Watches of Switzerland (LON: WOSG) shares have fallen in early Wednesday trading despite the company seeing a rise in revenue and lifting its guidance in its interim results.
As expected, its results fell in line with other luxury brands, showing demand in the high-end fashion category remains resilient despite soaring inflation and other macroeconomic factors impacting other fashion retailers.
The company’s revenue came in at £765 million in fiscal H1 2023 and £586 million in H1 FY22, up +23% on a constant currency basis. The company said it continued strong momentum in the US with revenue of £311 million, while in the UK, its strong performance was driven by domestic clientele, with revenue of £454 million.
“We are pleased to report another quarter of strong trading driven by broad-based sales growth across our portfolio of world-leading partner brands. Demand remained strong through the quarter and continues to exceed supply, with client registration lists extending as consumers respond to innovative new products, impactful marketing and elevated client service,” said Brian Duffy, Chief Executive Officer of WOSG.
The luxury watch firm stated that while it continues to monitor the wider macro-economic environment, the strength of the luxury watch and jewellery categories, the unique demand dynamics, and the success and agility of its model will continue to support long-term sustainable sales growth.
Looking ahead, the company raised guidance to reflect movements in foreign exchange. It sees second-half revenue between £1.5 billion and £1.55 billion, up from previous guidance of £1.45 billion and £1.5 billion. Meanwhile, adjusted EBIT is seen between £163 million and £175 million, increasing from previous guidance of £157 million to £169 million.
Watches of Switzerland shares are down 2.5% at the time of writing. On Tuesday, its stock gained 2%, closing at 915p per share.
In addition, Credit Suisse analyst Natasha Brilliant initiated coverage of Watches of Switzerland with an Outperform rating and a 1,075p price target yesterday. The analyst said WOSG offers “”high-quality”” exposure to in-demand, supply-constrained watch brands. She added that the firm views Watches of Switzerland as an organic growth and acquisition story.