Halfords on a roll as profit forecast beats analysts’ expectations
Shares jump 20% on robust holiday sales and upbeat outlook
28 January 2025 - 14:08
byPushkala Aripaka
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A view of the Halfords store front in Rugby, Britain. File photo: MOLLY DARLINGTON/REUTERS
Shares of Britain’s Halfords jumped 20% on Tuesday after the bicycle and car products retailer reported robust holiday sales and forecast financial 2025 profit above analysts’ expectations.
Halfords said that Christmas gifting boosted like-for-like sales growth in cycling to 13.1% in December, while colder weather in recent months had helped its motoring products portfolio with like-for-like sales growth of 5.5% this month.
“In recent months we have seen an improvement in trading alongside continued progress on a number of key initiatives, including our pricing and promotion strategies and cost reduction measures,” the 130-year-old retailer said.
Its shares were up at 152p in morning trade.
Halfords said that it was on track to exceed its target of £30m in annual cost savings and now expected underlying pretax profit of £32m-£37m for the year ending March.
The company, with stores offering everything from car parts and accessories to bicycles, and has garages, mobile vans and home delivery services, had said in November that it was “comfortable” with market expectations for annual profit.
Analysts, on average, are expecting a profit of £28.3m, according to a company compiled consensus.
However, Halfords flagged that changes to Britain’s minimum wage and national insurance contributions would add direct labour costs of about £23m for financial 2026, when the policies take effect.
“While the impact of changes to the minimum wage and national insurance contributions are relatively easy to quantify ... their effects on the demand environment and health of the broader economy are harder to predict,” it said.
Peel Hunt analysts said that Halfords’ cost savings were “coming through ahead of hopes” and that will be important in light of the wage and insurance policies.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Halfords on a roll as profit forecast beats analysts’ expectations
Shares jump 20% on robust holiday sales and upbeat outlook
Shares of Britain’s Halfords jumped 20% on Tuesday after the bicycle and car products retailer reported robust holiday sales and forecast financial 2025 profit above analysts’ expectations.
Halfords said that Christmas gifting boosted like-for-like sales growth in cycling to 13.1% in December, while colder weather in recent months had helped its motoring products portfolio with like-for-like sales growth of 5.5% this month.
“In recent months we have seen an improvement in trading alongside continued progress on a number of key initiatives, including our pricing and promotion strategies and cost reduction measures,” the 130-year-old retailer said.
Its shares were up at 152p in morning trade.
Halfords said that it was on track to exceed its target of £30m in annual cost savings and now expected underlying pretax profit of £32m-£37m for the year ending March.
The company, with stores offering everything from car parts and accessories to bicycles, and has garages, mobile vans and home delivery services, had said in November that it was “comfortable” with market expectations for annual profit.
Analysts, on average, are expecting a profit of £28.3m, according to a company compiled consensus.
However, Halfords flagged that changes to Britain’s minimum wage and national insurance contributions would add direct labour costs of about £23m for financial 2026, when the policies take effect.
“While the impact of changes to the minimum wage and national insurance contributions are relatively easy to quantify ... their effects on the demand environment and health of the broader economy are harder to predict,” it said.
Peel Hunt analysts said that Halfords’ cost savings were “coming through ahead of hopes” and that will be important in light of the wage and insurance policies.
Reuters
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