Halfords has lowered its annual profit forecast range to the lower end of previous expectations as it warned of a softening in discretionary big ticket products, despite posting strong sales and profits.
In the 26 weeks to 29 September 2023, the motoring and cyclist specialist saw revenue growth of 13.9% to £873.5m with like-for-like sales growth of 8.3% achieved despite a “challenging macro environment”.
Revenues across its retail and autocentres increased 3.2% and 33.9% respectively, while underlying profit before tax rose 15.8% to £21.3m compared to the same period last year.
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In the first half of the year, the company reported market share gains in all categories, ahead or in line with expectations.
It said categories, such as retail motoring and motoring services, showed strong growth and were in line with expectations but discretionary markets such as cycling, were “challenging and below expectations” due to the tough consumer environment.
The business now expects underlying profit before tax for 2024 to fall within the range of £48m pounds to £53m. It had previously forecast a £48m – £58m range.
Chief executive Graham Stapleton said: “Despite the challenging and volatile trading environment and slower than expected recovery in some of our markets, we have made a good start to the year, with substantial sales and profit growth, and increased market share across the business. At the same time, we supported our customers through the ongoing cost of living crisis by delivering great value – when they need it most.”
“In the face of continuing economic uncertainty, we remain fully focused on optimising every element of the business, and I’m particularly pleased with the very strong performance of Autocentres, where we are delivering significantly improved returns. In light of this, we are accelerating capital investment in the garage services operating model and customer experience in ten towns in the balance of this financial year.”
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