Yahoo Finance Halfords sales buoyed by more expensive bikes
Cyclists willing to pay more for their rides helped to boost sales at Halfords during the festive period, the bike and motor parts retailer said, as it revealed its new boss had taken the driving seat.
Halfords reported a 3.2pc lift in sales over the 15 weeks to January 12, buoyed by a strong performance in its low-margin cycling division.
Like-for-like cycling sales jumped by 7.8pc over the 15 weeks as new bikes continue to be a popular Christmas present. The sales lift was a sharp increase on the 2pc growth reported the previous quarter when the company cautioned that higher prices might be weighing on sales.
Bikes have become more expensive this year because the majority of models are made overseas or include imported parts which have soared in price as a result of the weaker pound.
Jonny Mason, chief financial officer, said Halfords was "pleased" with the overall performance of the company during the 15-week period "given the difficult UK retail environment".
"We achieved record sales for Black Friday and Christmas thanks to great planning and execution and compelling product and service offers", he added.
Like-for-like sales at Halfords car maintenance division, which includes new car headlamp bulbs and de-icer, grew by 2.1pc over the period. That offset a 4.1pc slip in its travel solutions business which has suffered a fall in sales of satnavs as drivers increasingly use their smartphones to navigate the roads.
Despite the upbeat trading performance, Halfords cautioned that it expects the UK retail environment to "remain subdued" for the rest of the year. The company said that profits would be "broadly in line" with City expectations because sales were driven by lower-margin bikes. Analysts took this to mean the figure would come in below estimates, and revised consensus to around £70m from £74m.
The company said it was continuing to work on offsetting the currency impact of a weaker pound across its business. Halfords has previously said that it was facing £25m of higher costs over the financial year.
Halfords revealed that new chief executive Graham Stapleton started on Monday. Mr Stapleton joined from Dixons Carphone after former boss Jill McDonald was poached by Marks & Spencer to lead its efforts to revive its struggling clothing division.
Jonathan Pritchard at Peel Hunt said: "The new chief executive has quite the task in turning momentum around here: yes, Halfords is market-leader in a number of categories and that clearly has a value but galvanising the customer base has been something that many have tried to do and failed. We await his inspiration keenly."
