Home Estate Planning Halfords remains confident despite sales falling below expectations

Halfords remains confident despite sales falling below expectations

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Halfords has said it remains confident despite its third quarter sales falling below expectations.

The Redditch-headquartered group added it has been boosted by a “strong start” to its final quarter, “further cost action and resilient areas such as B2B performing well”.

The London-listed company said it will focus on “driving profit growth” through further cost savings, more profitable sales and its Motoring Loyalty Club.

However, Halfords said it remains “cautious on market recovery in the short-term” and that it is not “currently planning for a material improvement” in its key markets in FY25.

‘Significant competitive advantage’

In a statement issued to the London Stock Exchange, Halfords said: “Looking beyond FY25, we remain confident in the mid- and long-term future of Halfords and believe the business will be exceptionally well positioned when markets recover.

“Our scale, brand recognition and market leadership provide us with a platform that has significant competitive advantage.

“Given volumes in the cycling and consumer tyres markets are below pre-pandemic levels by c. 28 per cent and c. 14 per cent respectively, a market recovery alongside continued delivery of the strategy gives us confidence in our ability to grow profit significantly in the future.”

Without providing total figures, Halfords has announced that its group revenue increased by 1.6 per cent during the 13 weeks to December 29, 2023.

Revenue at its autocentres rose by 4.1 per cent by its retail sales fell by 0.1 per cent.

For the three quarters, Halfords’ group revenue has risen by 9.5 per cent, with autocentres rising by 22.4 per cent and retail by 2.1 per cent.

Halfords added that while its sales in October and November were “strong”, its takings in December were “much weaker” because of a combination of mild and wet weather impacting demand for winter products and footfall into stores, and “customers balancing difficult spending decisions in the lead up to Christmas”.

‘The business is very well-placed’

Chief executive Graham Stapleton 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. 

“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.”

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