Shareholders may be tempted to look away when Halfords Group PLC (LSE:HFD) reports its next quarterly results next week.
That may be the case after Halfords issued a profit warning in November that hit its share price within the first hour of trading.
The sports and DIY retailer, which will publish its results for the third quarter of fiscal 2024 on 25 January, suffered an 18% knock to its share price in early trades in a single day in November, after it tightened its profit guidance.
The bike and car parts retailer shaved the top end of its profit forecast by about £5 million amid a tough economic backdrop that included a fall in discretionary spending.
It said at the time that it expected annual profits to be between £48 million and £53 million for the year, Proactive reported.
Analysts were not convinced and Liberum downgraded the stock from a hold to a sell.
The broker suggested that the company’s results in the first half of 2024 had masked a decline in pre-tax profit, which they said would have shrunk by 25% year on year without a restatement of prior-year results.
Halfords posted a 15.8% underlying pre-tax profit increase in the first half, to £21.3 million, up from £18.4 million a year earlier.
However, Liberum analysts Adam Tomlinson and Wayne Brown wrote on 29 November that “if there was no prior year adjustment”, factoring in store and autocentre closures and restructuring costs, then pre-tax profit would have declined from £29 million.
They also expressed concerns around whether the company could deliver on its profit expectations for the year.