Analysts pessimistic as sales slip at Halfords

Cycling outperformed and like-for-likes in the category climbed 11.5% as premium bikes drove sales. However, car enhancement like-for-likes slumped 10.6% and car maintenance dropped 2.8%.

Halfords said gross margin is anticipated to decline by “at least” 100bps for the full year as it invests in promotions and sells more lower margin products.

Shore Capital analyst Ramona Tipnis downgraded her 2012 pre-tax profit forecast by 6% to £99.2m.

Oriel cut its forecast by 10%. Analyst Jonathan Pritchard said: “The consumer remains under a dark cloud. We considered Halfords to be a defensive play and now it seems it is just as exposed to a lack of discretionary income as most of the retailers.”

Like-for-likes at Halfords Autocentre business were up 2.1%.

Halfords chief executive David Wild said: “Halfords is continuing to trade effectively. Our response to the economic challenges is a strategy that offers value, quality, innovative products and expert service.”