Halfords maintains profit guidance after ‘solid’ festive sales

The cycling and automotive specialist said group like for likes increased 1.3% during the 14 weeks to January 3. Retail like for likes grew 0.8% – buoyed by a 5.9% uplift in like-for-like cycling sales – while revenues from its autocentres were up 4.6% on the same basis.

Halfords’ total sales climbed 4.6% across the group during the quarter but edged up just 0.6% in its retail business.

By comparison, total sales in its autocentres surged 31.2%.

Halfords reaffirmed its view that full-year profits would be between and £50m and £55m.

The retailer hailed strategic progress to “optimise the cycling space” in its stores and create “more innovative and differentiated” ranges.

Halfords said this “created a better shopping experience for our customers during the peak holiday period”.

Although retail motoring like for likes were down 2.7% during the quarter, Halfords said this was an improvement on the first half and insisted it took market share in core motoring categories.

Online sales jumped 27% across the 14 weeks, while service-related revenues, which now account for 27% of Halfords’ group sales, grew 16%.

Halfords said “good” product ranging and innovation “negated the need for either heavy or early discounting” during the period, helping it deliver gross margin growth. Margins were boosted further by the retailer’s ongoing focus on costs and driving operational efficiencies.

Boss Graham Stapleton said: “Our results reflect the positive actions we have taken across the group to deliver on our strategy, particularly motoring services, which grew strongly.

“Within retail, cycling performed particularly well, as customers responded to our innovative product ranges and differentiated proposition. Approximately 85% of our bike range is unique to Halfords, including our successful partnership with Disney and the development of an innovative range with Trunki, both of which helped to sell a record number of kids bikes in the period.

“In addition, our ability to provide customers with a unique, free, build and storage offer was met with strong demand, as we built 86,000 bikes in the week before Christmas.”

But Stapleton cautioned: “Market conditions remained subdued and we are not anticipating a near-term improvement. We will continue to focus on improving our customer proposition, building our services business and managing our costs and operations tightly.”