Halford cautious over retail spending as profits tumble by 23%
RETAILER Halfords has become the latest to warn over consumer confidence as it revealed half-year profits dropped by nearly a fifth.
The car parts-to-bicycles chain said shoppers were holding back on spending on discretionary items, which was hurting bike sales in particular.
A number of retailers have been cautioning over the consumer outlook as Brexit worries take their toll.
Halfords reported a 23 per cent fall in half-year pre-tax profits to £28.2 million and said it expected the “short-term conditions for discretionary spend to remain challenging”.
On an underlying basis, pre-tax profits dropped 17.1 per cent to £30.5 million in the six months to September 28.
The chain said it still continued to expect full-year profits to remain “broadly” flat as it predicted a pickup in earnings over the final six months.
But it stressed this was dependent on trading over Christmas and assuming average winter weather.
Graham Stapleton, recently appointed chief executive of Halfords, said: “Despite the challenging UK consumer environment, we delivered a robust sales and cashflow performance in the first half, with costs and profit broadly in line with our expectations.”
The half-year results showed likefor-like retail sales rose 2.3 per cent, while its autocentres chain saw growth of 3.3 per cent.
Bike sales rose one per cent in the half-year as the summer heatwave offset a difficult start to the year.
But Halfords said: “We expect the short-term conditions to remain challenging.”