Halfords/Peloton: four wheels bad, two wheels good
Talk about freewheeling. Shares in Halfords, Britain’s biggest bicycle chain, jumped nearly 24% after the Government talked up cycling as the ideal safe means of transport for those returning to work after the lockdown, said Michelle McGagh on Citywire. Amid reports of a bike famine, the “imminent legalisation of e-scooters” on public roads is an equal boon – Halfords leads the pack in that category too. Analysts are cock-a-hoop about the company’s prospects. “We have generally been loath to forecast V-shaped post-Covid-19 recoveries, but this might be different,” said Jonathan Pritchard of Peel Hunt. “Our new numbers reflect a very strong bounce back in sales and earnings, led by cycling, with motoring lagging.”
It seems there’s plenty of mileage in cycling globally – even of the stationary sort, said Jenni Avins on Quartz. Peloton, the US fitness firm, reports it can’t keep up with orders for its pricey £1,990 bikes as the virus forces people indoors. Revenues last quarter, at $524.6m, were 66% higher than a year ago, and that number might have been higher if Peloton could “make bikes as fast as people are panic-buying them”. The company has bought a Taiwanese manufacturer to tackle its order backlog and ride what CEO John Foley calls “a meaningful tailwind”.
Judging by the roaring uptake of Peloton’s fitness app (one million downloads in the past six weeks), “those who do get bikes seem to be actually using them”, said Avins. Directors, doubtless hoping the habit sticks post-lockdown, must be marvelling at the turnaround in their fortunes. Last November, the newly listed company was “roasted” on social media when a controversial ad – featuring a man giving his “wife” the “gift of a Peloton” – was slammed as “dystopian and sexist”. Shares dipped 15%. Now, they are among the “top-performing stocks of the pandemic”.