Shares surge amid rising US demand for Watches of Switzerland
- Watches of Switzerland revealed a 4% revenue growth to £785 million for the first half of fiscal year 2025.
- Sales in the US surged by 11%, while UK and European revenues dipped slightly by 1%.
- The company's confidence is reflected in its unchanged full-year guidance and a 5.9% increase in shares following the news.
In the United Kingdom, Watches of Switzerland has recently demonstrated a notable boost in sales largely driven by strong demand for luxury timepieces in the US market. For the half-year period ending on October 27, group revenues increased by 4%, totaling £785 million. This growth trajectory was notably supported by a robust second quarter performance. The US segment recorded particularly impressive results with revenue soaring by 11%, reaching £355 million as a consequence of a stock rebuild initiative that proved successful. Conversely, the UK and Europe experienced a slight downturn with revenues declining by 1% to £430 million, though recent months have shown increasing demand in the UK, suggesting a potential recovery. Brian Duffy, the chief executive of Watches of Switzerland, expressed optimism regarding the trading momentum as they move further into the current quarter, continuing with their planned showroom investment and opening strategy. This positive outlook is reinforced by ongoing enhancements to their client registration lists along with strategic acquisitions, such as that of the jewelry brand Roberto Coin. Future showroom openings in the latter half of the fiscal year include significant establishments such as a flagship Rolex boutique located on Old Bond Street in London, and new Audemars Piguet and Rolex showrooms in Manchester, Texas, and Florida. These developments are expected to sustain revenue streams and positively impact the company's financial performance moving forward. The firm's trading visibility through November and established plans for showroom investments have enabled them to maintain their full-year guidance without revisions, signaling confidence in their operational strategies and market positioning. On Thursday morning, following the announcement of these financial updates, shares of Watches of Switzerland rose by 5.9%, indicating positive market reception to their growth figures and projections. Overall, the company appears to be strategically navigating the challenges of a fluctuating European market while capitalizing on the stronger US demand, positioning itself well for continued growth in the luxury sector.