Shares in luxury watch retailer Watches of Switzerland (WOSG) ticked 1.8% higher to £14.80 on Thursday after the company reported strong first half growth and reiterated full year earnings guidance.
Strong demand for luxury watches and jewelry and increased selling prices drove revenue 44.6% higher to £586.2 million for the 26 weeks to 31 October.
Adjusted earnings before interest were 62.7% higher to £67.5 million and the business generated £102.3 million of free cash flow, leaving the group with a net cash position of £30 million, compared with net debt of £22.7 million last year.
BOOMING US PERFORMANCE
The US was the standout performer with revenues increasing 50.2% in constant currencies to £167.6 million and on a two-year basis they are 66.7% higher.
In addition to the previously announced agreement to purchase five stores in Plano (Dallas), Vail, Aspen, Greenwich and Minneapolis, the company completed the opening of an enhanced Rolex dedicated space within Mayors Aventura.
In the UK revenues grew 42.3% to £418.6 million driven by a ‘thriving’ domestic clientele.
Demonstrating the strength of the performance, revenue was 31.8% higher than two years ago when the tourist and airports business represented around a third of total revenues, compared with negligible tourist and significantly reduced airports business in the first half of the current financial year.
WELL STOCKED FOR CHRISTMAS
The company said it was well stocked for the festive holiday season and continued to invest for growth.
Since the period end it has opened its first mono Bvlgari brand in the US, refurbished three stores in the luxury Goldsmiths format, opened two mono-brand boutiques in the UK and purchased three stores the US.
For the full year to 2 May 2022 the company said it does not expect the tourism and airport business to return to pre-pandemic levels and anticipates revenues to be between £1.15 billion and £1.2 billion.
Current consensus expectations are bang in the middle of the guided range at £1.17 billion according to Refinitiv data representing year-on-year growth of 30%.
