UPDATE 1-Halfords sales up as children's bikes make Christmas gift lists

Thu Jan 16, 2014 5:28am EST

LONDON Jan 16 (Reuters) - Bicycles-to-car-parts group Halfords said children's bikes and cycling accessories had been high on wish lists this Christmas, helping third-quarter sales beat expectations.

The group, in the early stages of a 100 million pound ($163.5 million) three-year turnaround plan, said on Thursday core retail sales at stores open over a year rose 5.9 percent year-on-year in the 15 weeks to Jan. 10, its fiscal third quarter.

That was below first-half growth of 7.7 percent - when sales jumped on hot weather, improved ranges and a strong British showing in cycling events - but ahead of an average analyst forecast for 3.8 percent, according to a Reuters poll.

Halfords shares, up almost 40 percent on a year ago, had risen 7.1 percent to 493.8 pence by 1014 GMT, making them the top gainer on the FTSE 250 index which was marginally down.

Despite gaming consoles and tablets topping many Christmas wish lists this Christmas, bikes were also in demand with underlying cycling revenue up 19.5 percent, helping offset lower growth in car maintenance sales due to milder weather.

"Cycling was again the stand-out performer, with our customers engaged by refreshed ranges," Chief Executive Matt Davies said, adding the firm had allowed customers to wait until Christmas Eve to collect bikes to help keep gifts a secret.

Like-for-like sales at its smaller vehicle service and repairs arm Autocentres rose 0.1 percent.

The group said online sales, a key focus in a turnaround plan which also includes staff training, new cycling ranges and store revamps, rose 13.8 percent in the period, with the firm taking its highest ever value of orders on Christmas day.

N+1 Singer analysts said Halfords' new strategy, which aims to reach 1 billion pounds in annual sales by 2016, was underpinning forecasts for coming years.

"And with further (forecast) upgrades possible in the short term due to improving UK consumption, the investment case is compelling," they added.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.