Cold put spoke in bicycle sales at Halfords

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FREEZING weather sent bicycle sales tumbling at Halfords but boosted sales of de-icer and screenwash, allowing the retailer to maintain positive momentum for the year.

The car parts and leisure firm, which trades from 460 stores in the UK and Ireland including around 25 in Yorkshire, posted like-for-like sales growth of 0.4 per cent in the 11 weeks to the end of March, helping underlying sales for its full year to the end of March increase by 0.3 per cent.

A delayed start to the season drove bike sales down 8.8 per cent during the 11 weeks, leading to an overall decline of 0.6 per cent for the full year. Growth in premium bike brands, such as Carrera and its range from Olympic cyclist Chris Boardman, plus a 26.5 per cent surge in online parts, accessory and clothing sales, were not enough to offset the weather effect.

But car maintenance sales increased 10.4 per cent during its final quarter – boosted by strong demand for wiper blade fitting and de-icing products. That helped underlying maintenance sales grow 5.1 per cent for the year.

Chief executive Matt Davies, the former Pets at Home boss who joined the group in October, said: “We can genuinely claim to have helped keep the country moving during the big freeze.”

Halfords sold 2.3 million litres of screenwash during the quarter, 56 per cent more than a year earlier, while ice scraper sales were up 80 per cent to 138,000 units.

Mr Davies said: “This was a robust performance demonstrating how the balance of our business can offset some variations in the weather.

“Car maintenance sales were strong as we helped motorists cope with the freezing conditions and this endorses our strategy of investment in our unique ‘wefit’ offer. Cycling and travel solutions were impacted in the period but we have a strong offer ready for the spring and summer periods.”

Halfords, which is due to update on its strategy next month, still expects to deliver pre-tax profits of £68m to £72m for the year.

Strong demand for outdoor products such as snow chains and shovels was not enough to prevent sales in its travel solutions arm – which also sells car seats and roof racks – falling 5.5 per cent for the quarter.

Its overall retail arm increased underlying sales 0.3 per cent during the quarter, while sales in its Autocentres division were 0.8 per cent ahead.

Halfords has plans for a big expansion in the fragmented car repair market, and opened 23 new Autocentres to take its total to 283.

It plans to open about 20-30 more during its new financial year, offering services including MOTs, tyre fitting and clutch repairs. Autocentres currently comprise about 14 per cent of group revenues.

Mr Davies said: “Any idiot can open large numbers of sites. We want to remain incredibly focused on quality sites that will be there to generate cash for the business for many years to come. There’s this balance we are always looking to achieve between numbers and quality.”

Analysts from Investec said that the update represented “further steady progress”, while analysts from Barclays said that the third consecutive like-for-likes “support our argument that Halfords is not a structurally broken story”.

They said that the figures should “serve to reassure sceptics that Halfords can indeed see like-for-like sales growth if the service offering is right, a point of focus for the new CEO”.

Mr Davies said: “We are focused on significantly improving the service we offer customers and this emphasis will be central to our future investments. I look forward to outlining our plans to secure sustainable revenue growth through our three-pillared strategy at our preliminary results on May 23.”

Analysts from Oriel Securities said: “Our view remains that Halfords will now begin to show strong sales and profit growth. Yes, there will be material investment into both service and the stores themselves but this is overdue and will have a positive effect on the bottom line.”