Car parts and bike retailer Halfords (HFD) has defied the gloom on the rest of the high street by reporting better than expected first-quarter profits.
Group sales at the company were up 1.7 per cent in the quarter to 27 June, boosted by a strong performance from its car maintenance arm and growth in bicycle and camping equipment sales.
But the retailer said sales would have been up by three per cent if it had benefited from a full Easter in the first quarter of the year.
The company pointed to Halfords’ “resilient and defensive” business and its continued growth strategy which saw it open three new stores, including its first Bikehut in Central London, in the quarter.
Halfords acting joint managing directors Paul McClenaghan and Nick Wharton said: “Whilst not immune to the ongoing challenging retail environment, our market leading positions, extensive ranges and unique service proposition continue to provide us with confidence in delivering full year earnings in line with our expectations.”
The two acting managing directors are overseeing the business until new chief executive David Wild takes over at the beginning of August.
The firm has been without a chief executive since the surprise resignation of Ian McLeod, who left to run Australian retailer Coles in February.
Halfords said its car maintenance division had continued to perform strongly, reflecting its “inherent counter-seasonal and defensive characteristics” as well as ongoing product innovation.
Leisure sales, which cover bikes and camping equipment, continued to improve after a slow start and in-car technology, such as sat-navs and stereos, continued to grow.
The retailer said the strong contribution from car maintenance meant gross margin was “slightly ahead” of internal expectations and above the upper range of its previous guidance. Halfords is seen by many City analysts as a more defensive retail stock as car owners are reluctant to stop spending on their vehicles.
Analysts at Morgan Stanley described the trading statement as “reassuring” and reiterated their “equalweight” recommendation.
“Performance is ahead of consensus [expectations] and comments on mix and trend through the quarter are encouraging,” they told clients.
“Most other hardline retailers would love to have this level of like-for-like [sales] at the moment.”
The group also said it continued its share buy-back programme - since June 2006, Halfords has spent £66.1 million buying back shares.
Halfords has over 10,500 staff and sells over 10,000 different product lines.
Its own brands include Ripspeed for car enhancement, Bikehut for cycles and cycling accessories.
The firm has added two premium brands this year – Boardman cycles and accessories, where Halfords has exclusive UK distribution rights, and URBAN Escape for camping equipment. The firm has 451 stores, including three stores in the Czech Republic, 24 of which are smaller format neighbourhood stores and six are standalone Bikehuts.
Last week outdoor retailer Blacks said it had seen a hike in sales at the start of the summer season as cash-strapped UK holidaymakers shun foreign holidays to go camping instead.
Music fans heading to the myriad of UK summer festivals also helped boost the firm.