Halfords reports jump in profits due to rise in 'staycations'
HALFORDS has notched up a hike in sales thanks to surging demand for roof boxes and camping gear as more Britons chose to "staycation" in the UK.
The car parts-to-bicycles chain said like-for-like retail sales rose 3.5 per cent in the 20 weeks to August 18, with motoring sales lifting 2.3 per cent.
Halfords saw travel solutions sales jump 8.2 per cent higher, driven by the rising popularity of holidaying in the UK in the face of poor exchange rates from the Brexit-hit pound.
It also reported strong demand for bikes, with sales up 5.2 per cent and electric bikes and repair services seeing strong performances.
Outgoing chief executive Jill McDonald, who is leaving next month to head up Marks & Spencer's fashion and homewares arm, said: "A combination of good planning and execution meant that we optimised sales from the staycation summer, with strong growth in camping, roof boxes and cycle carriers."
But the group saw a 2 per cent drop in like-for-like sales at its autocentres service, leaving overall group-wide same-store sales 2.7 per cent higher in the 20-week period.
Shares in Halfords leaped nearly 5 per cent higher after its trading update.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said Ms McDonald's strategy had helped get the chain's "sales engine firing again".
He added: "Retail growth is strong, and while a sceptic might put that down to the group benefiting from what it has described as a 'staycation summer', the revamped and refocused offer seems to have got Halfords into exactly the right place to meet customer needs."
The group's latest update showed strong online sales, with growth of 11.2 per cent and 85 per cent of orders picked up in store.
It has revamped 11 stores under a new format and plans to ramp up the roll-out over the rest of the year.
The group confirmed it was on track for full-year profit forecasts and reiterated an expected hit of around £25 million from the weak pound, of which some £15 million will be taken in the first half.
But it stressed it expects to fully recover the impact over time.