REG - Watches of Switzlnd. - Q3 FY22 Trading

Watches of SwitzerlandAnnouncement

10/02/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220210:nRSJ2224Ba&default-theme=true

RNS Number : 2224B  Watches of Switzerland Group PLC  10 February 2022

 

 

Watches of Switzerland Group PLC

Q3 FY22 Trading

for the 13 weeks (Q3 FY22) and 39 weeks (9M FY22) to 30 January 2022

 

Strong Q3 FY22 trading, outlook now expected to be towards the top end of
guidance

Entrance into the European market securing six mono-brand boutiques

 

Watches of Switzerland Group PLC ('the Group') today provides the following
trading update for the 13 and 39 weeks ending 30 January 2022.

 

 

·      Q3 FY22 Group revenue £348.1 million (Q3 FY21: £272.6 million),
+27.9% vs Q3 FY21 and +36.5% vs Q3 FY20 (both in constant currency).  YTD
Group revenue £934.3 million +38.0% vs FY21 and +39.2% vs FY20 (both in
constant currency)

o  Q3 FY22 luxury watches +21.0% on last year.  Demand for luxury watches
continues to be very strong in both the UK and the US consistently exceeding
supply

o  Sales of "Super High Demand" (Rolex, Patek Philippe and Audemars Piguet)
watches reflected the timing of intake in the quarter.  Full year intake
continues to be in line with our expectations

o  Growth in other luxury watches (i.e. excluding Rolex, Patek Philippe and
Audemars Piguet) was +111.9% on last year

o  Q3 FY22 luxury jewellery +88.4% on last year reflecting a strong market,
continued improvement in ranging and the incremental growth from the
Betteridge acquisition and the opening of our first Bvlgari boutique

o  Q3 FY22 Group ecommerce sales -1.1% on last year when UK stores were open
for four weeks out of thirteen due to COVID-19 lockdowns (+123.1% vs Q3 FY20)

o  Group's strategy to expand in Europe progressed, securing six mono-brand
boutiques in Sweden, Denmark and Republic of Ireland.  These boutiques will
open in H1 FY23

o  Previously committed donation of £3.0 million paid to The Watches of
Switzerland Foundation of which £1.5 million was accrued in FY21 and £1.5
million in H1 FY22

o  The Group granted a free gift of 50 shares to all colleagues and launched
employee share save schemes in the UK and the US to further incentivise
colleagues

 

 

·      Q3 FY22 US revenue £124.6 million (Q3 FY21: £86.5 million),
+44.6% vs Q3 FY21 and +72.3% vs Q3 FY20 (both in constant currency)

o  Luxury watch growth of +32.4% on last year, with 214.3% growth in other
luxury watch brands (i.e. excluding Rolex, Patek Philippe and Audemars Piguet)

o  Exceptional luxury jewellery growth of +172.6% on last year, benefiting
from the Betteridge acquisition on 1 December 2021 and the opening of our
first Bvlgari boutique, adjacent to the refurbished Mayors Aventura, Florida

o  Store network further enhanced with:

§ Refurbished Rolex boutique in Wynn Resort, Las Vegas

§ Further progress on our Mayors refurbishment programme with the reopening
of Mayors Millenia, Florida

§ Expansion of the mono-brand boutique channel with the opening of Breitling
Short Hills, New Jersey and Tudor Millenia, Florida

 

 

 

·      Q3 FY22 UK revenue £223.5 million (Q3 FY21: £186.1 million),
+20.1% vs Q3 FY21 and +22.0% vs Q3 FY20

o  UK performance continues to be driven by a thriving domestic clientele

o  Sales driven through our omni-channel approach supported by increased
digital marketing

o  Luxury watches +15.2% on last year, with +77.9% growth in other luxury
watch brands (i.e. excluding Rolex, Patek Philippe and Audemars Piguet)

o  Luxury jewellery +55.7% on last year reflecting continued market demand
and continued improvement in ranging

o  Continued investment in store network:

§ Roll out of the Goldsmiths Luxury concept to a further five stores

§ Mono-brand boutique network enhanced with three further TAG Heuer boutiques
(Guildford, Brighton and Southampton) and refurbishment of Breitling Trafford

§ Refurbishment of Mappin & Webb Regent Street

 

 

Outlook

 

 

·      Reflecting strong trading in Q3 FY22, margin accretive sales
growth of other luxury watch brands and price increases implemented by certain
brands, the Group now expects full year revenue and profit to be towards the
top end of the upgraded guidance announced at 9 November 2021.  Other
guidance remains unchanged

·      Our guidance reflects that we do not expect any significant
change in market conditions in the balance of the fiscal year

·      The Group has an exciting pipeline of confirmed store projects
for the remainder of the fiscal year:

o  Mayors Boca Raton, Florida refurbishment

o  Opening of new flagship store in Kenwood Towne Center, Cincinnati, Ohio

o  Three new mono-brand boutiques in the UK

·      Furthermore, the Group has committed to the following projects in
FY23:

o  New flagship store in American Dream, New Jersey

o  Watches of Switzerland store in Battersea, London

o  Continued roll out of UK Goldsmiths Luxury elevated store formats

o  Further elevation of the Mayors network in Florida

o  Expansion of the mono-brand footprint in the UK and US

o  Entry into the European market through the opening of six mono-brand
stores in Sweden, Denmark and Republic of Ireland

 

 

Brian Duffy, Chief Executive Officer, said:

 

"I am pleased to report continued strong momentum for our Group following a
successful Christmas trading period.  We have delivered impressive growth in
both luxury watches and luxury jewellery in both the UK and US markets
demonstrating the value of our portfolio of world leading partner brands.

