The Watches of Switzerland Group has reported a 4% increase in revenue, reaching £785 million, in the first half of the year.
- The US market significantly contributed to this growth with a revenue surge of 24%, contrasting a slight decline in the UK and Europe.
- Despite this revenue growth, the company’s adjusted EBIT fell by 9% to £66 million.
- Luxury jewellery sales saw substantial growth, primarily driven by the acquisition of Roberto Coin, while luxury watch sales declined.
- The company remains optimistic about the second half of the fiscal year, bolstered by showroom expansions and enhanced digital presence.
In a year marked by dynamic shifts, Watches of Switzerland experienced a notable 4% year-on-year increase in group revenue, reaching an impressive £785 million. This growth was primarily fuelled by the robust performance in the US market, which witnessed a remarkable 24% rise in sales. In contrast, the UK and European markets reported a slight downturn, with a 1% decline to £430 million.
Chief Executive Brian Duffy remarked on the promising improvement in Q2 trading, attributing it to growing demand in both the UK and US, as well as the strategic acquisition of Roberto Coin. While revenue figures were encouraging, the company faced challenges, including a 9% decline in adjusted EBIT, now standing at £66 million. This drop was largely due to costs associated with acquisitions and integration.
Despite these pressures, the pre-owned watch segment showed resilience, with Rolex Certified Pre-Owned emerging as the second most significant luxury watch brand within the group. The luxury jewellery segment, however, experienced substantial growth, increasing by 104%, again largely credited to the recent acquisition of Roberto Coin, which added £51 million in revenue. Excluding Roberto Coin, luxury jewellery revenue saw a 6% decrease, though the UK market showed signs of recovery.
Looking forward, Watches of Switzerland is optimistic about its prospects for the second half. The company is bolstering its showroom footprint with new locations set to open in major cities like London, Manchester, Texas, and Florida. The integration of Hodinkee is also expected to enhance their online platform, positioning the group favourably for the approaching holiday trading period.
Duffy expressed confidence in the company’s strategic direction, maintaining a full-year revenue forecast between £1.67 billion and £1.73 billion, representing a growth of 9% to 12% in constant currency. The continued momentum in both the US and UK markets, coupled with significant showroom investments, are expected to contribute positively to this outlook.
Watches of Switzerland is poised for continued growth, driven by strategic acquisitions and market expansion, particularly in the US and UK.
