Watches of Switzerland raises guidance as sales surge

Watches of Switzerland has announced that revenue for the first 10 weeks of Q2 has been “stronger than expected” at £202.7m, up 20.2% in constant currency and 18.3% in reported terms against the prior year. The group also reported sales to date of £145.1m, up by 12.6% against the prior year. It comes as its UK performance has been driven by “strong” domestic sales, which has offset lower tourist and airport business, according to the group. Tourist and airport sales accounted for only 9.2% of group sales in the second quarter to date, down from 32.5% the year before. UK regional stores, however, “continued to outperform” London stores where footfall still remains low, though e-commerce sales across the UK were up by 49.9% in total. The group added that luxury watches have also outperformed in the period, while luxury jewellery has “performed well” with growth seen in both the UK and the US markets. In addition, new product launches have “also been stronger than anticipated with a positive influence on sales”. In light of its latest update, the group has now raised its guidance for the 2021 financial year, with total revenue now expected to be between £880m and 910m, up from the previous guidance of £840m to £860m. Brian Duffy, CEO, said: "We are very pleased with the strong Q2 performance we are delivering in what continue to be unprecedented market conditions. “Trading momentum has further improved in Q2. Stronger than anticipated UK domestic sales are offsetting lower tourist and airport traffic, whilst regional stores are continuing to outperform London stores.” He added: “Furthermore, the strong momentum we have established in the US has further accelerated. All US regions are contributing to this positive trend. “Our guidance for the balance of the fiscal year assumes that the positive trend experienced in Q2 will be moderated by the impact of pandemic related retail disruption in the UK and the US and uncertainty in the US economy, impacting mainly in Q3. We do not assume any improvement in recent trends regarding the travel or tourist sectors.”