Halfords Q3 results saw group revenue down 1.7% like-for-like, with retail cycling sales slightly down (-0.3% like-for-like, on a strong comparative of 8%).
Growth in cycle accessories and children’s cycling was offset by a decline in the more discretionary and ‘bigger-ticket’ adult bikes, the group said.
A glum outlook from the firm saw it note ‘weak consumer confidence’ that would likely stretch into the next financial year: “[We] therefore anticipate FY20 profit before tax to be broadly flat on the revised FY19 expectation. Evidently, however, we are in an uncertain environment and will provide an update alongside our preliminary results in May.”
The markets have reacted badly to the news, with shares down over 20% to a six year low.
Online takes share
Group online sales were up 7.5% to 20% of total sales. 80% of Halfords.com orders were collected in-store.
CEO Graham Stapleton commented: “This has been a challenging third quarter for the business, driven by exceptionally mild weather and ongoing weak consumer confidence. Together, these factors have led us to reduce our profit expectations. Whilst this has been a difficult period, we have managed costs and margin well and our free cash flow remains strong. Halfords is a robust business and we firmly believe that the strategy we outlined in September is the right direction for the business.”
Despite the weakened pound hitting profits in its current financial year, Halfords has been active in 2018, linked with the ailing Evans Cycles (which was eventually bought by Mike Ashley’s Sports Direct) and beginning a long-term partnership with Brompton. Days ago, Halfords announced its customers would get access to the “world’s first” Amazon Alexa smart bike.