Halfords shares punctured after strong run despite half-year growth
(Alliance News) - Halfords Group PLC's share price fell sharply on Wednesday despite backing recently raised profit guidance amid ongoing sales growth.
In a trading update, the Redditch, England-based motoring and cycling products retailer said like-for-like sales grew 7.1% in the 26 weeks ending October 2 from a year before, supporting the full-year profit upgrade it made in August. The sales growth was ahead of Visible Alpha consensus of 6.5%, cited by RBC Capital Markets.
Despite this, shares in Halfords dropped 8.1% to 255.50 pence each in London on Wednesday morning, hitting an intraday low of 250.50p. They remain up 87% in the last 12 months.
"While this is a reassuring update rather than a further upgrade, it does support confidence in earnings recovery, albeit with some of the first-half strength weather-assisted," Shore Capital analyst David Hughes commented.
Retail LFL sales grew 7.7%, with Motoring LFL sales up 7.3%, and Cycling LFL sales up 8.3%. Autocentres LFL sales grew 6.1%.
As set out in August, Halfords said the strong first-half performance was underpinned by momentum across the business, alongside strong demand for seasonal categories through the unusually hot summer months in the UK.
Halfords continues to expect FY27 underlying profit before tax of between GBP55 million and GBP65 million. At the mid-point, this would be up 32% from from GBP45.4 million reported in the 53 weeks ended April 3.
Halfords said profit will be weighted towards the first half, reflecting the strong trading.
Chief Executive Henry Birch, commented: "The business continued to perform positively through the first half as we benefited from good execution against our strategic priorities and strong sales of seasonal categories through the warm summer weather. We move into the second half with confidence and look forward to sharing more detail on our progress at our interim results announcement later next month."
Interim results are scheduled for November 26.
By Jeremy Cutler, Alliance News reporter
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