- Watches of Switzerland Group
- 27 June 2024 12:33:19
Source: Sharecast
Pre-tax profit for the year to April 28 fell 40% to £92m with revenues flat at £1.53bn in a “challenging” market hit by rising prices from manufacturers, the strength of the Swiss franc and low consumer confidence.
Chief executive Brian Duffy said pre-owned watches presented a “significant opportunity” for the company with second-hand luxury watch sales doubling year-on-year in the final quarter of the 2024 financial year.
“Within this category, the new Rolex certified pre-owned programme is performing ahead of our expectations in both the US and UK and is set for further roll-out in full-year 2025 with improved methods of supply in the UK,” he said.
UK and Europe revenue fell 5% to £846m impacted by macroeconomic conditions in the UK and a minimal return of tourist spending due to lack of VAT free shopping, the company said. It was a brighter picture in the US, where sales rose 6% to £692m.
“Following the more challenging trading conditions of full-year 2024, we are cautiously optimistic about trading in full-year 2025. The industry as a whole is being more conservative on production, which we believe is a responsible approach to the long-term stability of the luxury watch market.”
WoS full-year guidance forecasts revenue of between £1.67bn - £1.73bn, reflecting constant currency sales growth of 9% - 12%. Adjusted earnings before interest and tax margins are expected to grow by 0.2 to 0.6 percentage points from last year.
The company also expanded into the high-end jewellery market last year with the purchase of Roberto Coin in the US for $130m.
“Watches of Switzerland was in demand with investors after saying the UK market was starting to stabilise. The company has been through a difficult period as growth moderated and cracks appeared in the luxury goods sector despite people previously thinking wealthier individuals would be immune to the cost-of-living crisis," said AJ Bell investment director Russ Mould.
"The absence of any more bad news was good enough to prompt a reassessment of the business by the market, hence a strong share price reaction to the results."
Reporting by Frank Prenesti for Sharecast.com
