Halfords backs FY expectations after 'strong' H1

(Sharecast News) - Halfords said on Thursday that it was on track to deliver FY26 expectations following a "strong" first half, as it pointed to a solid performance from cycling. In the 26 weeks to 26 September, underlying pre-tax profit ticked up 1% to £21.2m, on revenue of £893.3m, up 3.3% on the same period a year earlier.

Halfords said the higher profit was delivered despite significant inflation in the period, including increases in the National Living Wage and changes to National Insurance rates and thresholds in last year's Budget.

Group sales rose 4.1% on a like-for-like basis, with a "strong" performance in cycling - which saw LFL sales jump 9% - and growth in both segments, with retail LFL sales up 4% and Autocentres 4.3% higher.

Halfords said it remains confident in delivering FY26 underlying pre-tax profit in-line with consensus expectations of between £36m and £40.7m.

It also still expects capital expenditure for the full year to be within the guided range of £60m to £70m.

Chief executive Henry Birch said: "I am very pleased to be announcing a strong set of HY26 results that show good financial, strategic and operational progress. Cycling was the stand-out performer, with LFL sales up 9%. Our consumer garages also performed particularly well, up around 8%, driven in part by the ongoing roll-out of our new format Fusion garages.

"Looking ahead, there are significant opportunities for us to create further value through improvements in our technology and data capability, which are key areas of focus for us as we plan for the future.

"While the operating environment remains unpredictable, our combination of needs-based products and services, as well as market leading positions in both motoring and cycling, give us the confidence that we will continue to grow our business in line with our plans."

The company also announced the appointment of Sarah Haywood, former global CIO of Carlsberg, as chief information officer with effect from November.

In addition, it said that after nine years as chair, Keith Williams plans to step down by the company's next annual general meeting in September 2026.

At 0950 GMT, the shares were down 3.6% at 138.40p.

Russ Mould, investment director at AJ Bell, said: "Much attention around Halfords has focused on its auto services, parts and accessories operations rather than the cycling business.

"However, the company's first-half results are pedal powered with an eye-catching 9% increase in like-for-like sales. Investors have been here before and may not be getting carried away as cycling performance tends to fluctuate significantly.

"While cycling sales may be flying like Laura Kenny in the velodrome, supported by warm weather over the summer and autumn, they could just as easily resemble an amateur with a slow puncture next time around. That's potentially why the market is focusing instead on the more sluggish showing on the motoring side, which has increasingly become Halfords' bread and butter.

"The company is looking to lean on an improvement in its digital platforms as it looks to navigate a difficult road ahead amid continuing pressures on consumer spending. At least by pursuing these improvements and keeping a lid on costs, Halfords is managing the elements it can control."