Watches of Switzerland Group LON:WOSG, the UK-based retailer of high end luxury watches and jewellery’s CEO, Brian Duffy, said in a call at the release of its first quarter results in August that it was confident that its clientele would spend their way out of a recession.
Duffy knows his clients well. In its latest trading update, WOSG reported an increase in group revenue, of 23% to GBP765m when compared to 1H22 on a constant currency basis, and a 31% increase on a reported currency basis. The biggest contributor was luxury watches (unsurprising for a company called Watches of Switzerland) which saw a 31% increase to GBP667m and made up 87% of total revenue. Luxury jewellery sales were up 38% to GBP56m.
Duffy said in a statement: “Demand remained strong through the quarter and continues to exceed supply, with client registration lists extending as consumers respond to innovative new products, impactful marketing and elevated client service.”
The company opened five new showrooms in the first half of the year, including one outlet at the Battersea Power Station development where, said Duffy: “…we continue to invest to elevate the luxury experience for our clients”.
Watches of Switzerland US Expansion
In August Duffy highlighted the expansion that WOSG had made into the US market, having opened new outlets in New Jersey and Atlanta, this was followed up by: “…five US mono-brand boutique openings including TAG Heuer and Breitling boutiques in Boca Raton, Florida.”
The US saw continued strong momentum with revenue of GBP311m, up from GBP167m in 1H22 a 60% jump on a constant currency basis, or a 86% increase at reported rates with revenue growth excluding acquisitions 44% at constant currency.However, earnings were quite flat, with a 0.5% increase on an adjusted EBITDA basis. This remained within guidance of GBP157m to GBP169m at GBP163m to GBP175m. On the downside finance costs increased by GBP1m above guidance of GBP4.4m due to increased interest rates. Duffy also highlighted that tourist sales remain very low, but there has been consistent performance improvement at airports throughout the quarter and warned of “the potential for more challenging market conditions in the second half.”
WOSG closed play on 9th November at 917p, down from 925p at the start of trading. The FTSE250 company has offered a year-to-date return of -35.4% and a one-year return of -29.7% with shares ranging between 632.5p and 1,600p over a 52-week period, giving the company a market cap of GBP2.2bn
