Halfords Sees Profit Decline While E-Bikes Drive Cycling Sales

REDDITCH, UK – In the latest financial update for 52 weeks Halfords reports a 3.7% increase in revenue to GBP 1.135 billion (1.296b euro) compared with the previous year. However, profit before tax decline by 6% to GBP 67million (76m euro) mainly as the result of the weakened pound.
Halfords reports ‘declining sales in bike volumes offset by increase in sales value.’ – Photo Halfords

According to Halfords the weaker pound against the US dollar resulted in a GBP 40 million in additional costs, primarily on imports. Cycling sales improved by 2.9% on a LFL basis despite unfavorable weather in the fourth quarter and not repeating the sales volume of the previous year. According to Halfords “Bike volumes declined year–on-year as expected, but was more than offset by an increase in sales value.” Halfords parts, accessories and clothing sales continued to grow.

Growing importance of e-bikes

“Sales of e-bikes were strong,” reports Halfords, “reflecting the popularity of our new own-brand ranges launched in the year. Our cycle repair services and ‘cycle to work’ business also performed strongly. Tredz and Cycle Republic continued to perform well and deliver good LFL sales growth. Four new Cycle Republic stores were opened in the year, with one shortly after the year end, taking the total to 20 stores.”

Service-related retail sales, which consist of the revenue generated from paid in-store fitting and repair services plus the associated product attached to the transaction, is becoming more and more important for Halfords. It increased by 14.2%, with particularly good performances from the company’s dash cam fitting and cycle repair services.

Focusing on service

“We are pleased with the full-year 2018 performance in a challenging retail environment, with profits in line with expectations,” said Halfords CEO Graham Stapleton. “By focusing more on our specialisms and our services, ensuring that we always provide best value to our customers and presenting a more seamless and inspirational omni-channel experience, there is a really exciting future of growth ahead of us.”