Halfords backs FY profit expectations after strong first half

(Sharecast News) - Halfords backed its full-year profit expectations on Wednesday as it hailed "strong" trading in the first half, but shares of the provider of motoring and cycling products and services slumped as indications of a weaker second half prompted investors to take some profits.

In the 26 weeks to 2 October, group like-for-like sales rose 7.1%, with sales in the retail segment up 7.7%, while motoring and cycling saw increases of 7.3% and 8.3%, respectively. LFL sales at Autocentres grew 6.1%.

Halfords said that as communicated in the August trading statement, its performance was underpinned by momentum across the business as it delivered against its strategic priorities, alongside strong demand for seasonal categories through the summer months.

For FY27, it continues to expect underlying pre-tax profit of between £55m and £65m. "The strong H1 performance combined with accelerated investments in marketing and technology in H2 will result in underlying profit before tax being weighted towards H1," it said.

Halfords is due to release its HY27 interim results on 26 November.

Chief executive Henry Birch said: "The business continued to perform positively through the first half as we benefited from good execution against our strategic priorities and strong sales of seasonal categories through the warm summer weather. We move into the second half with confidence and look forward to sharing more detail on our progress at our interim results announcement later next month."

At 1040 BST, the shares were down 8.3% at 255p.

Russ Mould, investment director at AJ Bell, said a first-half trading update suggesting a weaker second half is in store has helped put the brakes on Halfords' recent share price recovery.

"Increased spending on necessary tech updates and marketing campaigns over the winter are expected to weigh on profit in the second six months of the financial year," he said. "This was a cue for some profit taking for one of the FTSE 250's best performers in 2026. Today's announcement is unlikely to puncture enthusiasm around CEO Henry Birch's turnaround plan in the longer term.

"The strategy of steering the business towards auto parts and repairs is helping to make revenue and cash flow more predictable and on the cycle retail side a focus on higher-margin e-bike and e-mobility market is providing a boost to profitability.

"These factors are reflected in the strong first-half performance and the conservative second-half guidance and incorporation of important investments which should help underpin future growth will be seen as prudent by many shareholders."

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