“Cautiously Optimistic”: Watches of Switzerland Reports Q4 Growth and Plans for FY25

In the fourth quarter, Watches of Switzerland reported a revenue increase to £380 million, up 4 percent at constant currency and 3 percent at reported rates. The luxury watches segment saw a 5 percent rise at constant currency and 3 percent at reported rates, with particularly strong performance in the US.

For the full year, group revenue reached £1,538 million, reflecting a 2 percent increase at constant currency from the previous year, while remaining flat at reported rates. Following the more challenging trading conditions of FY24, the company expressed “cautious optimism” about trading in FY25.

“We finished the year strongly, with Q4 sales in line with guidance and ahead of consensus. Particularly pleasing was the performance in the US, with sales up 14 percent in the period. We enter FY25 with cautious optimism. We remain focused on executing our Long Range Plan and are committed to the targets to more than double sales and adjusted EBIT by the end of FY28,” said Brian Duffy, CEO of Watches of Switzerland.

Review of Financial Results
In the fourth quarter, jewelry sales were flat compared to last year at constant currency and down 1 percent at reported rates. This marked a sequential improvement from the third quarter, where sales were down 16 percent at constant currency and 18 percent at reported rates.

By geography, US revenue reached £190 million, a 14 percent increase over last year at constant currency and a 10 percent increase at reported rates. The company opened Watches of Switzerland One Vanderbilt in New York in March 2024 and secured a new Rolex mono-brand boutique in Lenox, Atlanta, opening in FY25, replacing the existing Mayors multi-brand.

On May 8, 2024, the group acquired the entire share capital of Roberto Coin, the exclusive distributor of Roberto Coin in the US, Canada, Central America, and the Caribbean, for $130 million.

In the UK & Europe, revenue declined 4 percent to £190 million. Sales trends improved in the fourth quarter, supported by better jewelry sales, but e-commerce revenue declined 20 percent. The company expanded its Patek Philippe space on Regent Street, London, and opened mono-brand boutiques for Tag Heuer and Tudor at Gatwick Airport’s South Terminal.

FY24 Result Highlights
For FY24, US revenue reached £692 million, up 11 percent at constant currency and 6 percent at reported rates. In contrast, UK & Europe revenue of £846 million declined 5 percent, impacted by macroeconomic conditions in the UK. Luxury watch revenue increased 3 percent at constant currency and 1 percent at reported rates, while luxury jewelry revenue dropped 13 percent at constant currency and 14 percent at reported rates. The company added luxury jewelry brands such as Pomellato, Fred, Pasquale Bruni, and Faberge to its portfolio.

The company forecasts adjusted EBIT to be between £133 million and £136 million for the full year. It projects FY revenue to be in the range of £1.67 to £1.73 billion, representing growth of 9 percent to 12 percent at constant currency, with an adjusted EBITDA margin expansion of 0.2 percent to 0.6 percent from FY24.