sales growth accelerated to 4% in the final 17 weeks of the 2024/25 financial year, having been 2% stronger over the peak trading season.
It said the robust performance underpinned its intention to resume dividends when it publishes annual results on 3 July.
Chief executive Alex Baldock said: “We finished another year of strengthening performance on a high note with encouraging momentum and accelerating sales growth in both the UK & Ireland and the Nordics.
“In both, we've grown profits by delivering sales growth, market share gains and gross margin increases.”
M&S estimates £300m hit from cyber attack
07:14 , Graeme EvansMarks & Spencer today warned it faces a £300 million hit to profit following the cyber attack that has severely impacted its operations since Easter.
The operating profit estimate for the 2025/26 financial year is before insurance and cost management initiatives.
It warned that online disruption in its fashion, home and beauty division is set to continue throughout June and into July “as we restart, then ramp up operations”.
Announcing annual results, chief executive Stuart Machin said: “Over the last 140 years, M&S has overcome many challenges - testament to the longevity of this brand.
“This incident is a bump in the road, and we will come out of this in better shape, and continue our plan to reshape M&S for customers, colleagues and shareholders.”
M&S reported an operating profit of £984.5 million for 2024/25, representing a 17.4% improvement on the year before.
It added: “We are confident that we will enter the second half with a strong customer proposition, returning to the performance we were delivering immediately prior to the incident and throughout 2024/25.”
Inflation jumps to highest level since January 2024
07:03 , Graeme EvansThe UK’s annual rate of inflation today jumped by more than expected to 3.5%.
The increase, which compared with the previous month’s 2.6%, follows a surge in energy and water bills. It is the highest level since January 2024.
City analysts had forecast a figure of 3.3%.
FTSE 100 opens near record, US stocks fall back
06:58 , Graeme EvansThe FTSE 100 index is set to open slightly higher, having risen for a fourth straight session to near the record close of 8871.31 set in early March.
London’s top flight opens at 8781.12 after last night’s 0.9% improvement.
Today’s session is likely to be more subdued after the Dow Jones Industrial Average closed down 0.3% and the S&P 500 index and Nasdaq Composite fell 0.4%.
IG Index futures currently indicate a rise of about 0.1% at the opening bell.
Asia markets have posted a mixed performance, with the Nikkei 225 down 0.3% and the Hang Seng index 0.6% higher.
