Halfords Group PLC has released its Q3 Trading Update for the financial year 2024, reporting a resilient performance despite challenging market conditions. The company saw continued share gains and a focus on motoring services, which drove a strong performance in Q3. The Group's revenue grew by 1.6% and 2.0% on a like-for-like basis in the quarter, with stronger sales in motoring and needs-based categories partly offset by weaker spend in discretionary areas.
While October and November sales were robust, December saw a decline due to mild and wet weather impacting demand for winter products and footfall into stores. However, in January, sales growth in Retail Motoring returned to the levels seen in October and November as conditions normalized. The company also continued to gain market share in all four key markets, despite market volumes remaining below expectations.
Autocentres delivered robust like-for-like growth, with year-to-date double-digit growth driven by improvements to the customer proposition and a focus on value. However, the Consumer Tyres market remained subdued, with drivers delaying essential maintenance longer than anticipated. The MOT market also softened in the quarter due to the ongoing impact of changing MOT seasonality caused by Covid disruption.
In the retail segment, motoring sales were adversely impacted by the lack of sub-zero temperatures, but the strategic shift towards services and B2B meant the Group was less prone to such impacts. Cycling saw an improvement in like-for-like decline, reflecting continued share gains in a market that was down on a volume basis versus the prior year.
The company also announced a strategic partnership with specialist tyre distributor Bond International, expected to result in cost reduction and improved operational processes in Autocentres. Additionally, Halfords is rolling out its Fusion concept to enhance the motoring services offer in towns, targeting a launch date in Q1 FY25. The company is also managing costs effectively and expects cost savings in FY24 to exceed the previously announced target.
Overall, Halfords Group PLC maintained its profit guidance for FY24 and expects a cash inflow in H2, resulting in a small net debt position at year-end, excluding lease debt. Despite the challenging consumer environment, the company remains focused on driving growth through strategic initiatives and cost management.