By Michael Susin
Halfords, the motoring-and-cycling products provider, has reaffirmed its profit guidance for fiscal 2024, despite weaker-than-expected sales in the third quarter. The company reported a 1.6% increase in revenue for the 13-week period ending December 29, with a like-for-like growth of 2.0%. Sales in the motoring and needs-based categories were partially offset by a decline in discretionary spending areas.
Despite the challenges, Halfords has managed to gain market share across all four of its key markets. However, market volumes have fallen below expectations, with cycling volumes down 5.1% during the quarter and approximately 28% lower than pre-pandemic levels.
The company remains confident in its underlying pretax profit forecast for fiscal 2024, which ranges from £48 million to £53 million ($61.1 million to $67.4 million), provided that market conditions do not deteriorate further in the fourth quarter.
While third-quarter sales fell short of expectations, favorable trading at the start of the fourth quarter, ongoing cost-cutting measures, and strong performance in areas such as business-to-business sales have bolstered the company's outlook for this period.
Looking ahead to fiscal 2025, Halfords plans to focus on profit growth by implementing additional cost-saving measures, increasing the profitability of its sales, and leveraging its loyalty club scheme. However, the company remains cautious about the short-term recovery of the market and does not anticipate a significant improvement in its key markets.