Shares of Watches of Switzerland Group Plc rose after strong sales in the United States helped the watch retailer achieve better results than investors had feared.
The UK's best-selling Rolex watchmaker saw its US sales rise 14% in the fourth financial quarter. This helped total sales rise 3% – more than analysts had expected – to 380 million pounds ($482 million) in the period ending April 28.
Shares rose as much as 19% in London, the biggest intraday move since November. Its value has more than halved in 2024 on fears it could lose market share after Rolex bought rival watch retailer Bucherer AG, marking the Swiss major brand's first significant move to sell its own products.
“Sales in the U.S. have been really strong,” CEO Brian Duffy said in an interview Thursday. “As we've said all along, it's an underdeveloped market.”
Sales of used watches, including Rolex models under the Swiss watchmaking giant's “Certified Pre-Owned” program, doubled in the same period a year earlier, the company said. Branded jewelry sales were stronger than expected as demand rebounded, Duffy said.
“Investors should cheer greater resilience from dreaded fourth-quarter sales,” Jefferies analyst James Grzynick wrote in a note, citing results in the U.K. and U.S.
Watches of Switzerland warned earlier this year that sales and profits would be weaker than expected as many gold and other precious metal watches were not allocated from Rolex and as UK consumers became more cautious.
Duffy said UK consumers chose to spend their money on travel and hospitality instead, resulting in lower demand for more expensive watches.
The company confirmed its long-term target of doubling sales and earnings before interest and tax by 2028, and said it expects sales of £1.67bn to £1.73bn in 2025. Analysts had expected £1.65bn.
