Competition and delays force dip in Halfords’ cycle sales

Cycle sales dipped slightly in the Halfords’ pre-close statement for the second quarter and first half year ending October 1st 2010.

The national retailer blamed the like-for-like sales decline of one per cent on particularly strong comparatives, delays to the relaunch of new cycle ranges and increased price competition.

Despite the slip Boardman Bike sales increased 40 per cent compared to financial year 2010.

Group revenue for the half year also increased – by 7.6 per cent year-on-year, due in part to the Nationwide Autocentres acquisition in February 2010.

During the second quarter group sales increased 5.5 per cent over the equivalent period last year. The period saw Halfords undergo significant changes to its distribution centres.

Halfords CEO David Wild said: “Halfords will deliver solid profit growth in the first half despite the challenging environment. We continue to improve our cost base and in the past few months have successfully addressed a number of company issues, such as the reconfiguration of our warehousing and distribution infrastructure.

“We are meeting the challenges presented by a more cautious UK consumer by building on Halfords’ retail market leadership and strong business model. The integration of our Autocentres business is continuing well and, after this year of investment, we are well positioned to accelerate earnings growth.

“We are cautious about the macro-economic environment. Following a strong performance in the first half we intend to selectively re-invest the margin gains achieved by increasing our promotional stance. Our plans for the business are therefore based on the assumption that like-for-like sales in the remainder of year will settle at c. –3%. Through maintaining our focus on the cost reduction programmes already in place we would expect full year profit growth to be within the range of market expectation.”

The firm added that it would be "taking steps to re-align our range and pricing of cycles to more accurately reflect current consumer needs and tastes".