Halfords Q3 results show strength but winter lockdown may weigh in

Halfords has announced a positive Q3 trading update for the 13 weeks to 1 January 2021, but forecasts that the current lockdown is highly unlikely to mirror the spring much thanks to seasonality and low supply.

The report shows a like-for-like group sales growth of 11.7%, comprising Retail (LFL 9.8%) and Autocentres (LFL 21.1%). Additionally, the report shows that Autocentres sales are up 30.5%, reflecting a significant increase in market share, driven by the company’s in-class digital operating model.

In terms of retail, Halfords has seen a cycling LFL growth of 35.4% which has been driven by the covid-19 induced bike boom, despite global container shortages and port congestion issues.

Additionally, Halfords’ performance cycling business, Tredz, continued to see high levels of demand throughout Q3, growing 51.2% LFL. The report shows that overall, LFL rates were lower than quarter averages as increased lockdowns weakened demand and supply chain disruption.

In November last year, Halfords also highlighted its intention to reshape its property portfolio in a bid to enable the group to deliver a more integrated and flexible customer and services proposition. Since then, Halfords has closed 33 sites, including 22 Cycle Republic Stores, and will be closing a further 47 financially low returning stores before the end of the financial year.

Graham Stapleton, Chief Executive Officer, said: “We are pleased to have delivered a strong performance under hugely challenging circumstances, including our best ever Christmas week. Despite a large reduction in traffic on the roads, our strategically important Autocentres business saw significant growth, with particularly strong demand for the services of our growing fleet of Halfords Mobile Expert vans.

“We are currently carrying out over half a million services and repair jobs on cars and bikes each month, and therefore continue to play an essential role in keeping the UK moving during this pandemic. Throughout the crisis we are privileged to have been able to offer free checks and discounts to 239,000 NHS workers, teachers and Armed Forces staff to help them keep their vehicles safe and roadworthy.”

“The health and safety of our colleagues and customers remains our number one priority and I would like to offer my sincere thanks for their unwavering loyalty and support.”

In November 2020, Halfords released an interim statement showing a dramatic rise in profits as the company’s cycling division developed a 54.4% growth.