Halfords rides to higher profit expectations as COVID-19 continues to drive cycling demand

Following the news that Halfords has increased its profit before tax guidance for H1 FY2020/21 to £55m, up from £35-40m:

Jonathan Rock, Associate Retail Analyst at GlobalData, a leading data and analytics company, offers his view on this news;

Halfords has continued to excel in September driven by a dramatic increase in cycling sales thanks to the prolonged warm weather, and rising fears surrounding a second peak of COVID-19 leading consumers to avoid public transport. Its established reputation has helped it to absorbed a lot of the demand from new cyclists throughout the pandemic, however H2 FY2020/21 will undoubtedly be more challenging as winter creeps in and the amount of staycations dwindles, alongside general economic uncertainty.

To combat this, it’s up to Halfords to stimulate demand – for example, through encouraging cycling for city commuters and cycling programmes in schools whilst the roads are quieter, or advertising the affordability of servicing your current car over buying a new one. The retailer must also continue to build awareness via social media of its unique Mobile Expert proposition, which has proved popular throughout the pandemic and helped boost Autocentres l-f-l sales growth to 18% in the five weeks to 25 September.”

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