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(Sharecast News) - Shares in Watches of Switzerland tanked by more than a third on Thursday as the luxury timepiece seller slashed its annual revenue guidance on the back of slumping demand for its luxury products and forecast of volatile trading conditions for the rest of the fiscal year.
Full-year 2024 revenue was now expected to be between £1.53bn - £1.55bn, compared with an earlier forecast of £1.65bn - £1.70bn, the company said. Shares were down more than 30% in London trade.
"Despite a positive start to the early part of the third quarter, WOSG then experienced a volatile trading performance in the run-up to and beyond Christmas, as the challenging macro-economic conditions impacted consumer spending in the luxury retail sector," the company said in a trading update on Thursday.
"We now expect these challenging conditions to remain for the balance of our fiscal year."
"Sales in the US remained strong with continued double-digit growth. The UK was more challenged, and this impacted a broad range of luxury watch brands and non-branded jewellery. There was an unusually high level of promotional activity in non-branded jewellery."
Chief executive Brian Duffy said the Christmas period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories such as fashion, beauty, hospitality and travel.
Finance costs were also revised upwards to £6m from £5m.
Hargreaves Lansdown head of equity funds Steve Clayton said: "The luxury watch market has enjoyed extraordinary growth in recent years, with watch prices pushing ever higher, despite supply being limited purely by the manufacturers' own decisions. Is the sound of a bubble bursting? Time will tell."
Reporting by Frank Prenesti for Sharecast.com
