Watches of Switzerland (LSE: WOSG) unveiled an optimistic outlook on Tuesday, underlining burgeoning prospects across the UK, US, and European markets as it reported a commendable performance in the second quarter.
The retailer, celebrated for its premium Swiss timepieces, saw a notable surge in its shares, marking a substantial 10.6% increase to £576.00 per share during Tuesday morning trading.
In its financial statement, the company declared that its second-quarter revenue, covering the period up to October 29, had ascended by approximately 1.3%, reaching £379 million from a previous £374 million. This achievement underscores the enduring appeal of luxury watches in the market, with demand remaining remarkably robust.
Over the course of the first half-year, the company’s total revenue displayed resilience, despite headwinds, experiencing a modest dip of roughly 0.5% year-on-year, culminating in £761 million.
Of particular interest is the performance of Watches of Switzerland in the United States, where revenues demonstrated a robust ascent of 4% year-on-year, surging to £165 million. Meanwhile, revenue figures in the UK and Europe mirrored those of the previous year, stabilizing at £214 million.
Going forward the company maintains a sanguine perspective, forecasting full-year revenue growth of 8% to 11% at constant currency rates.
Reflecting on the broader trajectory, Watches of Switzerland proudly shared their remarkable journey from fiscal year 2015 to 2023, marked by a striking compound annual growth rate (CAGR) of 19% for revenue. Their adjusted earnings before interest and tax (EBIT) witnessed a staggering CAGR increase of 44%.
In a forward-looking stance, spanning from fiscal year 2023 to fiscal year 2028, the company articulated ambitious goals, targeting an impressive sales surge, more than doubling from the 2023 baseline of £1.54 billion. This exponential growth is poised to be primarily driven by the exceptional performance of their UK and US operations, which are notably outpacing the market. Anticipating substantial gains, Watches of Switzerland envisions a CAGR growth of 20% to 25% for US revenue and 8% to 10% for UK revenue until fiscal year 2028. Additionally, they foresee Europe accounting for 4% to 6% of group sales in fiscal year 2028.
Brian Duffy, the Chief Executive Officer, offered his insight on the promising prospects, stating, “Today’s long-range plan demonstrates our confidence in more than doubling our sales and profits from FY23 to FY28, aiming to surpass the milestone of £3 billion in revenue whilst driving operational leverage and accelerating new showroom projects and mergers & acquisitions activity.”