Watches of Switzerland has observed a 20% decline in profits during the first half of the year as customers reduce their expenditures on extravagant products because of elevated inflation.
The formal pre-tax profits of this luxury watch retailer dropped to £67m during the 26 weeks leading up to 29 October 2023, a decrease from the previous year’s £83m, while its adjusted EBIT of £73m exceeded the earlier estimates.
Throughout this period, the sales for Watches of Switzerland remained constant at £761m, with a 5% increase in US revenue (or 11% in constant currency terms) counterbalancing a 4% decrease in the UK and Europe.
The US sales now constitute 43% of its total revenue.
CEO Brian Duffy remarked, “The consumer environment in the UK continues to pose more difficulties, and the revenue from the UK and Europe declined by 4% in this period, affected by the timing of product intake in the first quarter and temporary closures of showrooms for renovation.” Duffy also expressed optimism about achieving the full-year projections, expecting a more robust second half owing to the reopening of multiple high-revenue showrooms.
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