British retailer Marks & Spencer has projected a return to profit growth as it recovers from a major cyberattack that disrupted its operations and affected annual earnings.
The company announced on Wednesday that profit after tax for the financial year ending March fell by 12.3 percent to £259 million ($347 million), compared with the previous year.
According to the retailer, the cyberattack resulted in losses and related costs estimated at £131 million after online sales were disrupted for about six weeks and some customer data was compromised.
The incident also forced the company to temporarily suspend online shopping services, contactless payments in stores, and parts of its recruitment operations.
Chief executive Stuart Machin said the company remained focused on customers throughout the crisis and had emerged stronger after the disruption.
“We were laser focused on our customers, worked incredibly hard to recover our business, and we came out stronger,” Machin said in a statement.
Despite the challenges, the retailer expressed confidence in returning to profit growth during the current financial year.
Marks & Spencer described the past year as “a year of two halves,” with the first half heavily impacted by the cyber incident, while the second half saw a recovery in sales and profitability.
The company’s fashion, home and beauty division recorded a 7.7 percent decline in sales during the period, while food sales increased by seven percent.
Machin also warned that retailers continue to face significant economic pressures, including higher taxes, increased regulation and rising operating costs linked to ongoing tensions in the Middle East.
The company highlighted increases in fuel, freight and input costs as major concerns affecting the retail sector.
Reacting to the results, Russ Mould said the company’s recovery appeared to be back on track despite the earlier setback.
“The crisis now looks more like a blip in a story of continuing recovery at Marks,” Mould said, adding that investor confidence had been boosted by an increase in dividends and expectations of renewed growth.
Shares of Marks & Spencer rose by four percent on the FTSE 100 in London trading following the announcement.
