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Company 'cautiously optimistic' on new financial year
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Sees revenue of 1.67-1.73 bln stg in FY2024-25
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Shares jump as much as 19%
May 16 (Reuters) - Watches of Switzerland forecast higher revenues in its new financial year, sending shares in the luxury retailer up as much as 19% on Thursday following a tough time for the industry.
Luxury groups including Burberry, LVMH and Kering have reported difficult trading conditions amid sticky inflation and a weak Chinese market.
"Following the more challenging trading conditions of FY24, we are cautiously optimistic about trading in FY25," Watches of Switzerland said in a statement.
The company, which sells brands including Rolex, Cartier and Patek Philippe, forecast revenue of 1.67-1.73 billion pounds ($2.12-$2.19 billion) this financial year.
That compared with a 2% increase at constant currencies to 1.54 billion pounds in the year ended April 28.
Watches of Switzerland shares, which had lost about 50% of their value this year as of Wednesday's close, were up 10.4% to 372.99 pence at 0845 GMT.
"The luxury watch category is currently in a cyclical downturn, which is likely to impact retail LFLs (like-for-like sales) in the coming quarters," said RBC analysts. However, they added the company should benefit from new store openings.
CEO Brian Duffy said Watches of Switzerland remained committed to its targets to more than double sales and adjusted operating profit (EBIT) by the end of its 2028 fiscal year.
"The industry as a whole is being more conservative on production given the current volatility in the market, which we believe is a responsible approach to the long-term stability of the luxury watch market," the company said.
