Halfords sales revved up by electric bike trend and Brits taking ‘staycations’ as heatwave offsets the big freeze
- Halfords group like-for-like sales advanced 2.8% in the 20 weeks to mid-August
- It thanked strong sales of electric bikes and staycation-related products
- Shares jumped 6% on the news to reach 350 pence per share
Halfords delighted investors today by wheeling in a sales rise and maintaining its forecasts for the full-year.
The bikes and car parts specialist posted a 2.8 per cent jump in like-for-like sales for the five months to mid-August, despite enduring two periods of extreme weather and what it described as a ‘challenging retail environment’.
The update triggered a 6 per cent spike in the share price, which has been in the doldrums since Halfords issued a profit warning in May.
Halfords has been boosted by a surge in UK staycations since the value of the pound sunk
The retailer said the year got off to a ‘solid’ start with retail sales up 2.6 per cent, driven by the popularity of electric bikes and new car cleaning products, as well as a 4 per cent up tick in revenues at its vehicle maintenance Autocentres chain.
Weaker sales during the so-called Beast from the East were offset by an increase in demand for bikes and camping kit during the subsequent heatwave, it said.
Graham Stapleton took the helm at Halfords in January, joining from Dixons Carphone
Chief executive Graham Stapleton, who joined the firm from Dixons Carphone in January, said: ‘I am pleased with the trading performance for the first 20 weeks of the year in what continues to be a challenging retail environment.’
Halfords estimates full-year profits will be broadly in line with the £71.6million it reported in its last financial year, when sales were buoyed by Brits buying kit for ‘staycations’, which have become more popular since the slide in the value the pound.
The retailer also anticipates its Autocentres division being in the black by the end of the year as it continues to focus on turning that weaker part of the firm around.
Online sales revved up 11.3 per cent during the period, with the vast majority of shoppers collecting their orders in store.
Stapleton will give a strategy update at a capital markets event later this month.
AJ Bell investment director Russ Mould warned that, despite the robust numbers, ‘it is important not to get carried away given Halfords served up a profit warning as recently as May’.
‘However, it does provide some evidence that new CEO Graham Stapleton’s spending on customer service, staff training and marketing, while initially undermining profitability, may be beginning to have some impact on the performance of its stores,’ he added.