UK's Halfords lifts profit outlook as summer weather boosts cycling, camping sales

Aug 27 (Reuters) - Britain's Halfords forecast annual profit ahead of market expectations on Thursday as warm weather drove sales of its bicycles, camping gear and outdoor equipment, sending shares 12% higher.

Shares in the London-listed firm, which sells everything from mountain bikes to motor parts, camping equipment and cool boxes, jumped nearly 12% to a more than four-year high.

British retailers have benefited from consumers snapping up new clothing, outdoor products and air-conditioners amid an unusually warm summer this year even as they grapple with rising costs arising from the Iran war.

"It was a live discussion amongst investors whether or not this summer’s scorching sunshine was a plus or a minus for the sector," said Peel Hunt analyst Jonathan Pritchard. "The jury is probably still out on the wider industry, but Halfords has made hay over the last couple of months."

Under CEO Henry Birch, Halfords has over the past year tried to turn around the business by focussing on pricing, growing its motor services arm and expanding into the growing higher-margin e-bikes market.

In June, the retailer had guided annual profit at the top end of market view as it benefited from wider margins and sales growth.

The heightened seasonal demand has resulted in incremental profit in the mid-single digit millions of pounds, Halfords said.

The firm now expects profit before tax of between £55 million and £65 million ($74.7 million to $88.32 million) for the year ending April 2027, ahead of company-provided analyst expectations of £52.6 million.

($1 = 0.7360 pounds)

(Reporting by Prerna Bedi in Bengaluru; Editing by Mrigank Dhaniwala)