Published by Global Banking & Finance Review®
Posted on June 25, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GoogleHalfords exceeded profit forecasts and expects stronger earnings in H2 2026 due to cost cuts and supply chain improvements.
(Reuters) -British bicycle and car products retailer Halfords beat annual profit forecasts on Wednesday, helped by a drive to improve its supply chain, and said trading so far in its new financial year was in with its expectations.
The company also said it expected pretax profit for the year through March 2026 to be weighted towards the second half, partly due to costs related to delays in rolling out a warehouse in Coventry, central England.
Halfords shares, which had fallen nearly 14% in 2025, were up 0.9% at 1005 GMT.
British retailers are bracing for a difficult year due to rising wages and social security contributions, and as economic uncertainty dampens consumer spending.
Halfords has been cutting costs, adopting more dynamic pricing and working to improve product sourcing to offset subdued demand - its cycling market has fared better than the auto tyres segment, but demand is still below pre-COVID levels.
"The business has delivered a strong financial performance, made good strategic progress and has a clear plan in place to tackle external inflationary forces," said CEO Henry Birch, who took over in April this year just as Britain's Labour government raised employer tax contributions and the minimum wage.
Halfords had said it expects to incur 23 million pounds in added labour costs this year.
"The CEO takes over at the helm of a ship that has evolved well but has still to emerge fully from troubled waters. If he can steer margins back to near where they were, the shares should re-rate" Peel Hunt analysts said.
Halfords expects the boost from cost cuts to be more pronounced in the latter half of the year.
The company reported underlying pre-tax profit of 38.4 million pounds ($52.3 million) for the year through March 2025, above analysts' forecast of 36.3 million in a company poll.
($1 = 0.7342 pounds)
(Reporting by Raechel Thankam Job in Bengaluru. Writing by Pushkala Aripaka. Editing by Rashmi Aich and Mark Potter)
Halfords beat annual profit forecasts, reporting an underlying pre-tax profit of 38.4 million pounds for the year through March 2025, which was above analysts' expectations.
Halfords expects its earnings for fiscal 2026 to be weighted towards the second half due to costs related to delays in rolling out a warehouse in Coventry and rising labour costs.
The cycling market has fared better than the auto tyres segment, as Halfords has been working to improve product sourcing and cut costs to offset subdued demand.
British retailers are bracing for a difficult year due to rising wages, increased social security contributions, and economic uncertainty that dampens consumer spending.
CEO Henry Birch expressed confidence in the company's strong financial performance and strategic progress, stating there is a clear plan to tackle external inflationary forces.
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