Halfords upbeat despite slowing sales

By Rhys Jones

LONDON (Reuters) - Car parts and bike retailer Halfords Group (HFD.L) said it was confident its half-year results would be in line with expectations, despite like-for-like sales falling in the second quarter.

The retailer, which runs around 450 stores selling spark plugs, car radios and bicycles, said on Thursday quarterly group sales dropped 1.1 percent on a like-for-like basis, though including new stores sales were up 1.5 percent.

The retailer, which accounts for one in three of the bikes sold in Britain, said strong demand for car maintenance and leisure products and commuters switching to bikes to avoid soaring petrol prices were helping it beat a consumer downturn.

"The group's market-leading positions, well-structured balance sheet and strong cash flow see it well positioned in these challenging conditions and I remain encouraged by our prospects for the remainder of the year," Chief Executive David Wild said in a statement.

Cash strapped consumers have been reining in spending in recent months in the face of rising food, energy and mortgage costs as well as a cooling housing market.

Halfords, founded as a local hardware store in Birmingham in 1892, said the defensive characteristics of its car maintenance segment and margin management strategies would likely result in gross margins being ahead of internal expectations.

(Editing by David Holmes)