Halfords profit warning sends stock down heavily
After just 20-minutes of the session Halfords, the cycle and auto parts retailer, saw its stock down 23% on a profit warning.
The group trading statement for the full-year said the company saw a further material weakening in three of four core markets of cycling, retail motoring and its consumer tyres business, resulting in a significant drop in like-for-like revenue growth. As a result Halfords now sees pretax profit to fall into a range of between £35mln to £40mln, down from a range of £48mln to £53mln.
(AI Video Summary)
Halfords
Halfords, a company that repairs bicycles and sells auto parts, recently shared some disappointing news about its trading performance for the entire year. It appears that their profits will be lower than expected in the third quarter. As a result, the company's share price has taken a big hit and reached its lowest point since October 2022. In just 20 minutes of trading, the stock dropped by a whopping 23.5%. This happened because people are worried about the cycling, retail motoring, and consumer tyres businesses of Halfords.
There are two important areas of the company that have been negatively affected. The first is cycling, where weak customer confidence and unfavorable weather conditions have made things challenging. The unusual mildness and wetness of the weather have caused fewer people to visit Halfords, resulting in lower sales of products like winter and car cleaning items. The second area is retail motoring, which has also suffered because of the same reasons.
Halfords expected profits
Because of these issues, Halfords has revised its expectations for full-year profits. Initially, they were anticipating profits in the range of £48-53 million, but now they're looking at a range of £35-40 million. Naturally, investors are concerned about the future and this has led to the drop in the company's share price. It's expected that the stock might continue to decline throughout the day.
In order to bounce back, Halfords will have to come up with strategies to attract more customers and adjust to the changing market conditions. They need to find ways to increase demand and make sure they can adapt to the challenges they're facing. Otherwise, their profitability will continue to suffer.
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