Halfords Group PLC (LSE: HFD) shares climbed 13% to 203.76p after the motoring and cycling retailer delivered a standout set of annual results.
The company reported profits ahead of market expectations alongside its strongest gross margin performance in ten years, sending investors rushing to buy the stock.
Gross margin expanded by 210 basis points to 52.8%, reflecting disciplined cost management and a sharper focus on pricing and category strategy across both divisions.
Like-for-like sales rose 4.8% over the 53 weeks to 3 April 2026, with the retail arm up 4.1% and the Autocentres division growing at a faster pace of 5.8%.
Underlying profit before tax increased 4.1% to £45.4 million on a comparable 52-week basis, supported by changes in accounting for acquired intangibles.
Excluding that adjustment, underlying profit grew more than 8% to £41.5 million, underlining the strength of the group’s operational progress during the period.
Halfords credited the results to the “Optimise” phase of its Fit for the Future strategy, which is focused on delivering near-term gains through tighter execution across the business.
The Autocentres division saw operating margins improve by 50 basis points as the company expanded its Fusion garage concept and made gains in labour efficiency.
The retail division also advanced, with Halfords reshaping category management, refining pricing and promotional activity, and testing a range of new in-store initiatives.
Chief executive Henry Birch said the results reflected stronger sales, improved margins and a higher dividend, while noting that the company is still in the early stages of its growth strategy.
The group proposed a final dividend of 6p per share, bringing the full-year payout to 9p and signalling confidence in the sustainability of recent earnings improvements.
Trading across April to June 2026 has been strong, and Halfords now expects full-year underlying profit to land near the top end of market forecasts.
The company said it has not yet observed any impact on consumer behaviour from the recent Middle East conflict, though it warned it remains alert to potential shifts in sentiment later in 2026.
On governance, Halfords confirmed that Jock Lennox, a former EY partner and chartered accountant, will join the board as chair following the September AGM, succeeding Keith Williams.
The leadership transition adds a layer of financial expertise to the board as Halfords pushes further into the next phase of its medium-term growth ambitions.
