Halfords has maintained its full-year profit guidance after a “resilient” third quarter in what the retailer said remains a “very challenging consumer environment”.
For the 13 weeks to December 29, 2023, the motoring and cyclist specialist recorded a 1.6% increase in total revenue year on year, while like-for-like revenue was up 2% for the period.
Halfords saw “stronger” sales across its motoring category, up 0.7% compared with a decrease of 1.2% revenue growth across cycling, which it attributed to a “weaker spend in discretionary areas”.
The retailer noted that sales in December were “much weaker” than the previous two months due to the mild and wet weather reducing demand for winter products and footfall into stores.
It added that customers notably had to balance “difficult spending decisions” ahead of Christmas.
Halfords said in a statement that it continued to gain share across all four key markets: retail motoring, cycling, consumer tyres and motoring servicing. It said B2B revenue was also “strong”, up 6.9%.
In terms of outlook, the retailer said it expects profit before tax to fall within its previously pledged guidance of between £48m and £53m, confirming it has seen a “strong start” in the fourth quarter.
Halfords chief executive Graham Stapleton said: “In what remains a very challenging time for our customers, we are pleased to have delivered a resilient performance in Q3.
“Against the current backdrop, our continued strategic shift towards needs-based and motoring service-related revenues has never been more relevant.
“However, we are still seeing drivers delay essential maintenance and there is a worrying increase in potentially unsafe vehicles on the road. Recent TyreSafe data estimates that one in four tyres on Britain’s roads could be illegal, equating to just over 10 million tyres.
“We are continuing to grow share across all of our markets and are confident that the business is very well-placed to drive significant profit growth once those markets recover.
“Trading in Q4 has begun strongly and we remain focused on everything that we can control, with a number of initiatives underway to achieve further efficiencies within the business, as well as investing in areas where we see real opportunities for future growth.”
In today’s statement, Halfords also announced a new strategic partnership with tyre distributor Bond International, which it said will result in a cost reduction of £5m annually from full-year 2025 as well as a “better services and improved operational processes” for customers.