Marks & Spencer (M&S) has delivered a steadier than feared Christmas trading update, offering some festive cheer for investors after a year, overshadowed by a costly cyber attack and months of disrupted online sales.
The retailer reported group sales of £5bn for the 13 weeks to 27 December, up 3.3 per cent excluding Ocado Retail, with food once again doing the heavy lifting.
The performance marks an important moment for M&S as it looks to draw a line under the April cyber incident that knocked out online orders for almost two months and dented confidence in what had been one of the high street’s strongest turnarounds.
Food sales rose 6.6 per cent, with like-for-like growth of 5.6 per cent and UK volumes up 2.3 per cent, helping M&S reach a record four per cent grocery market share.
The retailer said it was now the UK’s fastest-growing grocer for families, benefiting from investment in value lines and core staples as shoppers remained price-conscious over Christmas.
Chief executive Stuart Machin struck a confident tone as he sought to move the narrative on from last year’s disruption. “A record number of customers shopped M&S this Christmas,” he said. “From the festive food shop, to picking up party outfits and gifts, millions more trusted M&S to deliver the family Christmas.”
The supermarket giant’s shares rose 3.26 per cent following the update, now trading at 339.20 pence, as investors welcomed signs that Christmas trading helped park cyber fallout worries at bay.
Cyber hangover still lingers for fashion
The picture was more mixed in Fashion, Home & Beauty, where sales fell 2.5 per cent and like-for-like sales slipped 2.9 per cent.
M&S said weaker store footfall and the “long tail” of stock disruption caused by the cyber attack earlier in the year continued to weigh on performance, even as online sales recovered.
Machin said the division was “getting back on track”, pointing to improving digital performance and a larger-than-usual Christmas Sale that is already clearing the decks for new-season ranges.
“We planned a bigger sale this year, with strong sell-through already making way for our new season lines,” he added.
The update comes as M&S continues to absorb the financial fallout from the cyber attack, which the company now expects to cost £136m by 2026, partially offset by £100m of insurance claims.
The incident halved profits in the first half of the year and forced a prolonged suspension of online and click-and-collect services, a bitter blow for a business that had been enjoying an uphill climb before the hack.
International sales nudged up 0.9 per cent, while Ocado Retail, now consolidated into M&S’s numbers, delivered sales growth of 13.7 per cent, with M&S products accounting for around 30 per cent of Ocado’s total sales.
Looking ahead, the group reiterated unchanged full-year guidance and said it would accelerate its “reshaping” strategy into 2026, despite fragile consumer confidence and a tough retail backdrop.
“Today, we are regaining momentum,” Machin claimed. “Our ambitions are undimmed, and our determination to knuckle down and deliver is stronger than ever.”
After a year defined by cyber disruption and what-ifs, M&S’s Christmas performance suggests the comeback story may yet be back on track.