Watches of Switzerland profits rise despite Covid-19 impact

The luxury watch specialist said adjusted EBITDA rose 14% to £78m during the 52 weeks to April 26. Operating profit climbed 6.2% to £48m over the same period. 

Watches of Switzerland’s group revenues across the full year increased 4.8% to £811m, despite an 85% slump in sales during the final six weeks of its financial year.

In the UK, sales slipped 0.5% to £576m, but had been up 9.4% across the 46 weeks to March 15. Revenues from its British business slumped 85% in the final six weeks of its fiscal year. 

Watches of Switzerland experienced similar sales patterns in the US, where revenues had jumped 36% prior to lockdown, before an 86% slump in the six weeks to April 26.

Across the year, sales in the US improved 21% to £222m.    

Trading conditions have continued to prove challenging in the first quarter of the retailer’s new financial year. Group revenue in the 13 weeks to July 26 slumped 28% to £152m, although Watches of Switzerland insisted that figure was “ahead of management expectations”. 

Sales edged up 0.3% in June compared with the same month in 2019, while July was up 7.4% year on year as demand began to bounce back. 

Watches of Switzerland’s UK sales dropped 30% to £108m during the quarter, while in the US, sales fell 20% to £43m. 

Watches of Switzerland boss Brian Duffy said: “I am delighted with our achievements during FY20, our first year as a public company. We delivered a strong performance during the first 46 weeks of the year before adapting with speed and agility to the challenges presented by the Covid-19 pandemic. Momentum accelerated in our US business adding to the positive performance in the UK and we remain confident in our strategy to drive profitable growth in both markets.”

Watches of Switzerland said it expects revenues in 2020/21 to come in between £840m and £860m, with EBITDA margins flat year on year.