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British retailers Marks and Spencer say they expect to see a £300 million hit this year’s profits from last month’s cyber attack.
Companies that have been disrupted by the hack are projecting a £300 million impact on group operating profit for this fiscal year prior to easing “through management of costs, insurance and other transaction measures.”
CEO Stuart Machine said the incident was “but it’s a moment” and “a road conflict” and there would be no change in the company’s plans for change.
The FTSE 100 group said that personal customer data was stolen during the first attack last week, leading to empty shelves at some stores that were unable to accept online orders for more than three weeks.
In an update parallel to the full year results on Wednesday, the company said online sales and trading profits for clothing and home-based products in the first quarter were hit by a decision to suspend online shopping due to the attack. The confusion is expected to continue from June to July.
Although this has been improved, he said food sales were also affected by a lower availability. The hack has incurred additional waste and logistics costs, wiping out almost £750 million from M&S’ market capitalization.
Some of the financial effects are reduced through insurance. The Financial Times reported earlier this month that Marks and Spencer could claim losses of up to £100 million.
M&S said Wednesday it is working 24 hours a day to contain “very sophisticated and targeted cyberattacks” and stabilize operations.
Cyberattacks overshadow the strong outcome of the year ending March 29th. The company increased its profits by 22.2% before tax and adjusted its items to £875.55 million (its preferred metric), exceeding analyst expectations. Sales increased 6.1% to almost £14 billion.
However, pre-tax profits fell almost 24% to £511.8 million due to a non-cash disruption of £248.5 million against a 50% stake in online supermarket Ocado Retail.
