Watches of Switzerland hails record FY revenue but warns of Q1 sales drop

Watches of Switzerland hailed a "strong" full-year performance in line with guidance on Wednesday, as it reported record revenue and profitability but warned of an expected sales decline in the first quarter.

In an update for the year to 30 April, the luxury watch retailer said group revenue rose 25% to £1.5bn, while adjusted pre-IFRS 16 earnings before interest and tax are expected to be between £163m and £167m, up from £130m a year earlier.

US revenue rose 52% to £653m, while the UK and Europe saw a 10% jump to £890m.

Luxury watch revenue was up 28%, driven by rise in average selling price and volume, while luxury jewellery revenue was 10% higher.

In the fourth quarter, group revenue rose 22% to £371m.

The company also said that due to product intake timing, which supported the final quarter of FY23, and strong prior year comparatives, it expects a "modest" sales decline in Q1 FY24 before a normalisation in the second quarter.

Chief executive Brian Duffy said: "Although, as expected, the second half of FY23 saw a more challenging trading environment, demand remains strong and continues to exceed supply, with client registration lists continuing to grow."

Watches said its FY24 guidance assumes revenue growth of 8% to 11% at constant currency, with EBIT margin in line with the prior year.