Investors were keen to see whether motoring and cycling store Halfords (HFD) did well over Christmas. In truth, the numbers were a bit of a mixed bag. True, the 15-week period ended 12 January 2018 saw an acceleration of sales quarter to quarter, but the 2.9 per cent rise in like-for-like retail sales actually represented a significant deceleration from the 7 per cent increase reported this time last year.
This year’s growth was largely fuelled by a successful season for cycling products. Sales in this department rose by 7.8 per cent, impressive given the weak pound has pushed bicycle prices up as many models and parts are sourced abroad. The store cited premium brand and electric bikes as particularly popular with customers.
Stronger bike sales might sound like a positive development, but these products actually run at a lower margin. What's more, falling demand for items such as sat navs pushed like-for-like sales of travel solutions down 4.1 per cent over the same period. Sales of car enhancement products also fell by 1.1 per cent.
The company has warned sales could remain “subdued” for the rest of the 2018 financial year, while group profits are predicted to come in “broadly in line” with expectations. Brokerage Peel Hunt believes profits could fall short of consensus forecasts, which they expect to move down from between £73m and 74m to around £70m for the year ending March 2018.
