Halfords sees profits halve as consumers cut back on spending

Retailer Halfords has seen interim profits halve and warned the full-year result will be at the bottom end of its expectations as underpressure consumers cut back on non-essential spending.

The car parts to bicycle chain reported underlying pre-tax profits of £29 million for the six months to September 30, down from £57.9m a year ago, with the previous year’s results boosted by £9.2m of business rates relief.

Revenues rose 10.2% to £765.7m over the first half but retail like-for-like sales were 6% lower yearon-year as it saw consumers rein in spending on bikes, where sales plunged 12.5% as it came up against strong trading the previous year.

Halfords said it was seeing “resilient trading in the more needs-based categories, but there has been a softening in the more discretionary areas”.

“It remains challenging to predict consumer confidence for the remainder of 2022-23 but we don’t expect the challenges that businesses are facing to dissipate soon,” it added.

The group cautioned it is now expecting full-year underlying pre-tax profits at the lower end of its previous guidance for between £65m to £75m, sending shares down more than 6%.