Halfords Group PLC (LSE:HFD) shares rose after the car parts and cycling retailer reported a small fall in sales in the first half of its financial year but better profit margins.
The FTSE 250-listed group maintained full-year guidance as it pointed out that the 0.1% decline in like-for-like sales for the half-year to 27 September was in comparison to a strong prior year when sales grew 8.3%.
Chief executive Graham Stapleton said two of the group's core markets remained "significantly below pre-Covid levels", with consumer caution in discretionary spending "compounded by uncertainty around the contents of the upcoming Autumn Budget".
But he said the company's focus on providing services and aiming at B2B customers was supporting growth, while gross margins expanded thanks to "price optimisation" and gains from better buying as currency headwinds abated, while Stapleton's target to make £30 million of savings to mitigate around £35 million of expected inflation was "on track".
"Despite pockets of improving consumer sentiment, the short-term outlook remains uncertain, particularly for big ticket, discretionary purchases," the company said.
For the second half, the company bemoaned wage inflation and the variability of consumer demand, but said it is "prioritising investment where we have high confidence in strong near-term returns".
The shares rose 2.2% to 145.24p, but remain down 24% since the start of the year.