(Alliance News) - Halfords Group PLC on Wednesday said it suffered from material weakening in three of its four core markets, citing weak customer confidence and wet weather, as it lowered its guidance.
Shares in the Worcestershire-based motoring and cycling products retailer fell 28% to 145.00 pence each on Wednesday afternoon in London.
The company lowered its underlying pretax profit guidance for the current financial year ending March 29 to between GBP35 million and GBP40 million from a previous guidance of GBP48 million to GBP53 million.
The new guidance would be at least 22% lower than the underlying pretax profit of GBP51.5 million it had reported for financial 2023.
Halfords said it was impacted by weak customer confidence and unusually mild and very wet weather, which affected footfall into stores and sales of categories such as winter and car cleaning products.
The firm said three of its four core markets, namely cycling, retail motoring and consumer tyres, suffered from material weakening.
"The cycling market has become more challenging and competitive as it continues to consolidate. Promotional participation has increased, and more customers are purchasing on credit, leading to weaker gross margins than previously anticipated," it said.
Halfords added: "Our [profit] forecast assumes the same challenging market conditions continue for the rest of Q4, including through our peak Easter cycling period in March. We have continued to take decisive action on cost, but in the short period between now and the end of the financial year this will not be sufficient to offset the significant market deterioration we have seen."
However, the company said it remained confident in its strategy and longer-term growth prospects.
"When our core markets recover, the platform we have built leaves us exceptionally well-placed to succeed," it said.
By Tom Budszus, Alliance News slot editor
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Halfords (HFD)