Watches of Switzerland shares soar as it clocks strong sales during pandemic
Watches of Switzerland has raised its full-year expectations after the company saw sales jump 20 per cent over the last quarter, sending shares up almost 23 per cent in morning trading.
Revenue at the luxury watchmaker beat expectations over the 10 weeks to 25 October, hiking 20.2 per cent year on year to £202.7m.
The company said strong UK sales helped offset a 23 per cent slump in tourist-related and airport sales, as international travel remains scant in the wake of the pandemic. The group said it did not expect sales from tourism and travel to improve for the foreseeable future.
Regional sales ticked ahead of London sales for the first time over the 10-week period, after footfall in the capital ground to a halt while retail stores remained shuttered and office staff were told to work from home.
Quarterly sales grew 12.6 per cent year on year to £145.1m, while UK e-commerce sales rocketed 50 per cent over the 10-week period.
Watches of Switzerland also enjoyed a strong performance across the Atlantic, where US sales jumped 43.4 per cent to £57.7m during the quarter. The group now has flagship branches in Las Vegas and New York’s Hudson Yards.
The company, which offers a range of pre-owned and new watches from a selection of high-profile brands, said its luxury watches continued to dominate sales.
Watches of Switzerland ranks as Britain’s biggest retailer of Rolex, Cartier, Omega, TAG Heuer and Breitling watches. An 18ct rose gold watch by Girard Perregaux sold through the company goes for £607,000 alone.
The group raised its full-year guidance to £880m-£910m, up from £840m-£860m at its last trading update, sending shares up 23 per cent to 410p in morning trading.
Analysts at Shore Capital noted: “Our key takeaway is the resilience of the trading performance in the UK given the lack of footfall from tourists and lower airport sales, together with a step on in the US sales.
“Demand for luxury watches continues to outstrip supply. We believe that the shares will go better on the back of upgraded guidance for and we think that the company strategy of selective refits to stores.”
Brian Duffy, chief Executive at Watches of Switzerland, said: “We are very pleased with the strong second quarter performance we are delivering in what continue to be unprecedented market conditions.
“Our guidance for the balance of the fiscal year assumes that the positive trend experienced in the second quarter will be moderated by the impact of pandemic related retail disruption in the UK and the US and uncertainty in the US economy.”
He added: “Looking ahead, we will continue to focus on our strategy by investing in high quality growth through selective capital projects and targeted marketing activity.”
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