Halfords sales rise but remains cautions due to “Covid-19 uncertainty”

Halfords Graham Stapleton covid-19
Halfords expects half-year profits to be in the range of £35 million and £40 million
// Halfords sales rise 5% across its portfolio
// Cycling revenue up by over 59% as Brits commuted by bike during height of pandemic
// Online sales rise 160%

Halfords has seen its sales rise as the Covid-19 pandemic created a surge in demand for its cycling and motoring offers.

The retailer recorded a five per cent increase in like-for-like sales across its portfolio in the 20 weeks to August 21, driven by a 160 per cent rise in online sales.

Cycling revenue rose by 59.1 per cent on a like-for-like basis, while service-related sales rose 6.3 per cent as the retailer benefited from shoppers commuting by bike.

READ MORE: Halfords appoints former Moss Bros finance director to the board

Halfords said it is currently on track to deliver a 300 basis points uplift to its gross margin in its current financial year.

Meanwhile, its autocentres division saw a 30.2 per cent rise in revenue during the period thanks to the rise in online sales.

Halfords expects half-year profits to be in the range of £35 million and £40 million.

However, it warned that “significant uncertainty” remained about its performance in the second half of its financial year due to a drop in cycling sales during the winter months.

“We are pleased to have delivered a strong trading performance during the period,” Halfords chief executive Graham Stapleton said.

“We have been able to move quickly in order to capitalise on the continued strong demand for cycling products, with sales of electric bikes and scooters up 230 per cent year on year, while cycling services have been boosted by our free 32-point bike check and the government’s Fix your Bike Voucher scheme.

“We have also seen a return to growth in our motoring business, driven by an increase in car journeys and by a high level of demand for staycation-related products such as roof bars and roof boxes.

“It has been especially encouraging to see our investments in key strategic initiatives both drive and enable such a resilient performance, allowing us to capitalise on favourable market shifts.

“In the last 12 months we have tripled our investment in the ongoing development of our web platform to enable a dramatic shift to online ordering, with sales up 160 per cent year on year and representing 54 per cent of total revenue in the period.

“However, there is still significant uncertainty around the impact of Covid-19 and the macro-economic environment in the coming months, and as a result we are cautious on the outlook for the remainder of this year.

“Looking further ahead, we are confident in the long-term strategy of our business and in the growth prospects of the cycling and motoring markets in which we operate.”

Last month, Halfords appointed former Moss Boss finance director Tom Singer as a new non-executive director.

Singer’s stint at Moss Bros was between 1997 and 2000, but more recently he was InterContinental chief financial officer and Bupa group finance director.

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