Automotive and bike products retailer Halfords has seen full-year sales drop 5.5 per cent after poor fourth quarter trading, according to a pre-close financial statement released today.
Leisure was the only product category to see growth for the retailer in Q4, with total LFL retail sales down 6.8 per cent year-on-year.
Car maintenance items saw the biggest decline in trade in the 13 weeks to April 1st, with trading down 11.7 per cent in the quarter compared to a 0.2 per cent rise for the full 52-week period.
Halfords was keen to point out that cycle sales returned to growth in Q4, up 8.7 per cent compared to the same period last year, and online sales were up 52 per cent during a tough trading period.
David Wild, CEO of Halfords, added: “We believe the environment will remain difficult for customers.
“We are responding with a trading strategy that offers great value, expert services and many new products; including the re-launch of our entire Premium Cycle range. In Halfords Autocentres we will build on the good early results since rebranding.
“Our plans are supported by the launch of our new campaign ‘That’s Helpful That’s Halfords’ which will reinforce our unique service proposition. These initiatives give us the potential to trade more strongly in the year ahead.”
Its Autocentres network, which expanded by 240 centres last month, also had a disappointing final period with LFL sales down 1.4 per cent in the quarter, but its trading did grow 1.1 per cent over the year.
Car enhancement sales continued to struggle, with LFLs down 11.7 per cent in Q4 and 12.3 per cent in the full year, and leisure was the only category to be up on the same period last year with trading increasing 6.1 per cent over the 13 weeks.
Gross margins stayed broadly flat throughout the year and Halfords now expects profit-before-tax to be between £124 million and £127 million when preliminary results are published in July.
Also announced today was Halfords plan to implement a share buy-back programme of up to £75 million with immediate effect.
Wild continued: “We are pleased to announce the launch of a share buyback programme.
“The strength of our cash generation and our balance sheet means that we can both return capital to our shareholders, maintain our dividend policy and retain the flexibility to invest when we identify the right opportunity.”
In the year ahead the retailer expects gross margins to fall 30 base points due to further investments, it will focus on its new advertising campaign and solidify its leading market position, and plans to open 30 new autocentres over the 12 months.