Shares plummet by a third as Watches of Switzerland slashes outlook

Shares in Watches of Switzerland plummeted on Thursday after it slashed its outlook for the year and said it expects “no recovery in consumer demand”.

The business said it still expects revenue to grow during the financial year, which ends in late April, but the challenging Christmas and beyond means it will be a quarter as fast as previously expected.

The business slashed revenue growth projections from 8-11% to 2-3% and said revenue would be up to £170 million less than previously guided.

Its earnings margin guidance was slashed from “in line” with last year – when it was 10.7% – to the new guidance of 8.7-8.9%

In the wake of the news, shares plummeted by as much as a third.

“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,” said chief executive Brian Duffy.

“Whilst we are disappointed with this trend, we are encouraged by our market share gains in both the US and UK.

“I would like to thank our colleagues for continuing to provide high quality service and support to our clients against this challenging backdrop.

“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.”

The business said the challenging conditions it saw during the Christmas period would persist for the rest of its financial year.

It said sales in the US were still strong, growing in the double-digit percentages.

“The UK was more challenged and this impacted a broad range of luxury watch brands and non-branded jewellery,” the business said.

“There was an unusually high level of promotional activity in non-branded jewellery.”