Watches of Switzerland has seen a 20% drop in half-year profits as consumers reduce spending on luxury items due to high inflation.
The luxury watch retailer’s statutory pre-tax profits fell to £67m in the 26 weeks to 29 October 2023, down from £83m last year, although its adjusted EBIT of £73m was higher than previous guidance.
During this period, sales for Watches of Switzerland remained flat at £761m, with a 5% growth in US revenue (or 11% on a constant currency basis) offsetting a 4% decline in the UK and Europe.
US sales now account for 43% of its total revenue.
Chief executive Brian Duffy stated, “The consumer environment in the UK continues to be more challenging and UK and Europe revenue was down 4% in the period, impacted by the timing of product intake in the first quarter and temporary showroom closures for refurbishment.” Duffy also expressed confidence in meeting the full-year guidance, with expectations for a stronger second half due to the reopening of several high-revenue showrooms.
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