Latest news with #WatchesofSwitzerland
Yahoo
04-07-2025
- Business
- Yahoo
Watches of Switzerland Group PLC (WOSGF) (FY 2025) Earnings Call Highlights: Record Sales and ...
Revenue: EUR1.652 billion, up 8% in constant currency. US Sales: Over $1 billion, representing 48% of the group. Adjusted EBIT: EUR150 million, up 12% in constant currency. Adjusted EBIT Margin: 9.1%, up 30 basis points. Free Cash Flow: EUR98 million. Return on Capital Employed: 19%. Net Debt: GBP96 million, with a net debt to EBITDA leverage of 0.6 times. Inventory Levels: Up 14%, reflecting acquisitions. Showroom Projects: 15 projects completed, including new Rolex boutiques. US Market Growth: 16% in constant currency. UK Market Growth: 20% increase since 2022. Adjusted EPS: 41.6p, up 9% on the prior year. Share Buyback Program: GBP25 million announced, GBP11 million spent in FY '25. Warning! GuruFocus has detected 3 Warning Signs with LVO. Release Date: July 03, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Watches of Switzerland Group PLC (WOSGF) achieved record sales of EUR1.652 billion in fiscal year '25, marking an 8% increase in constant currency compared to the previous year. The US division surpassed a significant milestone with sales exceeding $1 billion, contributing to 48% of the group's total revenue. The company has successfully expanded its showroom portfolio, including new Rolex boutiques in key locations such as London and the US, and plans further investments in FY '26 and '27. The acquisitions of Roberto Coin Inc and Hediki are progressing well, with promising growth prospects in the luxury branded jewelry sector. The certified pre-owned (CPO) program for Rolex and other brands has exceeded expectations, indicating strong demand in the pre-owned luxury watch market. The luxury watch market faces challenges with demand exceeding supply, leading to long-term price inflation and potential volatility. The UK market experienced significant volatility post-COVID, with high inflationary prices impacting consumer sentiment. The impact of US tariffs on imported goods from Switzerland has led to mid-single-digit price increases by some brand partners, affecting margins. There is uncertainty regarding the future of US tariffs, which could impact the company's financial performance and guidance for FY '26. The company faces challenges in managing inventory levels, particularly in the context of accelerated intake by brands in anticipation of tariffs. Q: Could you comment on what surprised you the most regarding the performance in the US over the last 6 months? Also, what is your outlook for inventory allocation across the brands for FY '26? A: Brian Duffy, CEO: There were no major surprises in the US market; the demand for Swiss watches and luxury branded jewelry remains strong. We achieved a significant milestone by surpassing $1 billion in sales. The US market is healthy, with a 15.5% growth over the last 12 months. Inventory levels are in line with expectations, and there is no excess inventory in the market. Q: How is the trading environment in the UK compared to the US, and what impact do shop closures have on revenue? A: Brian Duffy, CEO: The UK market has stabilized after a period of volatility, and current trading is in line with expectations. Shop closures have minimal impact on revenue as key agencies are maintained and moved to other stores in the local area, resulting in cost savings without significant sales loss. Q: How are non-supply constrained brands performing, and what is your guidance for these brands? A: Brian Duffy, CEO: The non-supply constrained brands, particularly in the price segment of 3,000 to 7,000, have responded well with new product development and marketing. The market is more recognizable now, and we are not calling out any specific concerns for these brands. Q: How are the import tariffs affecting your brand partnerships and supplier payment terms? A: Brian Duffy, CEO: The tariffs have not impacted our brand partnerships or product ranging. Supplier payment terms were adjusted as a one-off correction due to working capital needs from suppliers, unrelated to tariffs. We expect cash conversion to normalize in the coming year. Q: What are your growth expectations for Roberto Coin, and how will mono-brand stores impact revenue and margins? A: Brian Duffy, CEO: Roberto Coin is poised for significant growth with investments in marketing and mono-brand boutiques. The financials are attractive, combining wholesale and retail margins. We are confident in the brand's potential, especially in the US market. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Times
03-07-2025
- Business
- Times
Watches of Switzerland posts record revenue but profits slide
