Halfords posted a profit warning after its cycling, motoring and tyres business took a hit.
The retailer slashed its full-year profit guidance from the £48m and £53m range forecast in Q3, to between £35m and £40m for the year ended 29 March.
It said conditions would not change for the rest of its financial year, including the peak Easter cycling period.
The business said despite having continued to take “decisive action” on cost, this would not be sufficient to offset the “significant market deterioration” between now and the end of the financial year.
Halfords claimed its cycling and retail motoring businesses had been “impacted by a combination of continued weak customer confidence and unusually mild and very wet weather, which affected footfall into stores and sales of categories such as winter and car cleaning products”.
It added that the cycling market had become more challenging and competitive as it continued to consolidate, with promotional activity increased and more shoppers purchasing on credit leading to “weaker gross margins than previously anticipated”.
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Halfords said it continued to deliver good growth in its autocentres business, noting that although the consumer tyres market worsened in January, it saw a strengthening service, maintenance and repair market with good customer demand.
Looking ahead to its next financial year, Halfords said it remained cautious on market recovery in the short-term, with the current “significant volatility” in market conditions making forecasting accurately challenging.
However, it expects profits to be “broadly in line with that forecast in FY24”.
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