Watches of Switzerland Group PLC (LSE:WOSG) revealed it expects full-year profits to have slipped year-on-year as sales stagnated, but the shares soared more than 10% as the City expected much worse.
Last year, Rolex bought a major retailer in what was seen as a threat to specialist luxury watch sellers such as WoS, but other than a poor performance in the UK the tone in today's statement was reasonably sanguine.
Underlying earnings are forecast to reach between £133 million and £136 million, representing a drop from 2023’s £165 million while revenues were flat at £1.5 billion
A poor performance in Europe, with the region experiencing a 5% decline in sales, hit the numbers and was attributed to difficult macroeconomic conditions in the UK.
Across the pond, sales at the US group were positive, seeing a 6% year-on-year jump to £692 million as it continues to open new showrooms.
A new venue opened in New York in March and there are plans to open a Rolex mono-brand boutique in Lenox, Atlanta in the 2025 financial year.
Looking forward, Watches of Switzerland said it was “cautiously optimistic” about trading in the new financial year.
With refurbishments of showrooms and new openings planned, the company expects full-year revenues to reach between £1.67 and £1.73 billion, marking a 9% jump year-on-year.
In the medium term, the company remains confident it can double its sales and underlying earnings by 2028.
Brian Duffy, chief executive officer, said: “The inherent strength of the categories we operate in, coupled with our superior business model and retail expertise continues to set us apart.
“We remain focused on executing our Long Range Plan and are committed to the targets.”