Watches of Switzerland (LON: WOSG) declined Wednesday, despite the firm posting a rise in revenue and raising its expectations in its interim results.
As expected, its results fell in line with other luxury brands, showing demand in the high-end fashion category remains resilient despite soaring inflation and other macroeconomic factors impacting other fashion retailers.
Revenue for fiscal H1 2023 was £765 million, up +23% on a constant currency basis from £586 million in H1 FY22. The company stated that it maintained its excellent momentum in the US with revenue of £311 million, while its robust success in the UK was driven by local clients, with revenue of £454 million.
“We are pleased to report another quarter of strong trading driven by broad-based sales growth across our portfolio of world-leading partner brands. Demand remained strong through the quarter and continues to exceed supply, with client registration lists extending as consumers respond to innovative new products, impactful marketing and elevated client service,” said Brian Duffy, Chief Executive Officer of WOSG.
While Watches of Switzerland continues to monitor the broader macroeconomic climate, the company believes that the strength of the luxury watch and jewelry categories, the distinctive demand dynamics, and its model's success and adaptability will support long-term sustainable sales growth.
The company increased guidance to account for currency fluctuations, with sales in the second half to range between £1.5 billion and £1.55 billion, up from previous guidance of £1.45 billion to £1.55 billion, while adjusted EBIT is expected to be between £163 million and £175 million, up from £157 million to £169 million previously.
Shares of Watches of Switzerland have slipped 1.7% so far Wednesday.