Watches of Switzerland sees used watch sales double
WATCHES of Switzerland Group shares soared after strong sales in the US helped the watch retailer report better results than investors had feared.
The top seller of Rolex watches in the UK saw US sales jump 14 per cent in its fiscal fourth quarter. That helped total sales rise 3 per cent – more than analysts expected – to £380 million (S$647.4 million) in the period ended Apr 28.
The shares rose as much as 19 per cent in London, the biggest intraday move since November. They have more than halved in 2024 on concerns it could lose market share after Rolex bought rival watch retailer Bucherer, marking the top Swiss brand’s first significant move into selling its own products.
“Sales in the US were really strong,” chief executive officer Brian Duffy said in an interview on Thursday (May 16). “As we’ve said all along, it’s an underdeveloped market.”
The company said sales of used watches, including Rolex models under the Swiss watchmaking giant’s ‘certified pre-owned’ program, doubled in the period from the prior year. Sales of branded jewellery were also stronger than expected as demand rebounded, Duffy said.
“Investors should cheer more resilient than feared fourth quarter sales,” Jefferies analyst James Grzinic wrote in a note, citing both results in the UK and US.
Watches of Switzerland warned earlier this year that sales and profit would be weaker than anticipated as it was not allocated as many gold and other precious metal watches from Rolex and as UK consumers turned more cautious.
UK consumers chose to spend their money on travel and hospitality instead so demand for more expensive watches dropped, Duffy said.
The company reiterated its long-term target of more than doubling sales and earnings before interest and taxes by 2028, and said it expects sales of £1.67 billion to £1.73 billion in 2025. Analysts had been expecting £1.65 billion. BLOOMBERG
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