Watches of Switzerland reports 5.9% increase in revenues in Q1 results

Watches of Switzerland has reported a 5.9% increase in group revenues to £819.3m in the year to 26 April, ahead of recently revised guidance.

In the 46 weeks to 15 March 2020, group revenue increased by 15.8% across both the UK, which was up by 9.4% and the US, which increased by 36.4%. This was driven by a 19.3% increase in luxury watches.

The group also reported a 9.3% increase in like-for-like sales.

Across the full 52-week period, UK sales increased by 0.6% to £591.6m compared with £588.2m in the same period last year and US sales were up by 22.9% to £227.7m compared with £185.3m in 2019.

Watches of Switzerland said Covid-19 related closures of all stores in the UK and US have “impacted momentum” in the final six weeks of the year, although its e-commerce channel saw a 45.8% increase in sales.

The group said it expects pre-IFRS 16 EBITDA to come in at between £75m and £78m as it has “further strengthened” its liquidity position with new financing arrangements. 

The group also revealed it has entered into a new £45m facility agreement as part of the government Coronavirus Large Business Interruption Loan Scheme, which has a maturity of November 2021.

Brian Duffy, Watches of Switzerland CEO, said: “Prior to the Covid-19 pandemic, the group had been on track to deliver double-digit sales growth, reflecting our strong brand partnerships, favourable market conditions and accelerating momentum in the US.

“Despite the current challenges, demand for luxury watches has remained strong with online sales performance ahead of our expectations.  Through our longstanding partnerships with the most prestigious Swiss watch brands, we have further enhanced the online customer experience with the introduction of additional brands which we had previously only transacted in our stores.”