The cycle and car parts retailer said demand for bikes and cycling products had continued despite the end of the peak cycling and summer staycation season, while sales of its car products and services had returned to growth.
As a result, the company expects half-year profits to top £55m, compared with the £35m-£40m it was predicting last month and fears of a £10m loss raised in July. The shares jumped 18% after the trading update was published on Thursday morning.
Halfords said “unprecedented” levels of demand had pushed up sales of bicycles and cycling-related products by 46% in established stores in the five weeks to 20 September. Overall sales in those stores were up 22%.
Consumers have turned to bikes in recent months as a way to avoid public transport during the Covid-19 pandemic, as well as for leisure and exercise after the lockdown. Sales were also boosted as holidaymakers bought bikes to use during their summer breaks spent in the UK instead of abroad.
Although bike use has fallen back from a peak in April, there were still double the number of cyclists on the roads in September than in 2019, according to Department for Transport figures.
The Association of Cycle Traders, which represents thousands of independent shops as well as major chains, said sales had stayed buoyant across the board as local authorities around the country had used government funds to put in temporary cycle lanes and other infrastructure to make cycling and walking easier.
Jonathan Harrison of the ACT said sales were above last year but had slowed from the spring, partly because of a shortage of bikes, parts and accessories as major brands struggled to keep up with demand. Harrison said: “If local authorities keep safe infrastructure open that will have a massive impact.”
Halfords, which has 447 stores in the UK, has benefited from higher sales of bikes but also demand for servicing them after the government launched a cycle repair voucher scheme in July.
Despite its raised profit guidance, the company said it was cautious about the outlook for the the rest of the year. Halfords said sales of motoring products rose by 7.5% during the period while its vehicle servicing and repair business also grew.
Halfords has launched a campaign to recruit hundreds of skilled technicians to work in its stores and autocentres in order to meet demand.
However, it said the potential impact of the second wave of coronavirus in the UK seemed to be “more pronounced” than a few weeks earlier. The retailer said it was “cautious in outlook” about the economic impact of the end of the government’s furlough scheme at the end of October, as well as the “uncertain” outcome of Brexit negotiations.
