Wednesday, February 28, 2024

Profits dip at Watches of Switzerland Group

Watches of Switzerland Group has seen a 20% dip in pre-tax profits in its first half, while revenue has also witnessed a small decline.

According to results for the 26 weeks to 29 October 2023 (H1 FY24), group revenue sat at £761 million, down from £765 million in the same period of the year prior.

While the Leicester business saw strong momentum in the US with a 5% increase in revenue to £328 million, revenue in the UK and Europe was down 4% at £433 million, in part due to a more challenging consumer environment in the UK, and several high turnover showrooms being closed for upgrade during the period.

Statutory profit before tax, meanwhile, declined to £67m from £83m.

Keeping positive, Brian Duffy, Chief Executive Officer, said: “Our good first half performance reflects the Group’s growing leadership position in our chosen markets as the strength of our longstanding brand partnerships and our proven business model continue to drive our performance forward.

“We are particularly pleased with performance in the US, where we grew revenue +11% in the period, and the US now comprises 43% of Group revenue. The consumer environment in the UK continues to be more challenging and UK and Europe revenue was -4% in the period, impacted by the timing of product intake in Q1 FY24 and temporary showroom closures for refurbishment.

“We have expanded our retail network at pace in the first half, opening a total of 19 showrooms globally, whilst investing in elevating the luxury experience for our clients through significant refurbishments across seven showrooms.

“We were also delighted to complete the acquisition of selected luxury showrooms from Ernest Jones in November 2023. Looking ahead into the balance of the financial year, we will integrate the Ernest Jones portfolio and continue to deliver on our exciting pipeline of new projects. 

“Demand dynamics remain strong, and our client registration lists continue to grow, whilst the pre-owned market remains a significant opportunity. We are encouraged by the early performance of the Rolex Certified Pre-Owned programme following its launch in the first half in both the US and UK. We will continue to expand the number of showrooms to meet demand for all pre-owned luxury watches and are excited by the growth potential in this category.

“Looking ahead, we are well positioned for a good holiday trading period as we present our clients with our strongest ever range of luxury watches and luxury branded jewellery. We remain on track to deliver full year guidance, with our confidence for H2 underpinned by the reopening of several high revenue showrooms which were closed for upgrade in H1. 

“Looking further ahead, we are confident in our Long Range Plan objectives of doubling sales and profit by 2028 through capitalising on our leading market positions and the unique growth opportunities available to us as the world’s largest luxury watch retailer.”

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