Shares in luxury timepiece seller Watches of Switzerland (WOSG) surged more than 11% to an all-time high £12.60 after the FTSE 250 company upgraded its full year outlook once again and insisted it is well stocked for the vital Christmas run-in.
The upgrade followed a forecast-beating first half performance from the UK’s largest luxury watch retailer. It also unveiled a deal to acquire five stores in four new states in the US, further advancing its expansion across the pond.
SUSTAINED STRONG DEMAND
Watches of Switzerland put in an impressive performance in the half to October 2021, driven by broad-based growth in the UK and the US against both last year and the pre-pandemic period two years ago.
Amid buoyant demand for high-end watches and jewellery, group sales came in at £586.2 million, 44.6% ahead year-on-year and 40.8% higher than the comparable period in full year 2020.
The company delivered a good second quarter performance in the face of a demanding prior year comparable, while first half e-commerce sales ticked up 28.7% year-on-year, despite the group’s brick and mortar stores having fully reopened in the half.
UPSIDE STATESIDE
Watches of Switzerland has also agreed to buy five new stores, with combined annual revenue of roughly $100 million, in a deal which will expand its US store network to 36 stores in 12 states.
As a result of the formidable first half performance and factoring in the store acquisitions, Watches of Switzerland raised its full year sales guidance to a £1.15 billion-to-£1.2 billion range, up from previous guidance of between £1.05 billion and £1.1 billion.
The company also upgraded its annual EBITDA margin guidance to a year-on-year improvement of between 1% and 1.5%, that’s up from previous guidance of flat to 0.5% growth.
CEO Brian Duffy (pictured above) said: ‘Over the last two years, we have demonstrated the versatility of our multi-channel model with a more than doubling of sales to domestic clients and within this half year, a significant change in brand mix.
‘The strength of our performance, both in our well-established UK business and in our growing US business, coupled with our confidence in the luxury watch and jewellery categories has led us to upgrade our guidance for the full year.
‘We are well stocked for the holiday period and look forward to providing an exceptional shopping experience for our customers.’
