Halfords shares jumped 12% to 268.85 pence on Friday, marking the highest level since March 2022, as the UK motoring and cycling retailer raised its FY27 profit forecast and reported solid FY26 results.
The company now expects underlying profit before tax of £55 million to £65 million for the fiscal year ending March 2027, exceeding the prior consensus of £52.6 million and the £48.9 million to £55.1 million range. The upgraded guidance follows a 4.8% increase in like-for-like sales and a 210 basis-point expansion in gross margin during FY26, which delivered underlying profit before tax of £45.4 million.
Halfords attributed the improved outlook to strong performance across its core categories, including cycling and outdoor products, supported by unusually warm summer weather that boosted demand. The weather-related uplift is estimated to contribute mid-single-digit millions of pounds to FY27 profit. The company also noted momentum in its service-led earnings model under its "Fit for the Future" strategy.
FY26 free cash flow reached £25.3 million, while net cash at year-end stood at £19.1 million. The shares outperformed the FTSE 250 index, which remained largely flat, as Halfords joined the index on August 4.
Analysts highlighted the company's strategic focus on technology and marketing spend, which is expected to shift earnings weighting toward the first half of FY27, with second-half investments likely to temper margins temporarily.
