Halfords Group PLC (LSE:HFD) shares have slipped 5% in early trading as it revealed a drop in earnings.
On Thursday, the car parts and cycle retailer revealed its full-year sales ticked close to 8% higher reaching £1.70 billion, but its profit slipped due to weakness in some of its markets.
The group’s underlying profit before tax stood at £36.1 million, down 8%, as it faced external headwinds affecting the consumer tyres and cycling markets.
Its strategically important Services business has now become the largest revenue segment, accounting for over half of the business's total revenue.
Halfords reported achieving market share gains in all four of its core markets. The gross margin saw a slight decline to 48.5%, down 40 basis points from the previous year.
Cost efficiency was a major highlight, with the Group delivering cost savings of over £35 million, exceeding its original target of £30 million. This brings the total cumulative savings to approximately £70 million over the last three years.
CEO Graham Stapleton said: "This has been a year of strong strategic and operational progress for Halfords, and we are pleased to have delivered a resilient financial performance against challenging core markets.
"We have continued to invest in our strategically important Services business, which for the first time now represents over half of our total revenues."
As of the end of the fiscal year, Halfords managed to reduce its retail inventory by £24 million, maintaining a strong balance sheet with net debt, excluding leases, at £8.2 million.