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Retail

Halfords leans on autocentres as cycle sales falter

Halfords has dropped prices across 2,000 essential motoring products.

Halfords Group PLC (LSE:HFD) saw underlying revenues retreat in the 20 weeks to 19 August, although it kept its full-year profit guidance unchanged.

The motoring services and cycling retailer said sales were down 1.9% compared to the same period last year, even though the autocentre business saw revenue grow 19.4% like-for-like.

"Strategic acquisitions in autocentres are the key driver of total sales growth," including the purchase of National Tyres, Universal and Tyres on the Drive, said the statement.

"Over 70% of our sales now come from motoring products and services, and the fact that this area of spend tends to be more needs-based rather than discretionary is leading to a very resilient group performance, despite the wider macroeconomic uncertainty," said chief executive Graham Stapleton.

The group is also taking steps to help ease the cost-of-living crisis for customers, with Stapleton adding that it dropped prices across 2,000 essential motoring products.

Performance in the period has been in line with its expectations, the company said, and full-year underlying profit before tax forecasts of £65mln to £75mln remain unchanged as a result.

Revenue in Halfords' retail business, however, was down 7.1% compared to last year, although the group says this is in line with expectations.

In terms of outlook, the London-listed company said progress is being made against its cost-saving and inflation mitigation targets, and there is a good level of stock availability.

Second-half profits should exceed the first said the statement due to the seasonal weighting of its autocentres arm.

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