Halfords first-quarter sales driven by staycations

The cycling and motor specialist’s group sales increased 4.8% in the 20 weeks to August 1 – up 2.7% on a like-for-like basis.

In its retail division, total sales jumped 6.2%, and like-for-likes rose 3.5%, with travel solutions and cycling ranges the star performers.

Total sales at its Autocentres dropped 1.4%, while Halfords’ services arm continued to grow – up 18.3%.

McDonald – who is leaving Halfords next month to run M&S’ fashion and home business – said: “A combination of good planning and execution meant that we optimised sales from the staycation summer, with strong growth in camping, roof boxes and cycle carriers.

“This complemented our service-related retail sales, which grew significantly faster than our total sales, as we continue to demonstrate our relevance to the growing ‘do-it-for-me’ customer.”

McDonald added that the rise of staycations and a strong performances in Halfords travel solution sales indicated that ”more customers choosing to vacation in the UK rather than going overseas due to the impact of foreign exchange.”

A search for McDonald’s successor is under way, although the retailer did not provide a timeline of when the appointment would be announced.

Progress

Halfords’ online revenue jumped 11.2% during the period and the retailer said over 85% of Halfords.com orders are now collected in-store.

It has also opened 11 new-format stores, accelerated its plans to roll these stores out and expanded its range of motoring services to include car key fob repair and fuse fitting.

McDonald also highlighted dashcams and electric bikes as posted triple digit growth during the period.

Looking ahead, the business said it believes full-year profits will be in line with current market expectations.

It reaffirmed that currency headwinds, caused by the post-Brexit sterling slump, will cost the business around £25m in its current full-year, but said mitigation plans have been implemented and are “on track”. 

“We continue to anticipate that we will fully recover the FX impact over time,” the retailer said. 

In its previous full-year, Halfords’ sales jumped 7.2%, but pre-tax profit fell 7.5%.

At the time, McDonald said the retailer was taking a three-pronged approach to recovering profitability in the year ahead that comprised working with suppliers to mitigate currency fluctuations, driving business efficiencies and raising prices – though McDonald stressed that this would be “a last resort”.