Halfords beats profit forecast as Fusion motoring strategy drives growth
Halfords has reported a better-than-expected performance for the year as its motoring-first strategy continues to gain traction
Halfords has reported a better-than-expected performance for the year as its motoring-first strategy continues to gain traction and its Fusion rollout begins to pay off.
The motoring and cycling retailer saw underlying profit before tax rise 6.4% to £38.4m for the 52 weeks to 28 March 2025, coming in above its previously guided range of £32m to £37m.Group like-for-like sales increased 2.5%.
Motoring, which now accounts for around 80% of sales, remains the core focus for the business.
Halfords said it made “significant progress” on its Fusion strategy — which integrates its retail and autocentre operations within towns — with 50 locations now up and running.
The retailer expects Fusion locations to double garage-level profitability at maturity, with an average payback period of around two years.
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Membership of its loyalty scheme, Halfords Motoring Club, has also passed the 5 million mark, as customers respond to the offer’s value. Elsewhere, cycling sales grew 1.7% year-on-year.
Chief executive Henry Birch, who took the reins in April, said: “I am very pleased to be announcing a positive set of results for Halfords. The business has delivered a strong financial performance, made good strategic progress and has a clear plan in place to tackle external inflationary forces.
“Halfords has a unique combination of retail stores, garages and mobile vans, a trusted brand, scaled omnichannel infrastructure, and access to valuable proprietary data. It is an exciting time to be joining and I see significant potential to optimise and grow this fantastic business.”
Gross margin improved by 2.5 percentage points to 50.7% as the group benefited from “Better Buying”, pricing optimisation, a shift to higher-margin services and favourable currency hedges.
Halfords delivered £35m in cost savings — helping to offset around £33m in inflation, largely tied to labour costs following the national minimum wage rise — and generated £43m in free cashflow. It ended the year with net cash of £10.1m, compared to net debt of £8.1m the year prior.
Looking ahead, it said trading in the early weeks of FY26 has been in line with expectations. It plans to roll out 60 more Fusion sites this year, with the remainder of its 150-site target to be completed in FY27.
The business said it remains cautious about consumer spending and will continue investing in its digital customer experience, contact centre technology and leadership capabilities to drive future growth.
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