Halfords full-year profits slump

27th Jun 2024 07:55

(Sharecast News) - Halfords posted a slump in full-year profits on Thursday as it pointed to weak consumer confidence.

Underlying pre-tax profit fell 18.3% to £36.1m, in line with revised market guidance, with revenue up 7.9% to £1.7bn.

Halfords said a "very strong" performance in Autocentres and the success of its 'Better Buying' programme helped to offset forex headwinds and increased promotional activity driven by cycling market consolidation.

The retailer said volumes in two of its core markets - cycling and consumer tyres - were worse than independent forecasts anticipated a year ago.

The group said customer confidence has remained weak, driven in part by rising interest rates. This has dented demand for both discretionary big-ticket items such as bikes and touring, and less discretionary big-ticket products, such as car tyres.

In addition, unfavourable weather impacted key periods of the year, with high rainfall in the summer and winter reducing demand for cycling, car cleaning and touring products. The poor weather also affected footfall in stores, while the lack of cold snaps in the winter hit sales of blades, batteries and winter products.

Halfords said trading since the start of FY25 has remained soft. While it continues to expect market share gains in the year ahead, based on what it is currently seeing, it expects market volumes to decline in cycling and consumer tyres, and to remain broadly flat in motoring servicing and retail motoring products.