Demand for motoring essentials sees sales rise for Halfords
The retailer reported a 14.1% rise in total revenues over the five months to August 18, with sales up 7.8% on a like-for-like basis.
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Your support makes all the difference.Retailer Halfords has seen strong demand for motoring maintenance and servicing boost sales, but said retail trading was held back by unsettled summer weather and falling consumer confidence.
The car parts to bikes firm said “needs-based” products and services were the main driver behind a 14.1% rise in total revenues over the five months to August 18, with sales up 7.8% on a like-for-like basis.
Like-for-like sales soared 16.6% across its autocentres chain, while retail sales rose 3.4%.
Spending on discretionary ranges was more lacklustre so far in its second quarter, with cycling, car cleaning and touring products hit by “unfavourable weather and low consumer confidence”.
Group motoring, which now accounts for over 75% of our total sales, is a resilient sector
Bike sales fell 2.7% on a comparable basis, the group said.
Halfords said it was on track with full-year expectations, forecasting pre-tax profits of between £48 million and £58 million.
It said in June that profits are expected to grow in the year to June 2024, although the lower end of the guided range would see a drop on the £51.5 million reported for 2022-23.
But Halfords said most analysts were forecasting £53.7 million for the current year, a result chief executive Graham Stapleton said was “achievable” despite a less certain consumer outlook.
He told the PA news agency the wide profit range given in its latest update reflects a “slightly softer second quarter”.
“The weather was not that great in July, interest rates are expected to stay higher for longer and inflation is being more stubborn and that will impact consumer disposable income.”
He added there were more “risks now with delivery, hence the range”, with the consumer outlook over the second half “difficult to call”.
Shares in the firm lifted nearly 2% in afternoon trading on Wednesday.
The group is expecting first half profits to be weighed down by higher costs, with efforts to make savings set to bear fruit in the second half.
This is predicted to help second half profits come in “significantly ahead of last year, with autocentres making up a higher proportion of group pre-tax profits, alongside increased cost and efficiency savings versus 2022-23”, according to the company.
Mr Stapleton said: “It’s been a good start to the year for Halfords, and our ongoing focus on essential maintenance and servicing is driving a strong performance in our autocentre and retail motoring business.
“Group motoring, which now accounts for over 75% of our total sales, is a resilient sector and we’re progressing with our long-term plans to become a one-stop shop for motoring ownership.”
He added: “We’re continuing to do everything that we can to support our customers through the cost-of-living crisis and are determined to offer them unrivalled value.”