Shares in Halfords declined by around 8.3 percent following the company’s announcement that planned investments would pressure profitability in the second half of the financial year. Despite this, the British retailer, which specializes in bicycles, car parts, and automotive servicing, maintained its forecast for full-year underlying pre-tax profits of between £55 million and £65 million.

The company reported strong sales growth during the first half of the year, with like-for-like sales rising 7.1 percent for the six months ending October 2 compared to the previous year. The summer’s unusually warm weather played a key role in boosting demand for seasonal products such as bicycles, camping equipment, and cool boxes.

Halfords’ cycling segment experienced an 8.3 percent increase in sales, while the motoring division saw a 7.3 percent rise. Overall retail sales grew by 7.7 percent, supported also by a 6.1 percent increase in the company’s car servicing and repair operations. The retailer operates 367 Halfords stores, two performance cycling outlets, and nearly 500 garages across the United Kingdom.

Chief Executive Henry Birch acknowledged that profitability would be weighted towards the first half of the year, attributing the expected second-half margin squeeze to increased spending on marketing and technology initiatives. “We move into the second half with confidence and look forward to sharing more detail on our progress at our interim results announcement later next month,” Birch said.

Investor reaction was mixed, with shares falling by as much as 10 percent at one point after the company chose not to revise its full-year profit guidance upward despite the strong revenue growth. Prior to the update, shares had reached a five-year high, reflecting optimism about the impact of the hot summer sales.

Analysts have noted that Halfords’ strategic transformation plan, which focuses on pricing strategies, expanding the motoring services business, and increasing the supply of higher-margin e-bikes, is encouraging. However, uncertainty around the upcoming government budget and broader macroeconomic factors, including rising energy costs and inflationary pressures, may weigh on consumer spending in the second half of the financial year.

Interim results are scheduled for release on November 26, when the company is expected to provide further details on its financial performance and outlook.