Bike crash: Halfords share price plummets as mild weather and consumer confidence hit profits

Shares in Halford have dropped through the floor as the company said mild weather and weak consumer confidence were set to hit its bottom line.

The bikes and car parts seller said it was reducing expected profit before tax of between £58m and £62m, far down from November estimates that profit would be broadly in line with last year’s £71.6m.

The company’s shares dropped by as much as 25 per cent to 214p as the admission spooked investors, before partly recovering to stand at 228.6p, 18 per cent down.

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Chief executive Graham Stapleton acknowledged the company has gone through a difficult period, but insisted Halfords’s free cash flow is still strong.

“This has been a challenging third quarter for the business, driven by exceptionally mild weather and ongoing weak consumer confidence. Together, these factors have led us to reduce our profit expectation,” he said.

Like-for-like revenue dropped 1.7 per cent in the third quarter, with its motoring arm particularly badly hit, dropping 3.4 per cent as drivers had their cars serviced less in the relatively warm weather.

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Online sales, which makes up 20 per cent of the company’s revenues, grew 7.5 per cent, Halfords said.

“Halfords is a robust business and we firmly believe that the strategy we outlined in September is the right direction for the business,” Stapleton said.