Watches Of Switzerland Shares Sink 7% Despite Strong Luxury Timepiece Sales

The Watches of Switzerland Group share price reversed on Wednesday following the release of half-year numbers.

At 895.5p per share the FTSE 250 business was last trading 7% lower on the day.

In its update for the six months to October the timepiece retailer said that “trading in the first six weeks of quarter three is in line with our expectations.”

Watches of Switzerland added that its guidance for the financial year remains unchanged. It said that this reflects “[the] current visibility of supply of key brands, announced pricing, and confirmed showroom refurbishments, openings, and closures and excludes uncommitted capital projects and acquisitions.”

The business had upgraded its revenues and earnings guidance back in November.

Sales Jump By Nearly A Third

Revenues at Watches of Switzerland increased 31% in the first half to £765 million, it said. Excluding foreign currency effects they were up a more modest 23%.

In its larger UK and Europe division sales rose 8% year on year to £454 million. Meanwhile revenue growth in the US soared to 86% to push half-year turnover to £311 million.

Total e-commerce sales at the business rose 7% from the same 2021 period.

Watches of Switzerland said that there has been “continued strong demand for luxury watches and jewellery, with growth driven by increases in average selling price and volume.”

As a consequence, pre-tax profits jumped 28% year on year to £83 million.

Store Expansion Continues

Commenting on those first-half results, chief executive Brian Duffy said that “we continue to expand our retail network, opening a total of 20 showrooms across the UK, US and Europe in the first half of financial 2023, and to invest in elevating the luxury experience for our clients through showroom refurbishments.”

He added that “we have an exciting and growing pipeline of new projects,” noting that the business will open its third multi-brand showroom in Manhattan in 2023.

Watches of Switzerland had 24 multi-brand showrooms in the US as of October, up from 19 a year earlier. The number of mono-brand stores increased by nine, to 23.

In the UK the number of multi-brand showrooms dropped to 91 from 98, but its mono-brand estate increased to 46 from 32.

The company meanwhile opened four mono-brand boutiques in Europe and plans to open a further two in the second half. It had zero stores on the continent a year earlier.