Halfords: Sales jump but retailer warns tariffs could hit supply chain
Motoring and cycling specialist Halfords has reported an uptick in sales but warned US President Donald Trump’s tariffs could push up costs across its supply chain.
The retailer and services provider told markets this morning that sales grew 2.3 per cent in the year to March 28.
Its share price rose more than 13 per cent in early trades.
Retail sales, which account for about 60 per cent of the business, grew by 1.7 per cent in the second half of the year after a period of decline.
Halfords warned that retail sales “remain volatile” in the UK and the consumer outlook is uncertain.
However, the company said it will “mitigate the entire impact” of the higher wage taxes announced in last Autumn’s budget through cost savings and pricing.
The changes to the Minimum Wage and National Insurance thresholds and rates will increase Halford’s annual bill by £23m.
Halfords has previously said it may raise the price of its garage repair service due to cost pressures.
The group also warned that Trump’s 10 per cent worldwide tariffs are likely to have an indirect impact on its supply chain.
“Halfords does not export or import goods to or from the US… [but] the indirect impact on our supply chain, including on product costs, freight rates and shipping times remains to be seen, as does the impact on consumer spending,” the company said.
Retailers across the UK have warned that Trump’s tariffs will push up costs and push down consumer sentiment.
Panmure Liberum analysts rated the stock a ‘Hold’.
“While the improvement in earnings momentum is encouraging, we would like to see further evidence of sustained progress to believe that Halfords is entering a new upgrade cycle,” analysts said.
Separately, Halfords announced that its CEO Graham Stapleton would be stepping down after seven years in the role.
Stapleton will be succeeded by Henry Birch, former boss of gambling company The Rank group, who joins the business this week.
“After seven years leading the transformation of Halfords from a cycling and motoring retailer to an omnichannel motoring services super-specialist, most recently brought to life through the Fusion programme, it is time for me to hand over the reins for the next phase of the business’s evolution.
“I wish Henry and the team all the best,” Stapleton said.