Watches of Switzerland reported a strong year of revenue and profitability despite a challenging trading environment.

The luxury watch retailer reported a total group revenue of £1.5bn in the 52 weeks to April 30. UK and Europe revenue increased by 10% to £890m in the same period. 

The retailer expects adjusted EBIT to be between £177m and £181m, surpassing last year’s £144m.

Watches of Switzerland said luxury watch revenue grew 28% and luxury jewellery revenue grew 10% “driven by increases in average selling price and volume, demonstrating the continued dynamism of the category”.

The retailer said it had made “excellent progress in the first two years of its long-range plan and enters FY24 significantly ahead of schedule” as it anticipates a more challenging environment to continue in the first half of 2024.

However, it warned of headwinds in 2024 and predicted the “more challenging trading environment” seen in the second half of 2023 will continue into the first half of 2024, before improving in the second half. It expects a modest sales decline in the first quarter of 2024 before normalising in the second quarter due to product intake timing and strong comparatives. 

Chief executive Brian Duffy said: “2023 was another record year of revenue and profitability, with revenue growth of 25% at reported rates (19% at constant currency) and continued EBIT margin expansion.

“Although, as expected, the second half of 2023 saw a more challenging trading environment, demand remains strong and continues to exceed supply, with client registration lists continuing to grow. I would like to thank all my colleagues for their continued hard work and dedication.

“We enter 2024 significantly ahead of where we expected to be in our long-range plan following two years of exceptional performance and notwithstanding the macroeconomic backdrop.

“Our 2024 guidance assumes revenue growth of 8 to 11% at constant currency with EBIT margin in line with prior year. We remain confident in our goals to maintain our leadership position in the UK, become the clear leader in the US, and capitalise on our growth potential in Europe.”