An employee arranges a display of Omega SA watches in the window of a Watches of Switzerland Group Plc store on Regent Street in London, UK, on Wednesday, Aug. 30, 2023. One of Watches of Switzerland Group Plc’s biggest investors cut its stake in the UK-listed timepiece retailer less than 24 hours after Rolex SA decided to buy a rival, Bucherer AG. Photographer: Jose Sarmento Matos/Bloomberg via Getty Images
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Watches of Switzerland shares plummeted 28% on Thursday morning at 08:15 London time, after the luxury watch retailer cut its guidance for the 2024 fiscal year.
“Despite a positive start to the early part of Q3 FY24, 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.
“We now expect these challenging conditions to remain for the balance of our fiscal year.”
The company now expects revenue of £1.53-1.55 billion ($1.94-1.97 billion), down from its previous guidance of £1.65-1.7 billion. Constant currency revenue growth — which excludes fluctuations in currency — was revised sharply downwards from 8-11% to 2-3%, while EBIT (earnings before interest and tax) margin is now projected at 8.7-8.9%.
The company said that demand for its key brands remains strong in the U.S., where sales continue to grow by double digits, but the U.K. was “more challenged” and impacted a broad range of luxury watch brands and non-branded jewellery.
“The festive period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories such as fashion, beauty, hospitality and travel. Whilst we are disappointed with this trend, we are encouraged by our market share gains in both the U.S. and U.K.,” Watches of Switzerland CEO Brian Duffy said in a statement.
“We remain confident in the markets in which we operate, our model and the delivery of our Long Range Plan announced to the market in November 2023.”
This is a breaking news story and will be updated shortly.