Halfords maintains profit guidance after “resilient” third quarter performance
Halfords has seen its group revenue rise by 1.6% in its third quarter as stronger sales in its motoring and needs-based categories were partly offset by weaker spending in more discretionary areas.
On a like-for-like basis, sales increased by 2% in the period.
While sales in October and November were strong, the company’s trading in December was much weaker due to a combination of mild and wet weather impacting demand and footfall, and customers being careful in their spending in the run-up to Christmas.
Like-for-like sales in Halfords’ retail business in the quarter were flat as sales in the motoring category edged up 0.7% and sales in cycling declined by 1.2%
Meanwhile, sales in the company’s autocentres business rose by 5.1% on a like-for-like basis.
Halfords said its B2B business continued to perform strongly in the quarter, with a revenue increase of 6.9% on the prior year. This was driven by robust growth with its fleet customers.
Graham Stapleton, Halfords chief executive, said: “In what remains a very challenging time for our customers, we are pleased to have delivered a resilient performance in Q3. Against the current backdrop, our continued strategic shift towards needs-based and motoring service-related revenues has never been more relevant.
“However, we are still seeing drivers delay essential maintenance and there is a worrying increase in potentially unsafe vehicles on the road. Recent TyreSafe data estimates that one-in-four tyres on Britain’s roads could be illegal, equating to just over 10 million tyres.”
If its markets do not weaken further in its fourth quarter, Halfords is continuing to expect its full year pre-tax profit to fall within the previously guided range of £48 million to £53 million.
Looking ahead to the new financial year, the company will continue to focus on driving profit growth through a combination of further cost savings and more profitable sales.
Stapleton said: “We are continuing to grow share across all of our markets and are confident that the business is very well-placed to drive significant profit growth once those markets recover. Trading in Q4 has begun strongly and we remain focused on everything that we can control, with a number of initiatives underway to achieve further efficiencies within the business, as well as investing in areas where we see real opportunities for future growth.”
