Watches of Switzerland H1 statutory profits fall

Swiss watches retailer Watches of Switzerland reported a sharp drop in interim statutory profits on Thursday amid softer consumer sentiment and a repositioning to full-price sales in the US.

Watches of Switzerland reported statutory operating profits of £78.0m for the six months ended 29 October, down 16% on a reported basis.

Adjusted underlying earnings came in at £73.0m, ahead of previous guidance for adjusted EBIT in the range of £70.0m-72.0m but still down 15% year-on-year.

On the other hand, group revenues of £761.0m were up 2% year-on-year at constant currency rates, with continued growth in luxury watches offsetting a reduction in the broader jewellery market.

Group e-commerce sales were 3% lower than last year at constant currency against strong comparatives.

Expansionary capital expenditure rose from £27.0m to £48.0m, with 19 new showrooms opened and seven showrooms refurbished, while the group also swung from a net debt position of £26.0m a year ago to a net cash position of £16.0m at the end of the half.

As of 0915 GMT, Watches of Switzerland shares were down 3.36% at 633.45p.

Reporting by Iain Gilbert at Sharecast.com