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Halfords third-quarter revenue rises, hails record Christmas and Black Friday sales
Halfords reported a rise in third-quarter sales on Thursday and solid trading over the Christmas period.
In the 15 weeks to 12 January, total group revenue was up 3.2%, with retail sales 3.3% higher and Autocentres sales up 1.9%. On a like-for-like basis, group revenue rose 2.7%, with retail revenue up 2.9% and revenue from Autocentres up 0.7%.
Service-related retail sales were especially strong, up 8.6%, driven by the fitting of bulbs, blades, batteries and dash cams, new motoring services and cycle repair.
Meanwhile, group online sales growth was 13%, with more than 80% of Halfords.com orders collected in store, which the company said reinforces "the advice and service-led nature" of transactions.
In the 41 weeks to 12 January, total revenue was up 3.6%, and 1.9% on a LFL basis.
The company said it expects the UK retail sales environment to remain subdued for the rest of FY18. Halfords said sales for the quarter were slightly ahead of expectations, with growth led by the lower margin cycling business.
It added that its FX mitigation plans are on track and it expects FY18 pre-tax profit to be broadly in line with current market expectations.
Chief financial officer Jonny Mason said: "We are pleased with the overall performance of the Group in the 15 week period given the difficult UK retail environment. We achieved record sales for Black Friday and Christmas thanks to great planning and execution and compelling product and service offers. Particular highlights included the growth in fitting services for car parts, cycle repair and increased sales of bikes, electric bikes and dash cams."
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "We like the strategy Halfords adopted under former CEO Jill McDonald. She recognised that to compete with the online giants, bricks & mortar retailers need to offer something a website can't - personal service. Upskilling the Halfords workforce, and improving incentives so staff don't walk out the door with their new found expertise, means Halfords can offer advice and services on site. Customers are prepared to a pay a little bit more for that.
"The group has improved its own online offer, and growth here is good, but the fact that over 80% of online orders are still picked up in store is evidence that it's Halfords real world presence that differentiates it from rivals. Having only started on Monday we hope the new man, Graham Stapleton, sticks to the plan."
At 1050 GMT, the shares were down 0.8% to 349p.