Why Halfords Shares Just Surged to the Highest Level Since October 2023

Halfords Group (LON: HFD) shares surged more than 20% on Thursday to 217p — their highest level since October 2023 — after the UK’s leading motoring and cycling retailer delivered full-year results that beat profit forecasts and posted its best gross margin in ten years.

The group reported underlying profit before tax of £45.4m for the 52-week period ended 27 March 2026, a 4.1% increase year-on-year, and said performance was ahead of market consensus. Stripping out a change in accounting treatment for acquired intangibles, underlying PBT grew by more than 8% to £41.5m.

Gross margin expanded by 210 basis points to 52.8%, the highest level in a decade, more than offsetting inflationary cost pressures. Like-for-like group revenues rose 4.8%, with Retail up 4.1% and Autocentres — which now accounts for roughly 40% of group sales — climbing 5.8% on a like-for-like basis.

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Return on capital employed improved 160 basis points to 14.2%, comfortably above the group’s 10.6% cost of capital, while free cash flow of £25.3m left the business with net cash of £11.2m. The board recommended a final dividend of 6.0p, lifting the full-year payout to 9.0p.

Chief Executive Henry Birch said the ‘Optimise’ phase of Halfords’ Fit for the Future strategy was “already supporting stronger financial returns alongside improved customer experience,” and flagged strong trading in April, May and June.

Looking ahead, management now expects FY27 underlying PBT to land near the top end of an upgraded consensus range of £45.7m–£52.3m, weighted towards the first half. Incoming Chair Jock Lennox will formally take up the role following the AGM on 10 September 2026.