Halfords share ride high after strong trading leads to profit guidance increase

Halfords Group has upgraded its profit expectations for FY25, now projecting underlying profit before tax of £32m to £37m, following improved trading performance and strategic progress in recent months.

Halfords shares were 20% higher at the time of writing.

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The retailer saw positive like-for-like sales growth in Q3 across both its Retail and Autocentres divisions. The company’s cycling segment performed particularly well, achieving 13.1% like-for-like sales growth in December, driven by strong Christmas sales.

Meanwhile, its Autocentres division showed robust performance in services and maintenance, with consumer garage sales growing by 10.3% in Q3.

Recent colder weather has further boosted performance, with motoring products seeing a 5.5% like-for-like sales increase in January. The company also reported better-than-expected foreign exchange rates for the cost of goods sold in FY25 and lower freight costs than previously anticipated.

Looking ahead to FY26, Halfords, like many retailers, faces an estimated £23m increase in direct labour costs due to minimum wage and national insurance changes announced in the Autumn Budget. The company is developing mitigation strategies to address these challenges, which will be detailed alongside its FY25 results due later this year.

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