UK's Halfords appoints new CEO, expects 2025 profit at high end of forecast

By Anandita Mehrotra and Chandini Monnappa

Britain's Halfords on Tuesday named gambling firm Rank Group's former chief Henry Birch its new CEO, and the provider of motoring and cycling products and services said it expects 2025 profit to come in at the upper end of its forecast range.

That sent shares up 12.7% to 140 pence, the highest in seven weeks.

Retail sales, which make up about 60% of its revenue, turned positive on a like-for-like basis in the second half, Halfords said.

Looking forward, it expects pretax profit in 2025 to come in at the upper end of the 32 million-37 million pound range ($42.25-$48.85 million) it had forecast earlier. 

Some analysts were less optimistic, however.

"While the improvement in earnings momentum is encouraging, we would like to see further evidence of sustained progress to believe that Halfords is entering a new upgrade cycle," said Ben Hunt, analyst at Panmure Liberum.

Birch succeeds Graham Stapleton, who was at the helm for seven years, a period during which Halfords navigated the challenges of the pandemic and transitioned into a retail and services business beyond cycling and motor services.

The management change comes as British retailers navigate a tough demand environment. Halfords was among a host of UK firms that warned of increased costs due to the rise in employer social security contributions announced in the UK budget.

Halfords, which employs more than 12,000 people, said it expects to mitigate the inflationary impact of the budget in 2026 with cost savings and pricing strategies.

While investors cheered the announcement and Peel Hunt analysts raised their 2026 forecast, they said this expected rise was "unheroic."

Peel Hunt, which raised its pretax profit guidance for next year from 33 million pounds to 36 million pounds, said its forecast may prove cautious amid cost headwinds and uncertainty over the global political and economic climate.

($1 = 0.7573 pounds)

(Reporting by Anandita Mehrotra and Chandini Monnappa in Bengaluru; Editing by Bernadette Baum)