Halfords' shares have seen a significant increase, rising by 75% since May 1. This comes as the company, under new CEO Henry Birch, implements a turnaround strategy focusing on car repair and maintenance services.
The strategic shift appears to be yielding results, with Halfords reporting a comfortable profit in the year to April 2026, a reversal from the pre-tax loss recorded in the previous year. Like-for-like sales are growing, and gross margins have improved, leading Halfords to upgrade its profit guidance for the next year.
Birch's strategy involves boosting margins through cost control and improving the digital platform for customer bookings and plans. The focus on car services, which now comprise around 80% of sales, is seen as a move towards a more resilient business model, as essential car repairs are less likely to be delayed by economic cycles compared to accessory purchases.
Despite the recent share performance and strategic progress, Halfords' share price remains 50% down from its record peak in May 2021. The stock's valuation is currently at 12 times 2028 earnings and offers a dividend yield of 4.4%.