Shares in Halfords Group PLC (LSE:HFD) jumped 13% to 203.76p after the motoring and cycling retailer delivered a stronger-than-expected profit alongside its best gross margin in ten years.
Group sales grew 4.8% on a like-for-like basis across the 53-week period ending 3 April 2026, demonstrating broad-based momentum across the business.
The retail division posted like-for-like growth of 4.1%, while the Autocentres servicing arm delivered a solid 5.8% increase over the same period.
Gross margin expanded by 210 basis points to 52.8%, reaching its highest level in a decade and more than offsetting an anticipated rise in operating costs.
Underlying profit before tax rose 4.1% to £45.4 million on a comparable 52-week basis, reflecting a change in the accounting treatment of acquired intangibles.
Stripping out that accounting change, underlying profit grew by more than 8% to £41.5 million, underscoring the strength of the underlying business performance.
The company credited the improvement to the “Optimise” phase of its Fit for the Future strategy, which is designed to build near-term value through disciplined execution.
Within Autocentres, operating margin improved by 50 basis points as Halfords rolled out its Fusion garage concept and drove labour efficiencies across the network.
The retail division also made meaningful progress by reviewing pricing and promotions and launching in-store trials as part of a new category management approach.
The board recommended a final dividend of 6 pence per share, lifting the full-year total by 0.2 pence to 9 pence for shareholders.
Trading through April, May, and June has been described as strong, and Halfords now expects underlying profit for the current year to come in around the top of the consensus range.
The company said it had not yet observed any change in customer behaviour stemming from recent conflict in the Middle East, though it remains alert to potential impacts on consumer sentiment in the second half of 2026.
Chief executive Henry Birch said the results reflected good sales growth, higher margins and an increased dividend, but cautioned that it was early in the growth strategy with much still to do.
Halfords also confirmed that Jock Lennox, a chartered accountant and former EY partner, will join the board as chair following the annual meeting in September, succeeding Keith Williams.
