Watches of Switzerland upgrades guidance in parallel with revenue rise

(Alliance News) - Watches of Switzerland Group PLC on Wednesday raised its annual guidance to reflect "the benefit of foreign exchange movements", alongside broad-based sales growth in the first half.

For the six months ended October 30, the Leicester, England-based luxury watch retailer reported revenue of GBP765 million, up 31% from GBP586 million a year prior.

Although tourist sales remained low, domestic clientele drove performance in the UK & Europe, where revenue increased 8.4% to GBP454 million from GBP419 million.

US revenue increased substantially, up 86% to GBP311 million from GBP167 million the previous year.

During the second quarter, Watches of Switzerland continued its investment in showrooms, opening nine in the UK, five in the US, and three in Europe. Of these, five are located in the recently-unveiled Battersea Power Station in London.

Chief Executive Officer Brian Duffy said strong trading was driven by "broad based sales growth" across the company's portfolio of partner brands, as customer demand "continues to exceed supply".

Duffy attributed the extension of client registration lists to consumer responses to "innovative new products, impactful marketing and elevated client service".

Watches of Switzerland was confident that its agile business model, in addition to its portfolio of brand partnerships, would continue to drive long-term sustainable sales growth.

Looking ahead, the company has upgraded its 2023 annual guidance to reflect projected movements in foreign exchange rates.

It now expects revenue between GBP1.50 billion and GBP1.55 billion, raised from its previous guidance of GBP1.45 billion to GBP1.50 billion.

Guidance for adjusted earnings before interest and tax was also raised, and is now expected to be between GBP163 million to GBP175 million, from GBP157 million to GBP169 million.

Total finance costs are expected to be higher at GBP5.5 million, from previous guidance of GBP4.5 million, reflecting higher interest rates.

On a constant currency basis, revenue and adjusted Ebit guidance is unchanged.

Watches of Switzerland shares were trading 0.6% lower at 909.50 pence each in London on Wednesday morning.

By Holly Beveridge; [e-mail]

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