Watches of Switzerland is upbeat heading into Christmas despite plummeting profits

For the 26 weeks to October 27, 2024, Watches of Switzerland reported a 39% slump in statutory profits before tax to £41m, and a 23% drop in statutory operating profits down to £60m.

Adjusted EBIT dropped 10% to £66m, while adjusted EBIT margins took a 120 basis points hit to 8.4%. Adjusted EBITDA was down 7% to £87m.

Group revenues by contrast were up 4% to £785m on constant currency exchange, driven by 11% growth in US sales to £355m offsetting a 1% dip in the UK and European markets.

The full-year 2025 outlook remained unchanged and, despite the slipping profits, Watches of Switzerland said it is “well positioned for a good holiday trading period, having made an encouraging start in November”.

Chief executive Brian Duffy said: “We are pleased to report H1 FY25 revenue growth of +4% in constant currency1 reflecting an encouraging improvement in trading in Q2, driven by growing demand in the UK and US, and consistent growth in client registration lists, along with the acquisition of Roberto Coin in the period.

“As previously outlined, in Q1 we increased showroom stock levels of key brands to enhance displays and client experience, particularly in the US. With the stock rebuild complete, in Q2 we drove significantly improved US revenue of +24% (constant currency) and revenue in the UK market turned positive. Price increases from brands in the half have been modest, and this has also positively influenced consumer sentiment. Consequently, overall Group revenue increased +11% in Q2, in constant currency.

“Our newly acquired Roberto Coin business in North America has traded strongly since its acquisition and is now making a good contribution to our group. Integration is progressing well, and growth plans are underway. We are also encouraged by the performance of the Rolex Certified Pre-Owned programme and the sustained growth in our overall pre-owned business. Additionally, we acquired Hodinkee, a leading global digital platform for luxury watch enthusiasts, further strengthening our online sector leadership. Integration is progressing in line with our expectations.

“Q3 trading has started encouragingly, and we have continued with our showroom transformation programme. Looking ahead, key showroom openings in H2 include the flagship Rolex boutique in Old Bond Street, London; Audemars Piguet Town House, Manchester; Rolex introduction in Plano, Texas, and a reintroduction in Jacksonville, Florida; and the conversion of Mayors Lenox, Atlanta, to a Rolex mono-brand boutique. Our trading momentum through November, visibility of intake and second-half opening of large showroom investments support our full-year guidance, which is unchanged.

“This year marks the centenary of Watches of Switzerland, celebrated with a number of exclusive products, and we extend our gratitude to our colleagues for their unwavering dedication and exceptional client service throughout the year.”