Halfords sales dip as consumers cautious ahead of Budget
22nd Oct 2024 09:25
(Sharecast News) - Halfords reported a small dip in sales on Tuesday as it said consumers remained cautious ahead of the Budget.
In the 26 weeks to 27 September, group like-for-like sales nudged down 0.1% versus "strong" prior year comparatives, when sales rose 8.3%.
Halfords said Autocentres delivered LFL sales growth of 0.8% against "exceptionally strong" 18% growth in the same period a year ago.
It pointed to strong growth in services, maintenance and repair but said tyres remained challenging as "price-conscious" customers traded down into budget ranges and due to elevated promotional activity in the premium market. The retailer also said that high levels of technician wage inflation persisted.
In the retail business, which accounts for around 60% of group revenue, LFL sales declined 0.7% following the UK's wettest spring since 1986.
Halfords said motoring products proved more resilient than expected, while leisure cycling remained challenging and performance cycling continued to outperform, with positive LFLs in Tredz.
The company said it was on track to deliver £30m of targeted full-year savings to mitigate around £35m of expected inflation.
Chief executive Graham Stapleton said: "While consumers remain cautious in their discretionary spending compounded by uncertainty around the contents of the upcoming Autumn Budget, we have continued to focus on controlling the controllables and I am pleased with our performance in the first half of FY25.
"Our services and B2B-led strategy has supported Halfords' growth despite two of our core markets remaining significantly below pre-Covid levels, enabling us to absorb more than £130m of inflation since FY20 while maintaining a strong balance sheet. In this environment we are focused on optimising the existing platform to drive near-term returns, while accelerating our investment in the Fusion concept to position us for growth in the coming years."
At 0915 BST, the shares were up 2.8% at 146p.