Halfords slashes profit forecasts as wet weather hits sales
More people buying on credit and reduced sales across tyres, cycling and car items have also hit Halfords bottom line, it said in a trading update.
Wednesday 28 February 2024 09:35, UK
Halfords has significantly revised down profit forecasts after wet weather and discounts affected sales.
It's the latest sign of the negative impact of rain and unseasonably high temperatures on the retail sector, the biggest area where money is spent in the UK economy.
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The weather affected the number of people coming into shops - as well as sales of winter car products and car cleaning items.
Halfords also said it had been hit by low customer confidence, meaning people are less willing to spend money.
There was a "significant" fall in sales across a range of categories, Halfords said in a trading update.
The number of car items bought in January fell 5.1 percentage points, cycling sales dropped 8 percentage points, while tyre purchases were down 4.3 percentage points.
More discounts and promotions have meant the cycling market has become "more challenging and competitive", Halfords said.
Customers are increasingly purchasing on credit, which is leading to lower margins on the sale of bikes and cycling goods than previously anticipated.
As a result, profit expectations before tax were revised downwards to the £35m to £40m range for the full year, compared with the previous forecast of £48m to £53m.
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Wet weather is the main reason retail sales volumes have fallen in the past year.
Retailers were hit by record rainfall in some parts of the country in July, while November spending fell to COVID-19 lockdown levels.
Low activity in this economic metric played a part in the UK entering recession.