Shares in automotive retailer Halfords (LON:HFD) are down nearly 8 percent this morning after releasing a trading statement showing slower than expected sales.
The slowdown was led by sales of cycling equipment, which were down 11 percent. The company cited greater levels of discounting as well as poor weather deterring casual cyclists for this drop, and are planning “a complete refresh of children’s bikes and accessories alongside a series of compelling offers for customers” to stoke up growth in the long term.
However, management anticipates Retail gross margin to be at the better end of the previous full year guidance range – between -25 to -75 basis points year-on-year decline – and full year Group profit before tax to be broadly in line with prevailing market consensus.
Jill McDonald, Chief Executive, commented:
“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.”
“Looking ahead, we remain confident in the long term growth opportunities in Cycling and I will talk more about our plans for Cycling and across the broader Group at our interim results in November.”
