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Halfords shares plummet 17% as profit outlook dims

Shares of motoring and cycling retailer Halfords (LSE: HFD) plunged 17% Wednesday after the retailer warned of slowing sales growth and trimmed its full-year profit outlook. The downgrade came despite Halfords reporting higher first-half revenue …

Shares of motoring and cycling retailer Halfords (LSE: HFD) plunged 17% Wednesday after the retailer warned of slowing sales growth and trimmed its full-year profit outlook. The downgrade came despite Halfords reporting higher first-half revenue and profits.

In the 26 weeks to September 29, Halfords posted a 14% rise in revenue and 15.8% increase in underlying pretax profit. However, the company said trading has recently softened across big-ticket discretionary items like bikes. As a result, Halfords now expects full-year pretax profit between £48 million and £53 million, down from its previous £48 million to £58 million target.

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“Halfords has seen a good start to the year with strong sales and profit growth, and increased market share across the piste. However, the trading environment remains challenging, and appears to have worsened in the last couple of months,” said Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club. He added that with consumers feeling the pinch from rising interest rates and cost of living pressures, the outlook for Halfords’ second half is “more murky.”

Overall, while Halfords delivered operationally, the weakening consumer backdrop raises uncertainty about future demand.

Year to date Halford shares are down 14%.

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