The big thing which may be worrying investors in cycling and car repairs and parts chain Halfords is the lack of consistency.
It was only a couple of months ago that the company was saying it would hit its annual guidance but now it is guiding for earnings to be right at the bottom of expectations. This has helped stall the shares’ recent momentum and prompted a wave of profit taking.
AJ Bell’s Russ Mould said: “First half profit nearly halved as Halfords warned of a big softening in discretionary spending in its stores. Halfords can keep the car on the road if all people are buying are the basics, but it may not see accelerating growth.
“At least this underscores the logic of the current strategy of bolstering its motoring services arm, announcing two significant deals on this front in recent weeks.
“This offers more predictable, repeat revenue and would make the business more resilient to ups and downs in the consumer backdrop.
“Halfords is also seeing success from its motoring loyalty club which is pulling in cost-conscious motorists keen to secure discounts when the running costs of their vehicles have gone through the roof.”