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Halfords jumps to four-year high after lifting FY27 profit outlook
At a glance
- Halfords raised FY27 underlying PBT guidance to £5565m, above market consensus of £52.6m.
- Shares rose about 12% to 268.85p, the highest since March 2022.
- Stronger trading momentum and warm summer weather boosted seasonal categories such as cycling and outdoor products.
- Weather benefit expected to add mid-single-digit millions to profit.
- FY27 earnings expected to be more heavily weighted to H1; H2 will see stepped-up tech and marketing investment aimed at long-term growth.
- FY26 fundamentals improved: like-for-like sales +4.8%, underlying PBT £45.4m, gross margin +210bps, free cash flow £25.3m, net cash £19.1m.
- Halfords joined the FTSE 250 on August 4, gaining greater investor visibility.
Market reaction and upgraded guidance
Shares in Halfords (LON: HFD) surged on Thursday after the British motoring and cycling retailer raised its full-year profit forecast following stronger-than-expected trading. The stock climbed about 12% (up 11.56%) to 268.85 pence its highest level since late March 2022 markedly outpacing the flat trading of the FTSE 250 index.
Halfords now expects FY27 underlying profit before tax of £55 million to £65 million, above the current market consensus of £52.6 million and higher than the wider consensus range of £48.9 million to £55.1 million. Management said the upgrade reflects robust performance so far this year and particularly strong demand in seasonal categories.
Drivers and outlook
The company credited momentum across its core businesses and an unusually warm summer that has supported demand for cycling and outdoor products. Halfords said the weather-related benefit is expected to add mid-single-digit millions of pounds to profit.
The upgraded guidance also points to a more profitable first half of FY27. Halfords expects earnings to be more heavily weighted toward the first half, in part because it plans to step up investment in technology and marketing during the second half of the year. Management emphasised that the additional spending is intended to support longer-term growth rather than signalling any deterioration in trading.
The upgrade builds on a strong FY26 performance. Like-for-like sales increased 4.8% in FY26, underlying profit before tax rose to £45.4 million, gross margin expanded by 210 basis points, and free cash flow reached £25.3 million. The group finished the year with reported net cash of £19.1 million.
Halfords has also gained greater visibility with investors after being added to the FTSE 250 on August 4, a recognition the company says follows improvement in its financial performance and execution of its Fit for the Future strategy to drive a more service-led, resilient earnings profile.
For investors, the key question will be whether the stronger near-term profit outlook offsets the increased second-half investment. If strategic spending accelerates growth and supports margins over time, the upgraded guidance could mark the start of a more sustained recovery for the business. If not, investors will want to see that second-half investments translate into higher returns in future periods.
Overall, todays move reflects market optimism that Halfords strategic initiatives are gaining traction and that demand trends in seasonal categories have improved the near-term earnings picture.
