Halfords Chief Executive David Wild is on his bike leaving the non-executive Chairman Dennis Millard in charge of the shop while the struggling seller of bikes and car parts looks for a replacement.
The abrupt departure followed a series of profit warnings from the retailer, which has again lowered profits guidance.
The market had been expecting Halfords to achieve profit before tax of £75m in the year to March 31st, 2013, but the group has indicated that profits are likely to be in the range of £62m to £70m, as it expects like-for-like sales comparisons to be negative - or at best flat - for the remainder of the financial year.
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The gloomy outlook statement came after a miserable first quarter which saw like-for-like (LFL) sales at the group tumble 5.6% from a year earlier in the 13 weeks to June 29th.
Total revenue for the group in the period was down 5.2% year-on-year (y/y), despite the recently acquired Autocentres business (formerly Nationwide Autocentres) growing revenues by 14.5% y/y, or by 9.2% on a LFL basis.
Revenue at the Halfords retail estate was down 7.8% y/y, with LFL sales down 7.5%. The car maintenance business held up well, with LFL sales up 1.0% on a year earlier, but LFL sales in the car enhancement and leisure divisions both declined 10.5% y/y.
The main consolation for long suffering shareholders is that after making a terrible start to the new financial year - LFL sales were down 12.4% in the first eight weeks of the period - LFL sales in the five weeks to June 29th were up 0.9% y/y. There was also some cheer on the Internet-side of the business, with online revenues up 13.0% from a year earlier.
Gross margins and costs in the first quarter were in line with management expectations.
Looking ahead, the group's planning assumptions now reflect continuing negative Retail (i.e. excluding the Autocentres business) LFL sales in the remainder of the first half, with second-half Retail LFLs likely to be flat to mid-single-digit negative. Previous guidance on Retail margins and costs and on Autocentres' profit growth is broadly unchanged.
The group said it was confident it would enjoy "healthy underlying cash flows" while it implemented its turnaround plan.
Dennis Millard, interim Executive Chairman, commented: "The consumer environment remains difficult and the unseasonal weather conditions this quarter had a direct impact on sales of cycles and outdoor leisure products. In this challenging economic environment the management team will be focused on maximising our trading performance and cash generation, prudent cost management and delivering the longer term strategy outlined to shareholders in May 2012."
Millard gave the usual thanks for the service of now departed Chief Executive David Wild, but said the time was right for a change of leadership.
Millard will revert to a non-executive role once a replacement for Wild has been found, though the group warned that the search could take a number of months.
JH
