Sosandar lowers FY26 guidance after M&S cyber attack
The company previously expected £46.2m in revenues for FY26 and £1.5m in adjusted pre-tax profits, but has now made the decision to pause new store openings
Sosandar has lowered its profit expectation for the current year, revealing that it now expects revenues to rise 18% to £43.6m with pre-tax profits of £400k, after a cyber attack at its second largest third-party partner M&S disrupted sales in the first quarter.
The company previously expected £46.2m in revenues for FY26 and £1.5m in adjusted pre-tax profits, but has now made the decision to pause new store openings to focus on making its existing six stores profitable.
In the year to 31 March 2025, revenues fell to £37.1m from £46.3m the previous year, which the company attributed to its “deliberate transition away from price promotional activity” to protect margins.
As a result, gross margins improved to 62.1% from 57.6%, with an adjusted profit before tax of £200k, compared with a £300k loss a year earlier. After audit adjustments, including a £400k stock write-down and £200k of warehouse relocation costs, the company posted a statutory pre-tax loss of £100k.
Sosandar ended the year with £7.3m in cash, despite opening six stores during the period. It also signed a licensing agreement with Next for a homeware range, moved to a new warehouse, and reported strong trading with its established third-party partners.
In the first quarter of the current financial year, revenues grew 15% to £9.5m, with gross margin improving further to 65%. Website sales also rose by 15%, supported by higher traffic and more orders from both new and returning customers.
Ali Hall and Julie Lavington, co-chief executives of Sosandar, said: “During the last year we’ve strengthened the foundations of the business, which will enable us to deliver our growth and profit ambitions going forwards.
“Taking the decision to reduce price promotions has resulted in an expected reduction in revenue but significantly improved margins and cash generation which, in turn, has allowed the group to maintain a robust balance sheet and self-fund its growth plan.”
They added: “Nonetheless, we believe we are now at an inflection point, with the foundations laid for profitable, cash generative growth, and we have returned to revenue growth in Q1 FY26. We will continue to leverage our brand equity and scale the business through our multiple channels and are excited for what lies ahead for Sosandar.”
