Car parts-to-bicycles retailer Halfords (HFD) reverses 9.5p to 540.5p on mild disappointment at slower first quarter growth. Yet the FTSE 250 retailer in fact delivered a creditable 'broad-based top-line performance' in the face of two previous years of stellar like-for-like growth.

To skip through the Redditch-headquartered retailer's first quarter trading statement, click here. This reveals retail like-for-like growth, representing UK and Irish stores trading for more than a year, slowing to 3.5% over the 13 weeks to 3 July. This compares with 7.5% growth in the fourth quarter and 7.9% growth in the first quarter of the last financial year respectively.

Web chart - HFD - July 15

Yet closer inspection reveals just how creditable the performance from Halfords actually is. Adjusting for the timing of Easter, underlying retail like-for-like growth weighed in at 4.2%, a twelfth consecutive quarter of positive like-for-like growth on the spin. Moreover, 2% like-for-like progress in cycling was good going given a bumper 21.3% prior year 'comp' in the cycling category, not to mention less helpful weather this time round.

Halfords continues to take share in a £1 billion cycling market, selling more and more premium bikes due to the trend of men and women taking up competitive road and endurance cycling. Helping it to drive market share gains is its expanding Cycle Republic chain; a fifth Cycle Republic store opened in Nottingham in May and further openings are planned across the country.

20150320 Jill McDonald Pic 1

New CEO Jill McDonald (pictured above) also flags robust 5.9% same-store growth in car maintenance, a strong performance in 'Travel Solutions', driven by sales of child safety seats, as well as maintained momentum across Halfords chain of MOT-providing Autocentres.

McDonald is pushing ahead with the 'Getting Into Gear' modernisation strategy initiated by former boss Matt Davies, poached by Tesco (TSCO) earlier this year, a plan she insists 'continues to progress with pace'. For more on the self-help strategy and cash-generative Halfords balance sheet deleveraging and scope for a significant capital return, read our Plays article from May.

Issue Date: 15 Jul 2015