No bumps in the road expected for Halfords despite retail gloom

Bicycle and car maintenance retailer Halfords is expected to report that business is running as usual in its half-year results next week, despite many other retail stores being negatively affected by this year's unusually long hot weather.

The retailer is expected to remain on track for its full-year profit guidance, which will be broadly in line with last year's profit of £71.6m.

New chief executive Graham Stapleton outlined the business' 2019 strategy in September, which included raising investment in its network of stores and service outlets from £40m to £60m from 2020.

Having been updated by the firm just two months ago, Liberum equity research analyst Adam Tomlinson told City PM that not much is expected to have changed in that time. As such, analysts are not anticipating any surprises from Halfords on Thursday.

Tomlinson added that Halfords could have indeed reaped a benefit from the UK's delayed start to the winter season, given the majority of its summer sales focus on outdoor activities such as cycling and camping.

The results come after a reported bid for rival firm Evans Cycles fell flat, after Mike Ashley's Sports Direct swooped in to buy the business out of pre-pack administration last week.

Peel Hunt analyst Jonathan Pritchard told City PM: "They have walked away from Evans, and will have to now concentrate on an organic route to cracking the premium bikes sector."

Signs of this strategy have already begun to emerge, after Halfords said it plans to double the number of stores run by its performance cycling brand Cycle Republic.