Swiss watch stocks fall 28% after guidance cut

An employee arranges a display of Omega SA watches in the window of the Watches of Switzerland Group Plc store on Regent Street in London, UK, on Wednesday, August 2019. October 30, 2023. One of Watches of Switzerland Group Plc's largest investors reduces its stake In the UK-listed watch retailer less than 24 hours after Rolex SA decided to buy rival company, Bucherer AG. Photographer: Jose Sarmiento Matos/Bloomberg via Getty Images

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Swiss watch stocks fell 28% on Thursday morning at 08:15 London time, after the luxury watch retailer lowered its guidance for the 2024 financial year.

“Despite a positive start in the first part of 3QFY24, WOSG subsequently experienced choppy business performance in the run-up to Christmas and beyond, as challenging macroeconomic conditions impacted consumer spending in the luxury retail sector,” the company said. . . In trading update.

“We now expect these difficult conditions to remain in place throughout our fiscal year.”

The company now expects revenues of between £1.53-1.55 billion ($1.94-1.97 billion), down from its previous forecast of £1.65-1.7 billion. Constant currency revenue growth – which excludes currency fluctuations – was revised sharply downward from 8%-11% to 2%-3%, while earnings before interest and tax (EBIT) margin is now expected to be between 8.7% and 8.9%.

The company said demand for its key brands remains strong in the US, where sales continue to grow by double digits, but the UK has faced “greater challenges” affecting a wide range of off-brand luxury watch and jewelery brands.

“The holiday period was particularly volatile this year for the luxury sector, as consumers allocated their spending to other categories such as fashion, beauty, hospitality and travel. While we are disappointed with this trend, we are encouraged by the gains we have made in market share in both sectors. US and UK,” Brian Duffy, CEO of Watches of Switzerland, said in a statement.

“We remain confident in the markets we operate in, and in our model and delivery of our long-term plan announced to the market in November 2023.”

This is a breaking news story and will be updated soon.