Analysis: Have the wheels come off Halfords’ new strategy?

Halfords Derby  3

Halfords has unveiled a disappointing trading update and downgraded its profit guidance for the second time in 12 months.

The motor and cycling specialist suffered a 3.9% drop in total revenues in the 20 weeks to August 16, and trimmed its full-year profit expectations from £59m, which would have been flat year-on-year, to between £50m and £55m.

Within its retail division, where sales slumped 4.8%, Halfords suffered a 5.9% dip in motoring revenues, while cycling sales declined 1.1%. Boss Graham Stapleton attributes the sales slowdown to a combination of “poorer” summer weather and a lack of consumer confidence preventing shoppers from loosening their purse strings for big-ticket purchases.

The retailer’s 3.9% fall in like-for-like retail sales is particularly bruising, considering that Halfords is ploughed investment into “refreshing the cycling space” across 220 of its stores during the period.

And Stapleton warns that “given the uncertainty of the current environment”, Halfords does not anticipate its sales to improve significantly for the remainder of the financial year.

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