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(Alliance News) - Watches of Switzerland Group PLC on Thursday backed its financial guidance as it highlighted signs of an upturn in the UK and strong sales in the US.
Chief Executive Brian Duffy said: "The UK market is starting to show signs of stabilisation. In [financial 2024], UK and Europe sales were down 5% impacted by significant price increases overall at a time of reduced consumer confidence influencing discretionary spending, and we see these pressures easing in [financial 2025]."
Shares in Watches of Switzerland jumped 11% to 441.44 pence in London on Thursday morning.
In the 52 weeks to April 28, pretax profit fell 40% to GBP92.1 million from GBP154.8 million on revenue which was flat at GBP1.54 billion. Basic earnings per share fell 51% to 25.0 pence from 51.2p.
Luxury watches revenue, 87% of the group total, rose 3% at constant currency, and 1% on a reported basis with a particularly strong performance in the US.
Demand for key brands, particularly products on the Registration of Interest lists, continued to be strong and outstripping supply, with consistent additions and conversions, the company said.
Total US sales picked up 6% to GBP692 million from GBP653 million, while UK sales declined 5% to GBP846 million from GBP890 million.
But Luxury jewellery revenue fell 13% in constant currency, and 14% on a reported basis, although there was a sequential improvement through the year with the fourth quarter of the financial year the best performing period.
Watches of Switzerland reiterated guidance for financial 2025 and its Long Range Plan objectives of doubling sales and profit by 2028.
The company forecast revenue of GBP1.67 billion to GBP1.73 billion and an adjusted earnings before interest and tax margin expansion of 0.2 to 0.6 percentage points when compared to financial 2024.
"Following the more challenging trading conditions of [financial 2024], we are cautiously optimistic about trading in [financial 2025]. The industry as a whole is being more conservative on production, which we believe is a responsible approach to the long-term stability of the luxury watch market," the company stated.
By Jeremy Cutler, Alliance News reporter
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