Watches of Switzerland records flat sales growth, profit drops

Watches of Switzerland revenues for the first six months of 2024 reached 761 million pounds, up 2 percent at constant currency and flat at reported rates.

The company said in a statement that it witnessed continued growth in luxury watches with the reduction in the broader jewellery market reflecting temporary softer consumer sentiment and a repositioning to full price sales in the US.

"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. 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,” said Brian Duffy, the company’s chief executive officer.

Sales in the UK and Europe declined by 4 percent to 433 million pounds, while sales in the US increased by 5 percent or 11 percent constant currency to 328 million pounds.

The results meant that Watches of Switzerland posted a year-on-year pre-tax profit decline of 20% to £67 million.Group ecommerce sales were down 3 percent on last year at constant currency. Adjusted EBIT of 73 million pounds, declined 15 percent on a reported basis, while adjusted EBIT margin dropped to 9.6 percent.

“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," added Duffy.

For the year ahead, the company forecasts revenue in the range of 1.65 to 1.70 billion pounds, growth of 8 to 11 percent at constant currency, and adjusted EBIT margin in line with 2023.