Cycling retail sector outlook possibly improving following Halfords' upgraded profit projection
Posted on in Business News , Cycles News
Halfords has upgraded its profit expectations for 2025 following a strong end to 2024, signalling a possible boost for the wider cycling retail sector after a difficult period.
The news offers some hope to bike retailers, including independents, as the industry looks to recover from recent challenges.
The revised projection comes after better-than-expected sales in the final quarter of 2024, with Halfords reporting like-for-like retail growth of 13.1% in December. The surge was driven by increased demand for bikes during the Christmas period and successful promotional campaigns. The figures could indicate a broader market improvement, potentially benefiting smaller retailers as a result.
Despite the positive trading update, uncertainty remains due to factors introduced in the latest Budget, including higher employer national insurance contributions and reduced business rates relief which will impact operating costs.
In a statement, Halfords said: "In recent months we have seen an improvement in trading alongside continued progress on a number of key initiatives, including our pricing and promotion strategies and cost reduction measures," Halfords stated. "Cumulatively, these factors lead us to expect FY25 underlying profit before tax of £32m to £37m.
"Despite the recent positive performance, there remains considerable uncertainty regarding the outlook for the UK consumer in light of measures introduced by the Autumn Budget, which take effect from April and hence are in force for the entirety of FY26.
"While the impact of changes to the minimum wage and national insurance contributions are relatively easy to quantify, adding c.£23m to our direct labour costs in FY26 alone as announced in November, their effects on the demand environment and health of the broader economy are harder to predict.”
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