Q4 FY24 Trading Update
for the 13 weeks (Q4 FY24) and 52 weeks (FY) to
FY24 performance in line with guidance
FY25 outlook reflects cautious optimism
Reiterating Confidence in Delivering Long Range Plan Financial Targets
"We finished the year strongly, with Q4 sales in line with guidance and ahead of consensus. Particularly pleasing was the performance in the US, with sales up 14% in the period.
"We are confident that our strategy, exceptional client service and strong brand relationships enables us to continue to drive growth and gain market share. We have seen growth in our Registration of Interest lists for sought after products, and exceptionally strong performance of pre-owned, particularly Rolex Certified Pre-Owned. Our acquisition of
"We enter FY25 with cautious optimism. We have a terrific programme of showroom developments on both sides of the
"The inherent strength of the categories we operate in, coupled with our superior business model and retail expertise continues to set us apart. We remain focused on executing our Long Range Plan and are committed to the targets to more than double sales and Adjusted EBIT by the end of FY28."
Q4 FY24 Highlights
Group revenue
· Q4 FY24 luxury watches revenue +5% at constant currency, +3% at reported rates, with particularly strong performance in the US
· Demand for our key brands, particularly products on the Registration of Interest lists, continues to be strong, with consistent additions and conversions
· Continued market share gains in the luxury watch market in both the
· Rolex Certified Pre-Owned (Rolex CPO) performing ahead of expectations, with further roll-out of doors planned in FY25 as supply conditions in the
· Total pre-owned and vintage (including Rolex CPO) revenue doubled in Q4 FY24 against prior year
· Q4 FY24 saw a significant improvement in jewellery performance:
o Flat on last year in constant currency, -1% at reported rates with sequential improvement from -16% year on year in Q3 FY24 in constant currency, -18% at reported rates
o Significant outperformance by luxury branded jewellery
Performance by Geography:
US revenue
· US sales remained strong across all regions
· Sustained growth reflecting the success of our model and strength of client demand
· Showroom development programme continues: Watches of Switzerland One Vanderbilt,
· Secured a new Rolex mono-brand boutique in
· On
· Continued to gain market share in the luxury watch market due to our differentiated offering despite the challenging macroeconomic conditions
· Sales trends year on year at -4% progressed in Q4 versus Q3 (-7%), supported by an improvement in jewellery sales
·
· Rebranding, colleague training and system conversions completed for the showrooms acquired from
· Ecommerce revenue2 -20% on last year, impacted by the mix of products through this channel and performance of the
· Showroom development programme continues with several projects completed in the period:
o Major expansion of the Patek Philippe space in Watches of
o Opened two mono-brand boutiques for TAG Heuer and TUDOR at
o Progress made on important projects, including the
FY24 Highlights
Group revenue
· US revenue
·
· Luxury watches revenue +3% in constant currency, +1% reported, with demand continuing to outstrip supply for key brands
· Luxury jewellery revenue -13% in constant currency, -14% reported, with Q4 FY24 the best performing period. Luxury branded jewellery continues to significantly outperform in jewellery
· Addition of prestigious luxury jewellery brands within the portfolio, including the introduction of
· Adjusted EBIT3 expected to be between
· Operating cash conversion expected to be c.66% with net cash of
Long Range Plan (LRP) Update
· We remain confident in the LRP targets to more than double sales and Adjusted EBIT by the end of FY28
· The initial performance of Rolex CPO has been ahead of our expectations, and we expect Rolex CPO to outperform the targets previously outlined in the LRP
· Given the recent acquisition, we see further growth opportunities for
· We have the strongest ever pipeline of committed Rolex and other key brand projects through to FY28
· Strong focus on cost control to generate leverage over fixed costs will drive profitability improvements
· In line with our disciplined approach to capital allocation and given the pipeline of high returning opportunities in the
Outlook for FY25
