Halfords share price dips on reduced revenue during first quarter

Caitlin Morrison
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An increase in mudguard sales still couldn't push Halfords' revenue into positive territory (Source: Getty)

Despite a soggy start to the summer pushing sales of mud guards for bikes up 15 per cent, Halfords has reported a 0.6 per cent drop in like-for-like revenue in the 13 weeks to 1 July - and warned that a weaker pound could hit profits.

Shares in the company dipped by one per cent in early trading.

The bicycle and car parts retailer reported a 1.2 per cent sales decline in its retail division, with car maintenance revenue up 2.3 per cent but car enhancement down 4.2 per cent. The cycling arm recorded a four per cent revenue reduction.

The group's autocentres business saw a 3.1 per cent increase in revenue.

Last month the company said it was preparing for a £3m impact on profit for the 2017 financial year based on a USD/GBP rate of 1.45. Sterling was hit hard when Britain voted to exit the EU at the end of June.

"We now have over 75 per cent of our FY17 purchases hedged at around 1.45. If the USD:GBP rate continues to be weaker than 1.45 it may have a small further impact later in this financial year, depending on the extent to which it can be mitigated," Halfords said.

The firm's chief executive, Jill McDonald, hailed a "solid performance" in the motoring business, which accounted for around 70 per cent of group sales.

"In autocentres our sales continued to grow through improvements in the customer offer," she added.

"We had good sales growth of premium bikes but cycling sales across the quarter were impacted by both the timing of Easter and poor weather, particularly in April. We look forward to the peak summer cycling season.

"While the recent decision to leave the EU does create uncertainty, we are well-positioned as a business and focused on delivering sustainable long-term growth.”

McDonald said tie-ups with star cyclists such as Laura Trott and Sir Bradley Wiggins would help drive sales.

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