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Boost to cycling sales sees Halfords upgrade profit expectation

UK's biggest cycle retailer celebrates strong end to 2024, with sales growth of 13 per cent led by cycling...

Stronger than expected sales in cycling led Halfords' strong final quarter of 2024, the retailer has announced, upgrading its profit expectations for 2025 as a result.

Halfords' share price has jumped 19 per cent this morning in reaction to the news and it will give some hope to the bike industry that has faced such challenging times in recent years.

halfords-store-front

Communicating the news via an RNS Announcement, Halfords Group plc this morning noted that its recent trading had been strong, like-for-like retail sales growth of 13.1 per cent in December led by Christmas gifting of bikes and promotional deals that "resonated well with customers, notably in cycling".

> "The premium sector is the fastest-growing part of the cycling market": Halfords to double the amount of bikes in its range priced over £1,000

"In recent months we have seen an improvement in trading alongside continued progress on a number of key initiatives, including our pricing and promotion strategies and cost reduction measures," Halfords stated. "Cumulatively, these factors lead us to expect FY25 underlying profit before tax of £32m to £37m."

Despite the positivity, Halfords took the opportunity to raise concerns with the most recent Budget, arguing it meant "considerable uncertainty".

"Despite the recent positive performance, there remains considerable uncertainty regarding the outlook for the UK consumer in light of measures introduced by the Autumn Budget, which take effect from April and hence are in force for the entirety of FY26," Halfords' statement continued. 

"While the impact of changes to the minimum wage and national insurance contributions are relatively easy to quantify, adding c.£23m to our direct labour costs in FY26 alone as announced in November, their effects on the demand environment and health of the broader economy are harder to predict.

halfords social distancing - june 2020

"We also continue to expect to see inflation passed through on managed services. We continue to work on possible mitigations for the additional costs we face and will share our plans alongside our FY25 results."

The bigger picture at Britain's biggest cycling retailer will be revealed in more detail when Halfords publishes its trading statement in April, but the news of cycling sales improving at the back end of 2024 is cause for cautious optimism given the challenging times the bike industry has suffered since the pandemic.

As recently as June, Halfords warned that the cycling market is "significantly worse than expected" and there would be likely more pain to come into 2025, fears that may be eased by today's update.

Publishing its preliminary financial results for the year to March 2024, Halfords last summer said it had seen its profits slashed amid "significantly worse than expected" cycling performance and bike sales dropping to 30 per cent below pre-Covid levels.

In October, the retailer revealed its new premium bike range had been a hit but that the cycling market remained challenging, a picture not helped by the "UK's wettest spring since 1986".

Dan is the road.cc news editor and joined in 2020 having previously written about nearly every other sport under the sun for the Express, and the weird and wonderful world of non-league football for The Non-League Paper. Dan has been at road.cc for four years and mainly writes news and tech articles as well as the occasional feature. He has hopefully kept you entertained on the live blog too.

Never fast enough to take things on the bike too seriously, when he's not working you'll find him exploring the south of England by two wheels at a leisurely weekend pace, or enjoying his favourite Scottish roads when visiting family. Sometimes he'll even load up the bags and ride up the whole way, he's a bit strange like that.

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3 comments

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Secret_squirrel | 2 weeks ago
2 likes

Good for them and cycling in general.

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Steve K replied to Secret_squirrel | 2 weeks ago
2 likes

Secret_squirrel wrote:

Good for them and cycling in general.

A rise in Halfords bike sales suggests to me more people getting into cycling, because anyone who already cycles would be buying a bike from somewhere else 

(I say that in jest, but it's actually my personal experience - I bought my first bike as an adult in 1998 from Halfords.  I've not bought a bike there since, but that was the bike that started me on my journey to cycling obsessive!)

Avatar
bensynnock replied to Steve K | 2 weeks ago
0 likes

I think to a lot of new cyclists Halfords seems a safe choice, as it's a brand they are familiar with and they know they can take it to be repaired if they have problems.

We all know the wisdom of this opinion, but for most people it probably does work out okay.

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