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(Alliance News) - Watches of Switzerland Group PLC said Thursday sales prior to the Covid-19 lockdowns were sharply higher, but it has taken a hit following the closure of its stores.
For the 52 weeks ending April 26, the watch retailer said revenue rose 5.9% year-on-year to GBP819.3 million - above its guided range of GBP809 million to GBP812 million.
In the first 46 weeks of the financial year, to March 15, Watches of Switzerland said revenue was up 16% - with UK sales up 9.4% and US sales 36% higher. Luxury watch sales rose 19%.
The final 6 weeks took a hit as all stores in the UK and US were closed.
Over the 52 weeks, UK sales were slightly higher to GBP591.6 million, while US sales were able to grow 23% to GBP227.7 million.
"Prior to the Covid-19 pandemic, the group had been on track to deliver double-digit sales growth, reflecting our strong brand partnerships, favourable market conditions and accelerating momentum in the US," Chief Executive Brian Duffy said.
E-commerce sales were up 46% year-on-year during the 6 weeks to April 26.
Duffy continued: "Despite the current challenges, demand for luxury watches has remained strong with online sales performance ahead of our expectations. Through our longstanding partnerships with the most prestigious Swiss watch brands, we have further enhanced the online customer experience with the introduction of additional brands which we had previously only transacted in our stores."
Duffy said he remains confident the "strong fundamentals that underpin the luxury watch category remain intact and will do so as we emerge from the current situation".
"Luxury watches continue to be a supply-driven segment with robust demand and unique value preservation characteristics. Longer term, we are well positioned to deliver on our plans to leverage our leading position in the UK and become a leader in the US luxury watch market," he added.
At April 26, net debt was GBP131.4 million. As of May 13, total available facilities were about GBP265.0 million.
"The group is confident it has sufficient financial headroom at year-end to sustain operations under a scenario of continued store closures and dampened consumer sentiment for a prolonged period. This assumes the impact to revenue continues to be partially offset by a series of mitigating actions to preserve cash," the luxury watch retailer said.
Watches of Switzerland said it is reviewing its guidance for financial 2021.
Shares in Watches of Switzerland were 2.0% higher in London on Thursday at 225.00 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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