· Following the more challenging trading conditions of FY24, we are cautiously optimistic about trading in FY25. The industry as a whole is being more conservative on production given the current volatility in the market, which we believe is a responsible approach to the long-term stability of the luxury watch market
· FY25 guidance reflects current visibility of supply from key brands and confirmed showroom refurbishments, openings and closures, and excludes uncommitted capital projects and acquisitions
· FY25 guidance includes the annualisation of the Ernest Jones acquisition, and
The Group provides the following FY25 guidance on an organic pre-IFRS 16 basis, assuming a £/
o Revenue: |
|
o Adjusted EBIT margin %: |
+0.2% to +0.6% expansion from FY24 |
o Total finance costs: |
c. |
o Underlying tax rate: |
28% - 30% |
o Capex: |
|
o Operating cash conversion: |
c.70% |
|
|
The equivalent guidance on an IFRS 16 basis is:
o Adjusted EBIT margin %: |
+0.2% to +0.6% expansion from FY24 |
o Total finance costs: |
|
|
|
· The Group is exposed to movements in the £/$ exchange rate when translating the results of its US operations into Sterling. The actual average exchange rate for FY24 was
· The Group has an exciting pipeline of new showroom projects planned in FY25:
o European flagship Rolex boutique on
o New Audemars Piguet Townhouse, operated as a joint venture,
o New
o New
o New Watches of
o Relocation and addition of Rolex to Watches of Switzerland Legacy West,
o Relocation/expansion of Mayors Tampa, Mayors
o Expansions of Betteridge Greenwich, including enhanced
o Conversion of Mayors multi-brand
· The Group plans to announce FY24 results on
|
Q4 FY24 |
Q4 FY23 |
Q4 FY24 vs Q4 FY23 |
|
(£ million) |
13 weeks to |
13 weeks to |
Reported YoY % |
Constant currency YoY % |
|
|
|
|
|
|
190 |
198 |
-4% |
-4% |
US |
190 |
173 |
+10% |
+14% |
Group Revenue |
380 |
371 |
+3% |
+4% |
|
FY24 |
FY23 |
FY24 vs FY23 |
|
(£ million) |
52 weeks to |
52 weeks to |
Reported YoY % |
Constant currency YoY % |
|
|
|
|
|
|
846 |
890 |
-5% |
-5% |
US |
692 |
653 |
+6% |
+11% |
Group Revenue |
1,538 |
1,543 |
-% |
+2% |
|
Q4 FY24 |
Q4 FY23 |
Q4 FY24 v Q4 FY23 |
|
(£million) |
13 weeks to |
13 weeks to |
Reported YoY % |
Constant currency YoY% |
Luxury watches |
338 |
329 |
+3% |
+5% |
Luxury jewellery |
22 |
22 |
-1% |
-% |
Services/other |
20 |
20 |
-% |
+1% |
Group Revenue |
380 |
371 |
+3% |
+4% |
|
FY24 |
FY23 |
FY24 v FY23 |
|
(£million) |
52 weeks to |
52 weeks to |
Reported YoY % |
Constant currency YoY% |
Luxury watches |
1,345 |
1,336 |
+1% |
+3% |
Luxury jewellery |
102 |
119 |
-14% |
-13% |
Services/other |
91 |
88 |
+4% |
+5% |
Group Revenue |
1,538 |
1,543 |
-% |
+2% |
Notes
The financial information contained herein is unaudited
Growth rates are calculated on unrounded numbers
[1]
[2] Ecommerce revenue are sales which are transacted online
[3] Adjusted EBIT is defined as operating profit before exceptional items and IFRS 16 impact
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The Watches of
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The Watches of
As at
The Watches of
This announcement has been prepared by Watches of
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company's ability to control or predict. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition, liquidity, and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in this announcement and/or the information incorporated by reference into this announcement.
Any forward-looking statements made by or on behalf of the Company or the Group speak only as of the date they are made and are based upon the knowledge and information available to the Directors on the date of this announcement, and are subject to risks relating to future events, other risks, uncertainties and assumptions relating to the Company's operations and growth strategy, and a number of factors that could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. Undue reliance should not be placed on any forward-looking statements and, except as required by law or regulation, the Company undertakes no obligation to update these forward-looking statements. No statement in this announcement should be construed as a profit forecast or profit estimate.
Before making any investment decision in relation to the Company you should specifically consider the factors identified in this document, in addition to the risk factors that may affect the Company or the Group's operations as detailed above.