2nd Sep 2015 06:35
LONDON (Alliance News) - Car and bicycle parts retailer Halfords Group PLC on Wednesday said its cycling sales have declined so far in the second quarter and will be below expectations for the period, though trading elsewhere in the business remains robust.
Halfords said its cycling sales in the eight weeks from July 4 to August 28 were down 11% on a like-for-like basis against tough comparatives and will now be below its expectations for the second quarter. The "disappointing" performance was driven by mainstream bikes and associated parts and accessories, which Halfords said it considers to be a market-driven issue resulting from higher levels of discounting and poor weather conditions which have deterred cyclists.
As the group exits the peak mainstream bikes season, it intends to launch a refresh of its children's bikes and accessories range and said it remains confident on the medium and long-term growth opportunities in the cycling market.
Trading elsewhere in the business was robust in the eight-week period, with like-for-like retail sales down 1.3% overall, due to the cycling decline, but like-for-like sales rising in its car maintenance, car enhancement and travel solutions divisions.
Despite the cycling concerns, the company still expects its full-year pretax profit to be in line with market consensus and said its retail gross margin should be at the high end of guidance.
"This recent weakness in our Cycling sales is disappointing, but it comes after two years of very strong growth in the category and has been partly offset by strong growth in both Car Maintenance and Car Enhancement sales, which is a testament to the balanced nature of the business," said Jill McDonald, Halfords' chief executive.
"Looking ahead, we remain confident in the long-term growth opportunities in Cycling, and I will talk more about our plans for Cycling and across the broader group at our interim results in November," McDonald added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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