Halfords like-for-likes slip in a "difficult environment"

Group total sales edged up 0.3%.

Leisure was the star performer, rising 6.3% on a like-for-like basis, with cycling like-for-likes rocketing 11.5% as premium and new bikes drove sales.

However the motor side of the business struggled, with car enhancement like-for-likes slumping 10.6% and car maintenance down 2.8%

Halfords said gross margin is anticipated to decline by “at least 100bps for the full year” as the retailer invested in promotions and sold more lower margin products including its premium bikes ranges.

Within car maintenance Halfords benefited from growth in its fitting services. The retailer said it is growing market share in car enhancement.

Like-for-likes in Halfords Autocentre business were up 2.1%, with total sales increasing 7.4%.

Halfords cautioned that “conditions for the UK consumer remain difficult” but added that it “remains in a sound financial position”.

Halfords chief executive David Wild said: “Halfords is continuing to trade effectively in a difficult environment for UK consumers. Our response to the economic challenges is a clear trading strategy that offers value through great prices, quality, innovative products and expert service.

“The results can be seen most clearly in our strong cycling sales, where customers have responded favourably to our promotions and new products. Our position is supported by “that’s helpful that’s halfords”, a marketing campaign that reinforces Halfords unique service proposition.

“We are also pleased with the progress in our Autocentres business. The positive trend in sales has been achieved at a difficult time for motorists when they are reducing mileage. It demonstrates the strength of our proposition and the potential for the Halfords brand to grow in the garage-servicing sector.

“We remain confident in the cash generation capabilities of the business and with the combination of recommended dividend payments for FY11 together with the share buyback, we will return a total of £120m to shareholders.”