Halfords has posted a surge in sales during the pandemic period driven by a spike in demand which has seen both its cycling and motoring divisions deliver growth.
The cycling specialist posted a 5% increase in like-for-like sales across its portfolio in the 20 weeks to August 21, spurred by a 160% surge in online sales.
Cycling revenue was up 59.1% on a like-for-like basis while Halfords’ service-related sales rose 6.3% as the retailer capitalised on shoppers holidaying in the UK and commuting by bike amid coronavirus uncertainty.
The cycling specialist is on track to deliver a 300 basis points uplift to its gross margin in its current financial year as a result of this surge in demand.
Halfords autocentres division registered a 30.2% uplift in revenue during the period spurred by a 160% boost in online sales.
The retailer said it expects its half-year profits to be in the range of £35m and £40m, but warned that “significant uncertainty” remained about its performance in the second half of its financial year “given the natural fall-off in the relative strength of cycling and staycation products during winter months, alongside a difficult economic outlook”. Halfords said these factors meant it was like that its profitability in the second half of the year would be substantially below its first half.
Chief executive Graham Stapleton said: “We are pleased to have delivered a strong trading performance during the period. We have been able to move quickly in order to capitalise on the continued strong demand for cycling products, with sales of electric bikes and scooters up 230% year-on-year, while cycling services have been boosted by our free 32-point bike check and the Government’s Fix your Bike Voucher scheme. We have also seen a return to growth in our motoring business, driven by an increase in car journeys and by a high level of demand for staycation-related products such as roof bars and roof boxes.
“It has been especially encouraging to see our investments in key strategic initiatives both drive, and enable, such a resilient performance, allowing us to capitalise on favourable market shifts. In the last 12 months we have tripled our investment in the ongoing development of our web platform to enable a dramatic shift to online ordering, with sales up +160% year-on-year and representing 54% of total revenue in the period.
“However, there is still significant uncertainty around the impact of COVID-19 and the macro-economic environment in the coming months, and as a result we are cautious on the outlook for the remainder of this year. Looking further ahead, we are confident in the long-term strategy of our business and in the growth prospects of the cycling and motoring markets in which we operate.”
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