Halfords has slashed earnings expectations after its main markets − cycling and motoring − were battered.

Halfords electric-bike-service

Halfords cut its full-year profit guidance from between £48m and £53m to between £35m and £40m. It cautioned that conditions would not change in the remainder of its financial year, which runs to the end of March and includes the peak Easter cycling period.

The retailer reported that its cycling and retail motoring businesses “have been impacted by a combination of continued weak customer confidence and unusually mild and very wet weather, which affected footfall into stores and sales of categories such as winter and car cleaning products”.

Volume in Halfords’ retail motoring market fell 5.1 percentage points in January, while cycling volume was down eight points and consumer tyres declined 4.3 points.

The retailer said the cycling market “has become more challenging and competitive as it continues to consolidate. Promotional participation has increased and more customers are purchasing on credit, leading to weaker gross margins than previously anticipated.”

Halfords struck a cautious note on its short-term prospects. It said “the current significant volatility in market conditions means that forecasting accurately is challenging” but underlying profit next year is likely to be flat on this one.

The retailer maintained: “Whilst we have reduced our profit guidance as a result of very challenging and exceptional short-term market conditions, we remain confident in our strategy and longer-term growth prospects. When our core markets recover, the platform we have built leaves us exceptionally well-placed to succeed.”