Shares in Watches of Switzerland (WOSG) ticked up 3.3% to an all-time high of £10.58 after the Rolex, Cartier, OMEGA and TAG Heuer watches purveyor reported an impressive doubling of first quarter sales.

With demand for luxury watches continuing to outpace supply and the company generating strong growth on both sides of the pond, Watches of Switzerland is confident in the outlook for the rest of the year.

For the 13 weeks to 1 August, group sales rose 102% to £297.5 million at the UK’s largest luxury watch retailer; luxury watch sales shot up 97% to £295.3 million while luxury jewellery also performed well, with revenue rising 99% to £20.1 million.

Encouragingly, e-commerce sales grew by 15.9%, maintaining strong momentum despite UK brick and mortar stores being open during the period.

MOMENTUM ACCELERATES

‘We have had a very good start to the new financial year with a further acceleration in momentum, versus pre COVID-19 pandemic growth levels, underpinned by diversified growth across our markets and categories,’ enthused CEO Brian Duffy.

He explained Watches of Switzerland’s US business ‘goes from strength to strength’ with both luxury watches and luxury jewelry performing strongly. The company’s high-end timepieces are clearly proving attractive to customers who have accumulated disposable wealth during the pandemic.

In the US, the group’s refurbished Mayors stores continue to generate ‘significant sales uplifts’ and the recovery of footfall into Las Vegas and New York is also driving accelerated momentum in physical stores.

‘Trading in the UK has been extremely strong, driven by sustained high demand from domestic clientele,’ added Duffy.

‘Our newly opened and refurbished stores have performed well, whilst our ecommerce business has also continued to grow impressively, proving the effectiveness of our multi-channel model despite the strong prior-year comparator.’

INFLATION PROTECTION

Shares in Watches of Switzerland have enjoyed a spectacular run since the company joined the stock market in the summer of 2019, bid up on a series of earnings upgrades.

We highlighted the stock as a ‘Golden 20s’ play at 821p here in June, also pointing out its inflation protection characteristics.

Luxury watches are durable assets with outsized demand compared to supply, giving retailers like Watches of Switzerland significant pricing power.

READ MORE ON WATCHES OF SWITZERLAND HERE

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Issue Date: 10 Aug 2021