Halfords has seen its share jump over six per cent in morning trading after it revealed healthy growth so far this year.
In the 20 weeks to August 17, the car and bike retailer posted a like-for-like revenue rise of 2.8 per cent, following growth of two per cent in the same period a year earlier.
This was driven by strong sales at its motoring arm, jumping 3.8 per cent while its autocentres enjoyed four per cent growth.
Though its cycling arm posted lacklustre growth of 0.8 per cent, online sales across both arms rose 11.3 per cent year-on-year.
“Achieving 3% sales growth in today’s environment is a decent result by any high street retailer’s standards, but profits are expected to stall at Halfords this year thanks to a weak pound and investment in customer services,” Hargreaves Lansdown’s senior analyst Laith Khalaf said.
“Motoring has overtaken cycling in terms of growth, and that’s positive for Halfords as that’s where the company makes the lion’s share of its profits. Declining car sales are actually a tailwind for Halfords, as more older models on the road means a greater need for parts and servicing.
“New CEO Graham Stapleton will update the market on strategy later in September, though we see no need to reinvent the wheel.
“In a retail market increasingly disrupted by online competitors, investing in personal services looks like the right approach. Upskilling the workforce will cost money in the short term, but should allow Halfords to carve itself a sustainable niche in the digital world.”
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