Despite suffering a major cyberattack in late May that disrupted its online operations for months, Marks & Spencer ended the first half of the year with a 22.5% increase in global sales. However, the fashion division faced a sharp decline in profitability, with its operating margin plummeting from 12% to 2.7%.
The British retailer attributed the weakened fashion segment performance largely to the cyber incident, which temporarily paralyzed its website and online orders. For the six months ending September 27th, the company reported a loss of £11.8 million ($15.4 million), reversing from a £278.6 million ($364 million) profit in the same period last year.
Overall operating profit also dropped significantly, falling from £448.7 million ($586.5 million) to £91 million ($118 million).
“The last six months have been an extraordinary period for the company, and the temporary effects of the (cybersecurity) incident can be seen reflected in the first half results,” Marks & Spencer stated.
These factors combined to weigh down the UK operator's first-half profits further.
Marks & Spencer's first-half results highlight how the cyberattack and operational challenges severely impacted profitability despite strong global sales growth.