Halfords profits get deflated after slump in pound

Falling pound affects more company’s…

The huge fall in the pound has impacted Halfords profits, even after an Olympic boost strengthened bicycle sales.

The Brexit vote resulted in the slump of the sterling which meant import costs grew, the stores promotions put a dent in its margins as well. Halfords shares fell by a total of two per cent.

The increase in the cost of goods associated with the dramatic fall in the pound was around £6m.

This aided the drop in the company’s profits, even though there was a total rise of £567m with like-for-like sales up by 2.2 per cent.

After the Rio Olympics and the spectacular success of Team GB, the company saw cycling sales increase by 4.6 per cent.

However, the sales increase on the bikes was partially due to a “20 per cent off all bikes promotion”, this would have also taken a toll on Halfords total profit margins.

Chief executive Jill McDonald, told Sky News: “As an importer of goods, the sterling devaluation brings input cost headwinds for the group.

“However we do have a number of mitigation opportunities including working with suppliers, price, cost/process efficiencies and alternative product sourcing.”