Halfords sees sales knocked by weather and consumer woes
The group said like-for-like retail motoring sales plunged 15.3% in December.
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Your support makes all the difference.Retailer Halfords has revealed weaker-than-expected trading amid mild weather and consumer cutbacks in the run-up to Christmas.
The group said like-for-like retail motoring sales plunged 15.3% in December, which it blamed on the weather and “customers balancing difficult spending decisions in the lead-up to Christmas”.
It said this marked a hefty reversal after growth of 10.2% on average in October and November.
It said overall retail sales were flat in the 13 weeks to December 29, with wider cycling and consumer tyres markets performing “significantly worse than anticipated” and weakening in the quarter.
We remain cautious on market recovery in the short term and we are not currently planning for a material improvement in our key markets in 2024-25
Halfords said that, while trading in motoring retailing has now recovered to levels seen in October and November, it is ramping up cost savings in the face of a “very challenging consumer environment”.
It said it still expects full-year profits to remain on track with previous guidance for between £48 million and £53 million, assuming markets do not weaken further over its final quarter.
But it added a note of caution over the outlook for the new financial year.
“We remain cautious on market recovery in the short term and we are not currently planning for a material improvement in our key markets in 2024-25,” the group said.
Chief executive Graham Stapleton said it is “a very challenging time for our customers”.
“We are still seeing drivers delay essential maintenance and there is a worrying increase in potentially unsafe vehicles on the road,” he said.
Trading in the fourth quarter has begun strongly and we remain focused on everything that we can control
But he added: “Trading in the fourth quarter has begun strongly and we remain focused on everything that we can control, with a number of initiatives under way to achieve further efficiencies within the business.”
The group is now looking to save more than £35 million over the current financial year, up from £30 million previously.
The update showed that sales in its autocentres chain lifted 5.1% on a like-for-like basis in a sharp pullback in growth seen previously.
Halfords said the consumer tyres market remained subdued as hard-up motorists rein in their spending, with “an upward trend year on year in the number of cars with tyres classed as unsafe with a tread depth below the legal limit of 1.6mm”.
It said it pared back declines in bike sales, with a 1.2% fall in the third quarter.