Halfords Christmas sales slump as customers hit the brakes

(Sharecast News) - UK car parts and bike retailer Halfords on Thursday reported weaker-than-expected third-quarter sales, driven by a poor Christmas as customers reined in discretionary spending amid the cost-of-living crisis. December like-for-like (LFL) sales slumped more than 15%, although the start of the fourth quarter returned to growth, the company said in a trading update.

"Whilst October and November sales were strong, sales in December were much weaker, driven by a combination of mild and wet weather impacting demand for winter products and footfall into stores, and customers balancing difficult spending decisions in the lead up to Christmas," the company said.

Its retail motoring division saw average LFL growth of 10.2% in October and November before the December decline.

"In January, we have seen sales growth in Retail Motoring return to the levels seen in October and November as conditions normalised," Halfords said.

Group revenue rose 2% on a like-for-like basis in the three months to December, with stronger sales in motoring and needs-based categories partly offset by weaker spend in discretionary areas.

The full-year profit forecast was maintained as it implemented more cost-saving measures and saw continued momentum in its motoring services unit.

Halfords expects its adjusted pre-tax profit for calendar 2023 of £48m - £53m.

"Whilst Q3 sales were below expectations, a strong start to Q4 trading, further cost action and resilient areas such as B2B performing well, mean that we are confident in the Q4 outlook," the company said.

Reporting by Frank Prenesti for Sharecast.com