Watches of Switzerland has upgraded its profit guidance after enjoying record sales in the US and an improving performance in the UK market.
Sales for the luxury watch retailer rose 13% to £1.82bn in the 53 weeks to May 3, driven by a better-than-expected 24% surge in US revenues.
The brand’s North American business now accounts for more than half the group’s sales and profit, with a third coming from its acquisitions, including the four showrooms from Texas-based retailer and Rolex distributor Deutsch & Deutsch.
Meanwhile, the retail group’s UK sales edged up 5% in the year, with a sequential improvement in the second half of the year (+7%).
As a result of the improved sales performance, the retail group now expects adjusted EBIT to be between £152m and £155m.
Chief executive Brian Duffy told Retail Week: “All of the numbers are ahead of what the market was expecting and what we had guided towards as well. It’s nice to come out with a pleasant surprise.
“We’re seeing the UK luxury watch market as having been stable more or less for the last 18 months and much more predictable and getting a little bit better.”
Duffy said the group’s US business has been a “phenomenal success” and is delivering “one and a quarter billion in sales”.
“The US market in watches has been underdeveloped in our view, and we’re demonstrating that to be true in almost everything we do in the US, whether it’s store expansion, events, or other activities.
“The high-income consumer in the US has a very positive frame of mind at the moment, from the success of the stock market and other assets.
“They have disposable income and are inclined to invest in luxury goods like watches and jewellery.
“It’s a good place to be, an underdeveloped category, good consumer attitude, and obviously, our model is working very well in the US.
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