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Halfords has raised its profit guidance for the rest of the year after a surge in bike sales during the pandemic.
The retailer said demand for bikes and cycling products has continued following the end of the peak cycling and summer staycation season, while sales are growing again for its car products and services. As a result, it now expects half-year profits to top £55m, compared with the £35m to £40m it was predicting earlier this month. Shares jumped 18% after the trading update was published on Thursday morning.
Halfords said “unprecedented” levels of demand for the group’s bicycles and associated products pushed like-for-like sales up 46% in the five weeks to 20 September, while overall sales grew by 22% during the period.
Consumers have turned to bikes in recent months as a way to avoid public transport during the pandemic, as well as a leisure activity or way of getting exercise following the lockdown. Sales were also boostedas holidaymakers bought bikes to use during their summer breaks spent in the UK instead of abroad.
The cycle and car parts retailer, which has 447 stores in the UK, has benefitted from higher sales of bikes but also demand for servicing them.
Despite its raised profit guidance, the company said it was “cautious” about the outlook for the the rest of the year.
Halfords said sales of motoring products rose by 7.5% during the period, while its vehicle servicing and repair business also grew.
Halfords has now launched a campaign to recruit “hundreds” of skilled technicians to work in its stores and its autocentres.
However, it warned that the potential impact of the second wave of coronavirus in the UK seems to be “more pronounced” than a few weeks earlier.
The retailer also raised concerns about the economic impact of the end of the government’s furlough scheme at the end of October, as well as the “uncertain” outcome of Brexit negotiations.
Source: The Guardian
Keyword: Halfords raises profit forecast to £55m as cycling sales roll on | Business