Strong demand for luxury timepieces helped Watches of Switzerland to post record annual revenues but profits declined as the cost of expansion and property impairments weighed on the bottom line. The company reported group revenue of £1.65 billion for the year to April 27, up 7 per cent on the previous year, fuelled by double-digit growth in the United States. Profit before tax fell 18 per cent to £76 million, held back by rising showroom costs, new shop openings, including a flagship Rolex boutique on Bond Street, and a £43.6 million property impairment linked to high interest rates and inflation. • Business live: news, updates and analysis throughout the day The group's US business was the standout performer, with revenues climbing 16 per cent and surpassing $1 billion for the first time. Growth in the UK was more modest at 2 per cent, although it marked a return to growth after a decline in the previous year. Brian Duffy, chief executive, said: 'Our performance reflects our differentiated business model, with our scale and leadership in our chosen markets, supported by long-standing, collaborative partnerships with world-leading brands across luxury watches and luxury branded jewellery underpinning sustained growth.' The group, based in Leicester, said it remained confident in the resilience of the luxury watch category, especially in the still 'underdeveloped' American market, despite caution over the broader macroeconomic backdrop and the risk of new US tariffs. RBC expects Swiss watch exports to decline by 5 per cent in value and by 7 per cent in volume this year. Its analysts said that with the probability of softening demand 'long-range plan targets are potentially at risk of disappointing or being withdrawn completely, which would be a negative catalyst for the stock'. Shares in Watches of Switzerland edged lower in early trading.
Daily Mail
03-07-2025
- Business
- Daily Mail
Watches of Switzerland sales jump but shares slump amid margin pressure
Watches of Switzerland Group's annual revenues recovered to a record high, after strong trading over the second half of the year. But shares fell sharply on Thursday as Watches of Switzerland warned the imposition of US trade tariffs would put further pressure on margins in the year ahead. The luxury retailer said sales increased by 8 per cent at constant currency rates to £1.65billion in the year ending 27 April. Revenue only expanded by 4 per cent in the first half, due to its US business bumping up showroom stock levels of prominent brands before climbing by 12 per cent over the following six months. Luxury jewellery purchases more than doubled from £102million to £211million thanks to the takeover of Italian firm Roberto Coin's US associate company. By comparison, the group's luxury watch sales and combined revenues across the UK and Europe rose by only 2 per cent to £1.35billion and £866million, respectively. Watches of Switzerland's trade in Britain continued to be affected by subdued tourist demand stemming from the removal of VAT-free shopping four years ago, which contributed to its online turnover falling by 5 per cent. Yet the retailer's UK sales still returned to growth as the luxury watch and jewellery market stabilised following considerable pandemic-induced volatility. Its adjusted earnings before interest and tax also grew by 12 per cent to £150million, surpassing analyst expectations of £148.8million. However, pre-tax profits slumped by 18 per cent to £76million owing to product mix and greater promotional activity. Watches of Switzerland's overhead costs also jumped by a quarter, largely due to the Roberto Coin takeover, as well as IT investment, salary hikes, and the opening of a new support centre in Florida. The London-based company expects its profit margins to decline this year in the wake of US President Donald Trump's 10 per cent baseline tariff on imported goods. Trump briefly slapped a 31 per cent 'reciprocal' levy on Swiss-made products in April before suspending the tax for 90 days. Some of Watches of Switzerland's brand partners have responded to the tariffs by hiking prices in the US by a mid-single-digit percentage, thereby eroding margins. It told investors: 'The outcome of US tariff developments remains uncertain. We are in regular dialogue with our brand partners, but it is too early to comment on the potential sector impact of further changes. 'We will provide a further update as to the potential impact on FY26 guidance once the situation becomes clearer.' The Swiss Government has until 9 July to agree a trade deal with the US before the higher tariffs come back. Watches of Switzerland Group shares were 7.1 per cent down at 391.6p on Thursday morning, taking their losses to around 28 per cent since the year started. Equity research analyst at Shore Capital David Hughes said: 'The business has done an admirable job in driving margin recovery alongside revenue growth in FY25A. 'But in our view further margin recovery is needed before the market offers a more generous rating on the stock.'
