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The Watches of Switzerland Group has reported H1 revenues were relatively flat at £761m as it faced a “reduction in the broader jewellery market reflecting temporary softer consumer sentiment and a repositioning to full price sales in the US”.
The performance comes despite “continued strong momentum in the US” with revenues of £328m (H1 FY23: £311m), +11% at constant currency, +5% at reported rates
However, it revealed that UK and Europe performance was driven by domestic clientele, with revenue of £433m (H1 FY23: £454m), down 4% vs H1 FY23.
It said Q1 FY24 was impacted by the “unwinding of the benefit of product intake in Q4 FY23”, which meant Q1 FY24 revenue was down -8% vs the prior year. Revenue in Q2 FY24 was flat on prior year, with several high turnover Goldsmiths and Mappin and Webb showrooms closed for upgrade during the period and trading out of pop-ups.
The group also confirmed adjusted EBIT margin 9.6% and statutory operating profit of £78m, down 16% on a reported basis, compared with £93m the prior year.
CEO Brian Duffy said: “Our good half performance reflects the Group’s growing leadership position in our chosen markets as the strength of our longstanding brand partnerships and our proven business model continue to drive our performance forward. We are particularly pleased with performance in the US, where we grew revenue +11% in the period, and the US now comprises 43% of group revenue.
“The consumer environment in the UK continues to be more challenging and UK and Europe revenue was -4% in the period, impacted by the timing of product intake in Q1 FY24 and temporary showroom closures for refurbishment. We have expanded our retail network at pace in the first half, opening a total of 19 showrooms globally, whilst investing in elevating the luxury experience for our clients through significant refurbishments across seven showrooms.”
He added: “…Looking ahead, we are well positioned for a good holiday trading period as we present our clients with our strongest ever range of luxury watches and luxury branded jewellery. We remain on track to deliver full year guidance, with our confidence for H2 underpinned by the reopening of several high revenue showrooms which were closed for upgrade in H1.
“Looking further ahead, we are confident in our Long Range Plan objectives of doubling sales and profit by 2028 through capitalising on our leading market positions and the unique growth opportunities available to us as the world’s largest luxury watch retailer.”
