Halfords revenue up against pre-Pandemic levels but issues profit warning
Halfords has recorded a period of strong revenue against pre-Pandemic levels, but warns that a lack of skilled labour could lead to lower profit margins.
The motoring and cycling retailer saw an increase in revenue of 38.3% against pre-pandemic levels with an increase of 12.6% on a like-for-like basis.
However, Halfords describes a challenging labour market, resulting in lower recruitment of skilled technicians in its Autocentre businesses, which the retailer expects will limit the growth of higher margin sales.
As a result, Halfords has revised its expected underlying profit before tax for the 2023 financial year from £60m to £50m.
Looking ahead to the 2024 financial year, the retailer said it remained particularly difficult to forecast with any certainty. It added that consumers will continue to face inflationary pressures, and so it does not expect a significant short-term recovery in discretionary spending.
Halfords said it anticipates a year-on-year cost inflation in wages, energy and currency, but added that it will partially offset these pressures through reductions in freight and product costs, whilst continuing to reduce its cost base.
“We remain confident in the longer-term outlook and believe the business is well positioned to capitalise on the strong platform we have built as market conditions improve”, the group said.
In November, Halfords recorded a £28.9m fall in profits as consumer budgets continued to squeeze.