Swiss watches up 8.5% in aim of doubling profits by 2028

An employee organizes a display of Omega SA watches in the window of a Watches of Switzerland Group Plc store on Regent Street in London, Britain, Wednesday, August 30, 2023. One of Watches of Switzerland Group’s largest investors Plc has reduced its stake in the UK-listed watch retailer, less than 24 hours after Rolex SA decided to buy rival Bucherer AG. Photographer: José Sarmento Matos/Bloomberg via Getty Images

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Swiss watches posted strong gains on Tuesday, after the UK-based luxury retailer reiterated plans to more than double its sales and profits by fiscal 2028.

Shares were up more than 13% in early trading and up 8.5% as of 9:35 a.m. London time.

The company on Tuesday reported a rise in revenue to £379 million ($467 million), up from £374 million in the most recent quarter. Watch sales increased, while jewelry sales declined.

Half-year growth was strongest in the US, at 11% at constant exchange rates, compared to a 4% decline in the UK and Europe.

The company reiterated its full-year sales and profit guidance for fiscal 2024.

Investors reacted positively to an update to the company’s five-year plan, in which it expressed confidence in its ability to more than double sales and profits and accelerate new showroom projects and merger and acquisition activity. acquisitions.

CEO Brian Duffy said the company sees opportunities in the pre-owned market, particularly in certified pre-owned Rolex watches, which are expected to account for 20% of Rolex sales in the United States and 10% in the United Kingdom. United by 2028.

It also plans to expand its “offerings and leverage partnerships with US megabrands” in the luxury designer jewelry market.

The company’s share price has fallen 36% since the start of the year, according to LSEG data.

The stock was hit particularly hard in August, after rival Rolex announced a deal to buy watch retailer Bucherer, fueling fears of an industry heavyweight taking more market share.

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Montres de Suisse share price.

Kate Calvert, a retail equity analyst at Investec, said the market reaction was because the update contained “no new negatives” following the Rolex jitters, and that trading in the United Kingdom were positive while the United States saw a slight acceleration.

“The focus is on the updated five-year plan, which once again confidently targets a doubling of income, like that [its] to the fore, and should go some way toward alleviating market concerns,” Calvert said by email.


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