Halfords maintains FY guidance despite weak December sales
According to the group, stronger sales in Motoring and needs-based categories were partly offset by weaker spend in discretionary areas over the period
Halfords has maintained its full-year guidance despite December sales being “much weaker” than expected.
In its third quarter, total revenues were up by 1.6%, and 2.0% on a like-for-like basis. According to the group, stronger sales in Motoring and needs-based categories were partly offset by weaker spend in discretionary areas over the period.
October and November sales were strong, but the weaker December trading was driven by a combination of the mild and wet weather, which impacted demand for winter products and footfall into stores. Halfords also noted customers were balancing “difficult spending decisions” in the lead up to Christmas.
This was most pronounced in Retail Motoring, where monthly LFL growth averaged +10.2% in October and November, but fell to a -15.3% decline in December.
Whilst market share gains continued in Retail Motoring, Cycling, Consumer Tyres and Motoring Servicing, market volumes remained below expectations. Cycling market volumes were down (5.1%) in Q3 and were around 28% below pre-pandemic levels, whilst the Consumer Tyres market was down (2.6%) in the quarter.
Looking ahead, the group said that “assuming that markets do not weaken further in Q4”, it continues to expect profits to fall within the previously stated range of £48m to £53m.
CEO 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.”
He added: “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.”
