Halfords pedals past consensus in first quarter

10th Jul 2014 09:29

- Group sales up 7.9%, LFLs up 7.9%- Cycling LFL sales up 21.4%- Guidance unchangedWith its public image brightened by a close association with the enormously successful recent launch of the Tour de France, Halfords sprinted past the peloton of first-quarter expectations with strong retail like-for-likes sales (LFLs).However, investors seemed somewhat disappointed as the breakneck pace of growth seen in the last quarter of the previous financial year (Q4) was not maintained, even though consensus forecasts and earlier quarters were roundly beaten.However, while group sales growth of 7.9% was slower than Q4 of last year it was well ahead of Q3, while Halfords Retail grew LFLs 7.9%, miles ahead of the consensus of 5.7%. Online Retail sales grew by 13.1% and even its troublesome Autocentres arm grew LFLs 4.3%, ahead of the 3% consensus. Cycling sales, the recent engine of growth, rose by 21.4% on a LFL basis, which was down from the 41% seen in Q4 but ahead of the 19% in Q3 and 13% from Q2.Chief Executive Matt Davies said: "Halfords continued to drive top-line growth in the quarter, with the Cycling category delivering another exceptional performance. Our actions resulted in growth across all elements of Cycling reflecting our continued focus in the category, enhanced by favourable weather and increased interest in the Tour de France."He pointed to his Getting Into Gear strategy continuing to progress within Retail, while satisfactory sales were driven in Car Maintenance against challenging comparatives and significant levels of clearance in Car Enhancement in the prior year comparative were negated by continued success in Car Cleaning. "The acquisition of Boardman Bikes and the launch of Car Parts Direct had a negligible effect on the sales performance but are illustrations of our intent to grow our authority in Cycling and Auto," he said, adding that guidance for the full year remained unchanged.Broker Oriel called it a "stellar" update and added 2% to its forecasts.Analysts at Singer N+1 said: "The last two quarters indicate the plan is being well executed and progressing quicker than widely anticipated. "The route map for the turnaround remains transparent and our analysis of potential share gains in core categories comfortably supports management's £1bn full year 2016 sales target, whilst the economic benefits of success should deliver earnings before interest, tax, depreciation and amortisation well in advance of management's cautious initial guidance and possibly towards 15%."Shares in the company were down 1.50% to 484.5p at 09:05 on Thursday.OH