03-07-2025
Watches of Switzerland posts record revenue but profits slide
Strong demand for luxury timepieces helped Watches of Switzerland to post record annual revenues but profits declined as the cost of expansion and property impairments weighed on the bottom line.
The company reported group revenue of £1.65 billion for the year to April 27, up 7 per cent on the previous year, fuelled by double-digit growth in the United States.
Profit before tax fell 18 per cent to £76 million, held back by rising showroom costs, new shop openings, including a flagship Rolex boutique on Bond Street, and a £43.6 million property impairment linked to high interest rates and inflation.
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The group's US business was the standout performer, with revenues climbing 16 per cent and surpassing $1 billion for the first time. Growth in the UK was more modest at 2 per cent, although it marked a return to growth after a decline in the previous year.
Brian Duffy, chief executive, said: 'Our performance reflects our differentiated business model, with our scale and leadership in our chosen markets, supported by long-standing, collaborative partnerships with world-leading brands across luxury watches and luxury branded jewellery underpinning sustained growth.'
The group, based in Leicester, said it remained confident in the resilience of the luxury watch category, especially in the still 'underdeveloped' American market, despite caution over the broader macroeconomic backdrop and the risk of new US tariffs.
RBC expects Swiss watch exports to decline by 5 per cent in value and by 7 per cent in volume this year. Its analysts said that with the probability of softening demand 'long-range plan targets are potentially at risk of disappointing or being withdrawn completely, which would be a negative catalyst for the stock'.
Shares in Watches of Switzerland edged lower in early trading.
