Halfords shares tank as weak consumer backdrop leads to profit warning

(Sharecast News) - Shares in auto and bike parts retailer Halfords plummeted on Wednesday after the company delivered a surprise profit warning with just one month to go before the end of its financial year and said there would be no profit growth next year. Underlying pre-tax profit is now expected to fall in the range of £35-40m for the year ending 29 March, under previous guidance of £48-53m, as a result of a "further material weakening" in three of its four core markets - namely Cycling, Retail Motoring and Consumer Tyres.

The stock was down more than 20% at 153.52p by 0837 GMT.

Cycling and Retail Motoring have been hit by weak customer confidence and unusually mild and very wet weather, which hit footfall and sales of categories such as winter and car cleaning products.

The Cycling market has also become more challenging and competitive, with increased promotional activity and more customers buying on credit, which has dented margins.

The remaining Autocentres business has been resilient despite a tough environment for Consumer Tyres, while its Service, Maintenace and Repair business continues to see "good customer demand".

Looking ahead to next financial year, Halfords said it remains "cautious on market recovery in the short-term, and the current significant volatility in market conditions means that forecasting accurately is challenging". Underlying pre-tax profit for. the year to March 2025 will be broadly in line with the current year's forecast, it said.