Luxury timepiece retailer Watches of Switzerland announced its financial results for the year ended April 28, highlighting a 40% decline in pre-tax profit to £92 million amidst challenging market conditions.
Despite flat revenues of £1.53 billion, CEO Brian Duffy expressed cautious optimism, citing opportunities in the pre-owned luxury watch segment. He noted a significant uptick in second-hand watch sales, particularly with the success of the new Rolex certified pre-owned program in the US and UK, which is set for further expansion in fiscal year 2025.
Revenue in the UK and Europe fell by 5% to £846 million, attributed to macroeconomic challenges and reduced tourist spending due to the absence of VAT-free shopping. Conversely, sales in the US increased by 6% to £692 million, indicating a more positive performance in that market.
Looking ahead to fiscal year 2025, Watches of Switzerland anticipates revenue between £1.67 billion and £1.73 billion, reflecting a projected constant currency sales growth of 9% to 12%. The company also expects adjusted earnings before interest and tax margins to improve by 0.2 to 0.6 percentage points compared to the previous year.
CEO Brian Duffy emphasized a cautious approach amid industry-wide production conservatism, which he believes is crucial for the long-term stability of the luxury watch market.
This outlook positions Watches of Switzerland with a measured optimism as it navigates through evolving market dynamics in the luxury timepiece sector.
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