The Halfords Group plc (LON: HFD) share price dropped 4.70% after releasing its Q3 trading update for the 13 weeks ended 29 December 2023. The company reported that its group revenues increased by 1.6% during the quarter, while like-for-like sales rose 2%.
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The UK retailer of motoring and cycling products and services noted that it registered more substantial revenues in the motoring division and the needs-based category than in the discretionary areas, where there was weaker spending.
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The firm’s October and November sales were robust, while its December sales were hindered by a mixture of wet and mild weather, which impacted demand for winter products and the foot traffic into stores. December sales were also affected by customers weighing difficult spending decisions ahead of Christmas.
The above effect was most evident in the retail motoring division, which recorded monthly LFL sales growth of above 10.2% in October and November before falling to a 15.3% drop in December.
On a positive note, the company noted that it had seen its January sales return to the growth levels witnessed in October and November as market conditions normalised. The company also confirmed that it has had a robust start to the year compared to December’s performance.
Halfords continued gaining market share in all four segments in which it operates: cycling, motoring servicing, consumer tyres and retail motoring. The company successfully navigated a challenging trading environment and kept executing its strategy.
The Group has continued to deliver revenue growth despite the challenging consumer environment, attributed to its strategic shift to needs-based, service-related sales focused on the motoring segment.
Graham Stapleton, Halford’s Chief Executive Officer, commented: “In what remains a very challenging time for our customers, we are pleased to have delivered a resilient performance in Q3. Against the current backdrop, our continued strategic shift towards needs-based and motoring service-related revenues has never been more relevant. However, we are still seeing drivers delay essential maintenance, and there is a worrying increase in potentially unsafe vehicles on the road. Recent TyreSafe data estimates that one in four tyres on Britain’s roads could be illegal, equating to just over 10 million tyres.”
Halfords share price.
The Halfords’ share price fell 4.70% to trade at 165.54p from Wednesday’s closing price of 173.70p.
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