Sunday, December 22, 2024

Watches of Switzerland sales hit by ‘minimal return’ of tourist shopping

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The luxury watches retailer saw total sales remain flat on a reported basis at £1.5bn in the 52 weeks ending April 28, 2024. On a constant currency basis, sales grew 2% in the same period.

Sales in the US grew 6% to £846m, while sales in the UK and Europe dropped 5% to £846m “impacted by macroeconomic conditions in the UK”.

The retailer said it expects adjusted EBIT to be between £133m and £136m for the same period, compared to £165m in 2023.

Watches of Switzerland said its performance in the UK “continues to be driven by domestic clientele with minimal return of tourist spending due to the lack of VAT-free shopping”.

The retailer said it is cautiously optimistic about trading in 2025 as it set a revenue goal of between £1.67bn and £1.73bn, representing growth in the range of 9% to 12% at constant currency.

Chief executive Brian Duffy said: “We finished the year strongly, with Q4 sales in line with guidance and ahead of consensus. Particularly pleasing was the performance in the US, with sales up 14% in the period.

“We are confident that our strategy, exceptional client service and strong brand relationships enable us to continue to drive growth and gain market share.”

He added: “We enter FY25 with cautious optimism. We have a terrific programme of showroom developments on both sides of the Atlantic with the Rolex flagship boutique on Old Bond Street, London; a 3,000 sq. ft Rolex boutique replacing the Mayors multibrand [store] in Atlanta, Georgia; and our first Rolex showroom in Texas in Plano. We are also looking forward to the Audemars Piguet Town House and the Mappin & Webb luxury jewellery showroom, both in Manchester, and the expanded Patek Philippe space in Greenwich, Connecticut.

“The inherent strength of the categories we operate in, coupled with our superior business model and retail expertise, continues to set us apart. We remain focused on executing our long-range plan and are committed to the targets to more than double sales and adjusted EBIT by the end of FY28.”

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