Poor weather & economic uncertainty affect Halfords sales

Halfords Graham Stapleton Brexit uncertainty profit warning
The retailer said it will focus on improving gross margin and reducing costs
// Halfords warns investors that “political and economic uncertainty” will affect sales for rest of 2019
// For the 20-week period to August 16, like-for-like group revenues fell by 3.2%
// Like-for-like sales fell 3.9%

Halfords has recorded a slump in revenues and warned investors that “political and economic uncertainty” will impact customers’ purchases.

For the 20-week period to August 16, the British retailer saw like-for-like group revenues fall by 3.2 per cent, thanks to weak motoring sales.

Halfords’ core retail business saw like-for-like sales fall 3.9 per cent after it was weighed down by a 5.9 per cent dive in motoring sales.

Retail cycling sales declined “in line with expectations”, falling 1.1 per cent, as it was impacted by worse weather conditions than in summer 2018.

Halfords warned investors that profits would be at the lower end of market expectations, pulling down pre-tax profit forecasts to a range of £50-£55 million after previously expecting a £50million-£59 million range.

The retailer said it will look to improve gross margin and reduce costs.

Despite the losses, Halfords said it saw “encouraging signs of progress” after introducing a new strategy last year.

Halfords reported growth in its services, online and business-to-business arms, but this was more than offset by heavy declines elsewhere.

“Despite sales growth in group services, online and business-to-business, we have seen our overall sales impacted by cooler, wetter weather and weaker consumer confidence year-on-year,” Halfords chief executive Graham Stapleton said.

“The market has been challenging but we are pleased to have seen increased market share in our core categories.

“In the second half, we believe the economic and political uncertainty will continue to impact big-ticket discretionary spend and, therefore, as in the first half, we will continue to focus on improving gross margins and controlling costs.”

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