Halfords Shares Go Downhill As Bike Sales Fall

Halfords has blamed a wet summer for a big plunge in bike sales.

The bicycle to car maintenance retailer said in a trading update that bikes sales had fallen 11% in the eight weeks to 28 August compared to the same period last year.

The news was followed by a fall of more than 7% in its share price.

Halfords said: "The disappointing Cycling performance was primarily driven by mainstream bikes, as well as associated parts and accessories.

"We consider this to be principally market-driven, reflecting greater levels of discounting as well as poor weather deterring casual cyclists.

The company, which has been led since May by former McDonald's UK boss Jill McDonald, had announced in June that annual revenues had topped £1bn for the first time .

It (Other OTC: ITGL - news) confirmed on Wednesday that it now planned to launch a "complete refresh" of children's bikes and accessories alongside a "series of compelling offers for customers."

It said that trading in all other areas of the business remained strong, despite Cycling being below market expectations, and first-half profits would be in-line with guidance.

Its weather explanation for weaker bike sales is supported by national statistics.

According to the Met Office, summer rainfall was up 13% on average by 26 August and the summer is set to have been wetter than all but five summers since 1988.

Ms McDonald said: "In my first three months at Halfords I have reviewed all aspects of the group and it is clear to me that Halfords is a strong business with a well-balanced portfolio of product and service categories, talented colleagues and considerable growth potential.

"This recent weakness in our Cycling sales is disappointing, but it comes after two years of very strong growth in the category and has been partly offset by strong growth in both Car Maintenance and Car Enhancement sales, which is a testament to the balanced nature of the business (Other OTC: UBGXF - news) ."