Investing.com -- Marks & Spencer (LON:MKS) shares fell more than 3% on Wednesday despite reporting stronger-than-expected full-year earnings, as the company disclosed a larger-than-anticipated hit from a recent cyber attack.
The retailer posted profit before tax of £876 million for the fiscal year, exceeding consensus expectations of £837 million and topping RBC Capital Markets’ high-end estimate of £850 million.
Segment performance was above forecasts across the board. Food EBIT reached £484 million, ahead of RBC’s estimate of £475 million, while Clothing & Home EBIT came in at £475 million, exceeding the £459 million forecast.
International EBIT was £49 million, slightly ahead of the £46 million projection. The loss from the joint venture with Ocado (LON:OCDO) was -£29 million, in line with expectations.
Marks & Spencer ended the year with a net funds position of more than £400 million, above the £350 million anticipated by RBC. The company increased its dividend per share by 20% year over year.
In guidance for the current year, the company said it expects an unmitigated EBIT impact of about £300 million from the cyber attack.
That figure is above RBC’s recent estimate of a net £100 million. Around one-third of that hit has been incurred so far, with a similar portion affecting the Food segment. The company attributed the impact in Food primarily to increased waste and stock loss.
In Clothing & Home, Marks & Spencer expects online fashion operations to resume in the coming weeks, with activity ramping up gradually through the first half of the year.
Capital expenditure is projected at £600 million to £650 million, above RBC’s £550 million estimate.
RBC sees a 10% to 15% downside risk to the consensus FY26 profit before tax forecast of approximately £850 million. The FY27 consensus estimate of £960 million is expected to remain unchanged.
RBC noted improved performance in the Food business, citing better value perception, while Clothing benefited from changes in design, third-party brand partnerships and range improvements. The brokerage also said the company’s long-term brand perception remains strong.