Cycling remains challenging for Halfords H1 2024 as firm notes “wettest spring since ’86”

Despite some highlights delivered by its Tredz business, Halfords H1 2024 results noted continued challenges remaining in the cycle retail market.

Noting the UK’s wettest spring since 1986, retail momentum grew through H1 to deliver like-for-like sales of -0.7%. Retail makes up circa 60% of the Halfords business, across motoring and cycling. However the firm doesn’t specify the contribution cycling made to that flat performance, beyond notes that motoring products “proved more resilient than expected”.

Halfords said its new premium bike ranges was positively received, and that Performance Cycling continued to outperform like-for-likes in Tredz.

Group like-for-like sales were -0.1% vs strong prior year comparatives (+8.3% in H1 in FY2024 – delivered in part by the Autocentres business).

Cycling industry eyes might be drawn into Halford’s note that “high levels of technician wage inflation persisted” – in the autocentre division of the Halfords business (which contributes circa 40% of group revenue). Workshop and industry wages has become a pertinent topic – as has inflation, more broadly – and this note indicates that technician wages in automotive have been increasing.

Reflecting that “survive to 2025” philosophy, Halfords H1 2024 financials said the short-term outlook remained uncertain, particularly for big ticket, discretionary purchases, so its FY25 outlook is unchanged.

Halfords CEO Graham Stapleton referenced uncertainty around the Budget, which will be delivered next week. He said: “While consumers remain cautious in their discretionary spending compounded by uncertainty around the contents of the upcoming Autumn Budget, we have continued to focus on controlling the controllables and I am pleased with our performance in the first half of FY25.

“Our services and B2B-led strategy has supported Halfords’ growth despite two of our core markets remaining significantly below pre-Covid levels, enabling us to absorb more than £130m of inflation since FY20 while maintaining a strong balance sheet. In this environment we are focused on optimising the existing platform to drive near-term returns, while accelerating our investment in the Fusion concept to position us for growth in the coming years.”