Halfords shares jumped on Thursday after reporting strong performance across Autocentre and Retail, with the company pointing to its strategic initiatives as a driver of growth.
Halfords has reported underlying pre-tax profit of £45.4 million for the 53 weeks to 3 April 2026, up 4.1% year on year, with the group saying its ‘Optimise’ strategy is beginning to deliver.
Like-for-like sales rose 4.8% across the group, with Autocentres up 5.8% and Retail up 4.1%. Gross margin hit 52.8%, its highest level in a decade, expanding by 210 basis points despite cost inflation eating into the gains.
“Halfords is finding growth in keeping Britons’ ageing cars on the road. The business topped consensus profit expectations as its garages emerged as the key growth driver,” explained Duncan Ferris, Investment Writer at Freetrade.
In addition to top-line growth, Halfords secured efficiencies in the Autocentres division, resulting in a 50 bps improvement in operating margin.
Stripping out a change in accounting treatment for acquired intangibles, the group underlying growth was over 8%.
Adam Vettese, market analyst for eToro, said: “Halfords shares jumped sharply on the open after the motoring and cycling retailer delivered a stronger than expected set of full-year results. Like-for-like sales rose 4.8%, with solid contributions from both the retail and the higher margin Autocentres business. Gross margins expanded 210 basis points to 52.9%, which is the highest level in a decade, while underlying profit before tax comfortably beat April consensus forecasts.
“The group also strengthened its balance sheet, moving further into net cash, and proposed a 9p total dividend. Management highlighted progress under its “Optimise” strategy, with particular momentum in services and cycling.
“The market is clearly rewarding the combination of top-line growth, margin recovery and cash generation at a time when many consumer facing retailers continue to struggle.”
Trading since the year-end has been strong, with April, May and June described as encouraging, and the group is now guiding FY27 underlying profit towards the top end of the upgraded consensus range of £45.7 million to £52.3 million, with performance expected to be first-half weighted.
The confident outlook may be playing a part in the 14% rise in Halfords shares on Thursday.
The one note of caution is the Middle East conflict, which Halfords says hasn’t affected customer behaviour yet, but could weigh on consumer sentiment in the second half of 2026 if conditions deteriorate. However, this seems to be a default warning from all companies at the moment.