Halfords Group PLC (LSE: HFD) shares surged as much as 13.9% to an intraday high of 274.5p on Thursday after the motoring and cycling retailer lifted its profit outlook.
The strong move followed an upgrade to full-year profit expectations, with the stock later settling up 11.6% at 269p, compared with Wednesday’s close of 241p.
Halfords now expects underlying profit before tax of between £55 million and £65 million for the current financial year, comfortably ahead of market consensus of £52.6 million.
At the £60 million midpoint, the new guidance sits around 14% above consensus and 11% ahead of broker Panmure Liberum’s previous forecast of £54 million.
Panmure Liberum, which carries a Buy recommendation and a 260p price target on the stock, described the trading update as “clearly positive.”
The broker sees meaningful scope for earnings forecasts to move higher following the guidance upgrade, adding further optimism to an already bullish outlook on the stock.
Trading has remained strong following an encouraging end to the previous year, supported by continued underlying momentum and particularly strong seasonal demand during unusually warm summer weather.
Halfords estimates the weather-related boost generated incremental profit in the mid-single-digit millions of pounds during the period.
Panmure Liberum calculates that the weather tailwind accounts for roughly two-thirds of the upgrade at the midpoint, meaning the improvement is not solely weather-driven and reflects genuine operational progress.
The broker also pointed to improving like-for-like sales and margins exiting the previous year, when group comparable sales rose 4.8% and gross margin expanded by 210 basis points.
Looking further ahead, Panmure Liberum expects additional benefits from remaining Fusion garage conversions, modest cycling growth, and the rollout of lessons learned from Fusion across the wider Autocentres estate.
Halfords has indicated that profit will be more heavily weighted towards the first half of the year as it accelerates investment in technology and marketing in the second half.
The combination of strong seasonal trading, operational momentum, and a bullish broker stance has reinforced confidence among investors tracking the retailer’s ongoing turnaround strategy.
