Watches of Switzerland profits soar in half-year results

Watches of Switzerland has reported an increase in its half-year profits, with profit rising to £36.2m in the 26 weeks ended 25 October, up from a £9m loss reported the prior year. Total sales fell 2.6% on a constant currency basis to £428.7m in light of forced lockdowns and other restrictions on non-essential retailers. UK sales were down 7.4% over the period due to a dramatic decrease in tourism which continued to affect high street footfall. Online sales boomed in light of lockdowns, however, with e-commerce sales soaring by 65.4% in the period. The watch retailer also posted a 26.5% improvement in adjusted EBITDA to £52.2m, despite the fact that stores were only able to trade for 59% of their total hours in its half-year of trading. In light of its “stronger than anticipated” performance, the group has now revised its full-year guidance for 2021, predicting full-year revenues of between £900m and £925m, up from the previous guidance of between £880m and £910m. Brian Duffy, Watches of Switzerland’s chief executive officer, said: “We have continued to deliver on our strategic priorities during the first half, achieving a robust performance against significant headwinds, further consolidating our position in luxury watches and demonstrating the unique, supply-driven qualities which underpin the resilience of our category and the strength of our business. “Despite significant headwinds throughout the period, we achieved a good sales performance with domestic customers offsetting lower tourist and airport sales in the UK, and elevated momentum in the US. With positive cash management, we have further reduced debt and have a significant liquidity headroom.” He added: “As a result of our stronger than anticipated first half performance and positive trading in the first part of Q3, we have revised our full year guidance upwards. Our guidance assumes some further negative trading impact from potential lockdown measures in January and February 2021. “We are confident we are well positioned for future growth, with plans to continue to invest in further cementing our market leadership in the UK and to build upon our early success generated to date in the US.”