(Bloomberg) -- Halfords Group Plc slid as much as 23%, the most in more than 10 months, after the British automotive and bicycling retailer cut its financial guidance. 

The company lowered its forecast for full-year underlying profit before tax to a peak of £53 million ($67 million), trimming the high end of its guidance from £58 million on Wednesday. The move led house broker Peel Hunt to lower its own estimate for next year’s profit to £50 million.

Halfords, which has almost 650 garages and around 400 stores, said business was volatile during the first half of the year. In the last couple of months there’s been some softening in discretionary big-ticket categories, which has affected sales. 

Customers are particularly being more considered when it comes to purchasing expensive leisure bikes, Chief Executive Officer Graham Stapleton said in a phone interview. Cheaper bikes used for travel and commuting are still selling well, he said.

Bicycle retailers have suffered more broadly, with online brand Wiggle filing for administration last month. 

“Caution required,” analysts at Liberum wrote in response to Halfords results. It may still be difficult for the business to reach the new lowered profit forecast, they said, cutting their view on the stock to “sell” from “hold.”

Stapleton said he was disappointed by the stock reaction, especially given that Halfords reported market-share gains in all its categories. The company will engage with investors in the coming days, he said.

He declined to comment on a recent article in The Telegraph saying that Redde Northgate Plc has made a £1.4 billion merger approach for Halfords.

British consumers, faced with stubbornly high inflation, have been reeling in their spending on non-essentials. The latest figures from the Office for National Statistics show that retail sales unexpectedly fell in October.


(Updates with CEO comments from fourth paragraph.)

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