Mint
03-07-2025
- Business
- Mint
Watches of Switzerland Warns US Tariffs to Hit Margin This Year
Watches of Switzerland Group Plc's profit margin will be hit by US import tariffs this year, as watchmakers raise prices and demand resellers absorb some of the pain in the key market. The UK-based luxury watch retailer expects its margin on earnings before interest and taxes to slip by as much as 100 basis points compared with the previous 12 months. That guidance also assumes the US maintains tariffs at 10% after President Donald Trump's July 9 deadline to conclude new trade deals. Shares of Watches of Switzerland fell as much as 10% in early trading in London — the most since the beginning of April when Trump announced his so-called 'Liberation Day' tariffs — before paring some of the drop. The watch industry has been upended by trade tensions and uncertainty around the tariffs, with watchmakers rushing to get products into the US earlier this year to avoid the fallout of a full-blown trade war. The turmoil has come on top of a wider luxury slowdown in China that has hurt demand. Watches of Switzerland, the biggest Rolex reseller in the UK, said its brand partners in the US have increased prices by the mid-single digits, while reducing distributors' margin percentage. The retailer had warned in May that US tariff announcements were fueling consumer uncertainty. Watches of Switzerland got 47.6% of sales in the US last year, when it surpassed $1 billion revenue there for the first time. Pretax profit fell 18% last year, Watches of Switzerland said in a statement Thursday. The company forecast revenue growth of between 6% and 10% this year in constant currency terms.
The Independent
03-07-2025
- Business
- The Independent
Watches of Switzerland warns over US price hikes after Trump tariffs
Luxury retailer Watches of Switzerland has revealed price hikes for US customers after President Donald Trump's move to slap a 10% tariff on European Union imports to America. The Rolex seller said some of its 'brand partners' in the US had already pushed through 'mid-single digit' percentage price increases on its ranges in response to Mr Trump's tariff hike. The EU and the US are under pressure ahead of a looming July 9 deadline, after which Mr Trump has threatened to impose 50% tariffs on EU imports if negotiations fail. There is currently a baseline tariff of 10% on EU imports to the US under a 90-day pause, which impacts the retailer's ranges made in Switzerland. Watches of Switzerland (WoS) said: 'The outcome of US tariff developments remains uncertain. 'We are in regular dialogue with our brand partners, but it is too early to comment on the potential sector impact of further changes. 'We will provide a further update as to the potential impact on full year 2025-26 guidance once the situation becomes clearer.' Shares in the group fell 6% in Thursday morning trading. In the group's annual results, WoS posted a 5% fall in operating profits to £114 million, but saw revenues hit a record £1.65 billion in the year to April 27 as sales surged 12% in the second half. Overall, constant currency revenues lifted 8% in the year, up 2% across the UK and Europe. On an underlying basis and with currency movements stripped out, earnings rose 12% to £150 million, but pre-tax profits slipped 18% to £76 million. WoS said it expects sales to grow by between 6% and 10% over the new financial year. Brian Duffy, chief executive of WoS, said: 'Our US business has continued its excellent momentum, surpassing 1 billion US dollars revenue for the first time, bolstered by the acquisition of Roberto Coin Inc. 'The UK has returned to growth as trading conditions have stabilised. 'As we look ahead, whilst we are of course remaining mindful of the broader macroeconomic and consumer environment, including potential US tariff changes, we remain confident in the strength of our diversified business model, our strong pipeline of showroom openings and growth projects, and the resilience of the luxury watch and luxury branded jewellery categories.'
