Halfords' share price was pumped up this morning by a healthy rise in group revenues and news that the Olympics has helped the group offset slower cycling growth from previous quarters.
Halfords' group revenue rose 4.8 per cent in the 20 weeks to 19 August, with retail revenue rising 4.8 per cent and its autocentres arm growing by 4.6 per cent.
However, in the seven weeks to 19 August, since its first quarter results were released, total group revenue increased by 9.3 per cent.
The company said in a trading update today that it enjoyed its biggest ever summer week of sales in late July for retail and repaired a bike puncture once every minute that its stores were open.
Total cycling sales were up by 11 per cent, boosted by bike ranges from Olympians Bradley Wiggins and Laura Trott, which were both launched in July and were "proving popular" with customers.
Premium bike sales were also up across the year to date.
Halfords' share price was up 2.55 per cent in morning trading to 381.5p.
Why it's interesting
As well as the boost from the Olympics, Halfords said its cycling sales had also been boosted by more Cycle Republic store openings and the addition of Tredz, which has continued to "perform well" since it was acquired in May.
Sales surged and interest in mass participation cycling events boomed as a result of the 2012 Olympics (dubbed by some the “Wiggo effect” after cycling superstar Bradley Wiggins), but turnover has dipped for retailers in the last couple of years.
In July, the bicycle and car parts retailer announced a four per cent revenue reduction in its cycling sales, against a 1.2 per cent decline in its retail division as a whole.
Despite the boost in summer sales, the group said its guidance for the year remains unchanged.
What Halfords said
Chief executive Jill McDonald said:
Good growth in cycling sales during the peak summer period was supported by new ranges, strong promotional activity, good weather and the success of Halfords' Olympic cycling heroes.
We continue to make good progress on our strategic initiatives; we can now match 25 per cent of our retail sales to specific customers compared to only three per cent last year and in recent weeks we have successfully piloted contactless payments and also launched the new Cycle Republic website.
What others said
"It's been a gold medal summer for Halfords, although compared with 2012 the group has been low key about the importance of a strong Olympics to its business. But whatever the cause, cycling sales have improved markedly, while autocentres continue to deliver steady growth," said Nicholas Hyett, equity analyst at Hargreaves Lansdown.
"Halfords has strong positions in the growing cycling and motoring markets, though unfortunately it hasn't got a sales record to justify lofty expectations. However, today’s results are certainly a step in the right direction."