Halfords Group PLC (LSE:HFD) saw its shares climb 13% to 203.76p after the retailer posted profits ahead of expectations and reported its strongest gross margin in a decade.
The motoring and cycling business delivered a 4.8% rise in like-for-like sales over the 53 weeks to 3 April 2026, with retail up 4.1% and its Autocentres division increasing 5.8%.
Gross margin expanded by 210 basis points to 52.8%, the highest in ten years, helping to offset higher operating costs.
Underlying profit before tax rose 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 increased more than 8% to £41.5 million.
The company said performance was driven by progress in the “Optimise” phase of its Fit for the Future strategy, aimed at delivering near-term gains through tighter execution.
In Autocentres, operating margins improved by 50 basis points as Halfords expanded its Fusion garage concept and improved labour efficiency. The retail division also made progress, reshaping category management, refining pricing and promotions, and testing new in-store initiatives.
Halfords proposed a final dividend of 6p, taking the total payout for the year up to 9p.
Looking ahead, the group said trading across April to June had been strong and expects full-year underlying profit to land near the top end of market forecasts.
While it has not yet seen any impact on consumer behaviour from the recent Middle East conflict, it warned it remains alert to potential shifts in sentiment later in 2026.
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 also confirmed that Jock Lennox, a former EY partner and chartered accountant, will join the board as chair after the September AGM, succeeding Keith Williams.
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