Halfords shares race ahead after sales cheer
The chain reported a 2.6% rise in like-for-like retail revenues for the 20 weeks to August 17.
Retailer Halfords has seen shares motor ahead after shrugging off “challenging” market conditions to post a hike in sales.
The car parts-to-bike-group reported a 2.6% rise in like-for-like retail revenues for the 20 weeks to August 17.
Its autocentres division saw comparable sales rise 4%, helping overall group like-for-like revenues rise 2.8% in the period.
Achieving 3% sales growth in today’s environment is a decent result by any high street retailer’s standards Laith Khalaf, Hargreaves Lansdown
Shares in the group surged 7% on the brighter sales result, which comes after Halfords warned in May that annual profits would remain broadly flat.
The group kept the guidance unchanged in its latest update.
Motoring sales were the star performer in the retail division – up 3.8% – thanks to strong demand for staycation-related products over the summer, as well as growth in fitting services, car cleaning products and tools.
Bike sales edged 0.8% higher after a hit from cold weather in early spring and the timing of Easter, although the group said it enjoyed a good peak summer selling period.
Electric bikes saw the strongest sales, according to Halfords.
Graham Stapleton, recently-appointed chief executive of Halfords, 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.
“In retail, sales growth was supported by fitting services, new ranges of workshop and car cleaning products, and electric bikes.”
Online sales increased 11.3%, it added, with 85% of orders now collected in store.
The figures come ahead of Mr Stapleton’s strategy update due later in September, which follows his appointment in mid-January.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Achieving 3% sales growth in today’s environment is a decent result by any high street retailer’s standards, but profits are expected to stall at Halfords this year thanks to a weak pound and investment in customer services.”
He urged Mr Stapleton not to “reinvent the wheel” in his upcoming strategy overhaul.