Watches of Switzerland Shares Jump as Q2 Momentum Boosts H1 Results

Watches of Switzerland Group (LON: WOSG) shares jumped more than 7% Thursday after reporting a revenue increase of 4% in constant currency for the first half of fiscal year 2025, driven by robust Q2 performance and strategic investments.

The luxury retailer, known for its premium watches and jewellery, recorded total revenue of £785 million for the 26 weeks ending 27 October 2024, up from £761 million in the same period last year.

The growth was said to have been bolstered by an 11% surge in Q2 revenues, reflecting improving consumer demand in the UK and the US.

Brian Duffy, Chief Executive Officer, attributed the gains to enhanced stock levels, showroom transformations, and new acquisitions, saying, “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.”

The US market was a standout, with revenue rising 11% at constant currency.

Following strategic stock replenishment in Q1, Q2 revenue in the region soared by 24%. Meanwhile, the UK market returned to growth in Q2 after a subdued first quarter, highlighting the resilience of domestic demand.

Despite the positive top-line performance, the group’s adjusted EBITDA declined 7% to £84 million. Adjusted EBITDA and EBIT margins decreased to 11.1% and 8.4%, respectively, reflecting shifts in product mix and cost pressures.

Statutory operating profit fell by 23% to £60 million, while statutory profit before tax dropped 39% to £60 million. Free cash flow was significantly lower at £28 million, impacted by working capital demands.

Looking ahead, WOSG remains optimistic, maintaining its full-year guidance.

“Our trading momentum through November, visibility of intake and second half opening of large showroom investments support our full-year guidance,” Duffy noted.