Halfords has announced that it now expects its full year PBT to be in the range of £35-40m, down from the £48m and £53m it previously expected.
This comes as a result of three of the company’s four core markets weakening resulting in a significant drop in like-for-like revenue growth.
Both the cycling and retail motoring markets have been impacted by a combination of continued weak customer confidence and unusually mild and very wet weather,
This affected footfall into stores and sales of categories such as winter and car cleaning products.
Volume in the retail motoring market fell year-on-year by 5.1% pts in January compared with an increase year-on -year of 0.2% in Q3.
Volume in the cycling market fell year-on-year by 8.0% pts in January compared with a decline of 5.1% pts in Q3.
Furthermore, the company stated that the cycling market has become “more challenging and competitive” as it continues to consolidate.
Promotional participation has increased, and more customers are purchasing on credit, leading to weaker gross margins than previously anticipated.
Looking ahead to FY25, Halfords remains cautious on market recovery in the short-term as the current significant volatility in market conditions means that forecasting accurately is challenging.
Despite this the company anticipates that its underlying PBT in FY25 will be broadly in line with that forecast in FY24.
To achieve this there must be marginal year-on-year growth in its core markets and the cycling market must normalise.
Alongside this, the retailer’s FY25 PBT will be supported by cost savings that are more than offset by net inflationary headwinds.
