Watches of Switzerland Group PLC (LSE:WOSG) reported slower growth in the first quarter of its new financial year as conditions in the UK acted as a drag, but it remained confident that the strength of the luxury watch market will support growth despite the macro-economic environment.
Revenue was up 25% to £391mln in the 13 weeks to 31 July, compared to 48% in the preceding quarter and 40% for the whole of its past fiscal year to 1 May.
Its UK arm saw growth slow to 8% to £239mln from 47% in the fourth quarter, which it called a “resilient” performance based on domestic clientele, a recovery in airport business and store development.
This was offset by stronger growth in its US business, with revenues up 76% to £152mln, from 50% in the fourth quarter.
The watch and jewellery retailer, which said sales of luxury watches accounted for 87% of quarterly income, believes the strength of the luxury watch market will continue to support long-term sustainable sales growth despite the wider macro-economic environment.
As a result, the FTSE 250-listed group reiterated its previous full-year guidance of revenue between £1.45bn and £1.5bn.
However, it does anticipate a more challenging environment in the second half of the fiscal year.
"The first quarter continued with strong momentum throughout, and we carry this positive momentum into the second quarter," said chief executive Brian Duffy.
“Despite the well-publicised concerns about the macro-environment, demand for our products remains robust with client registration of interest lists continuing to extend.”
"The luxury watch market is dynamic with exciting developments on new products and marketing across a broad range of brands.”