 

"I am also pleased to report a strong sales performance of the five stores
acquired in the year and a great contribution from our new colleagues.

 

"We have announced today our entry into the European market with mono-brand
boutiques agreed in Sweden, Denmark and Republic of Ireland providing our
Group with further geographic diversification in line with our Long Range
Plan.

 

"Having received its £3.0 million donation in the period, The Watches of
Switzerland Foundation has now begun putting the proceeds towards providing
essential support in the communities where we live and work in the UK and in
the US.

 

"Furthermore, in recognition of our colleagues' hard work and to ensure they
have the opportunity to share in the success we deliver as a business, we are
pleased to have provided all our colleagues with a gift of 50 free shares and
access to employee share save schemes in the UK and US.

 

"Strong trading to date, revised pricing by certain brands and visibility of
supply for calendar 2022 all support our expectation to perform towards the
top end of our full year guidance.  Demand in our category continues to
outstrip supply and we remain confident in the future of our business and
achieving the goals laid out in our Long Range Plan."

 

 
Q3 FY22 Revenue performance by geography
 
                Q3 FY22       Q3 FY21       Q3 FY22 vs Q3 FY21              Q3 FY22 vs Q3 FY20
                13 weeks to   13 weeks to   Reported                        2-year reported  2-year constant currency

                30 Jan 2022   24 Jan 2021   YoY %       Constant currency   YoY %             YoY %

 (£million)                                             YoY %

 UK             223.5         186.1         +20.1%      +20.1%              +22.0%           +22.0%
 US             124.6         86.5          +44.0%      +44.6%              +67.0%           +72.3%
 Group Revenue  348.1         272.6         +27.7%      +27.9%              +35.0%           +36.5%

 
 
Q3 FY22 and 9M FY22 Revenue performance by category  (reported)
 
                   Q3                                  9M
                   13 weeks to   13 weeks to   YoY %   39 weeks to   39 weeks to   YoY %

                   30 Jan 2022   24 Jan 2021           30 Jan 2022   24 Jan 2021

 (£million)
 Luxury watches    279.8         231.3         +21.0%  788.7         593.4         +32.9%
 Luxury jewellery  41.8          22.2          +88.4%  82.5          48.5          +70.2%
 Other             26.5          19.1          +38.6%  63.1          44.9          +40.4%
 Group Revenue     348.1         272.6         +27.7%  934.3         686.8         +36.0%

 
 
YTD FY22 Revenue performance by geography
 
                9M FY22       9M FY21       9M FY22 vs 9M FY21                9M FY22 vs 9M FY20
                39 weeks to   39 weeks to   Reported                          2-year reported   2-year constant currency

                30 Jan 2022   24 Jan 2021   YoY %        Constant currency     YoY %            YoY %

                                                        YoY %

 (£million)

 UK             642.2         480.2         +33.7%      +33.7%                +28.2%           +28.2%
 US             292.1         206.6         +41.4%      +47.8%                +57.4%           +69.0%
 Group Revenue  934.3         686.8         +36.0%      +38.0%                +36.1%           +39.2%

 

 

Q3 FY22 Results Conference call

A conference call for analysts and investors will be held
at 9.00am (UK time) today. To access the webcast, please use the following
details:

 

 

Conference call: United Kingdom (Local):        020 3936 2999

All other locations:
 
+44 20 3936 2999

Participant access
code:
866937

 
 
 

 

Contacts

The Watches of Switzerland Group

Bill Floydd, Chief Financial
Officer
              +44 (0) 207 317 4600

Caroline Browne, Group Finance
Director
                                               +44
(0) 116 2817 420

investor.relations@thewosgroup.com (mailto:investor.relations@thewosgroup.com)
 

 

Headland

Lucy Legh / Rob Walker / Joanna Clark
 
          +44 (0) 20 3805 4822

wos@headlandconsultancy.com (mailto:wos@headlandconsultancy.com)

 
 
About the Watches of Switzerland Group

The Watches of Switzerland Group is the UK's largest luxury watch retailer,
operating in both the UK and US, comprising five prestigious brands; Watches
of Switzerland (UK and US), Mappin & Webb (UK), Goldsmiths (UK), Mayors
(US) and Betteridge (US), with a complementary jewellery offering.

 

As at 30 January 2022, the Watches of Switzerland Group has 171 stores across
the UK and US including 51 dedicated mono-brand boutiques in partnership with
Rolex, TAG Heuer, Breitling, OMEGA, Tudor, Audemars Piguet, Grand Seiko,
Bvlgari and FOPE and has a leading presence in Heathrow Airport with
representation in Terminals 2, 3, 4 and 5 as well as seven retail websites.

 

The Watches of Switzerland Group is proud to be the UK's largest retailer for
Rolex, Cartier, OMEGA, TAG Heuer and Breitling watches.

 

Mappin & Webb holds Royal warrants as goldsmiths, silversmiths and
jeweller to Her Majesty The Queen and silversmiths to His Royal Highness The
Prince of Wales. The Mappin & Webb master jeweller has been Crown
Jeweller, custodian of the Crown Jewels of Her Majesty The Queen since 2012.

 

 

https://www.thewosgroupplc.com (https://www.thewosgroupplc.com)

 

Cautionary note regarding forward-looking statements

This announcement has been prepared by Watches of Switzerland Group PLC (the
'Company'). It includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "plans", "goal",
"target", "aim", "may", "will", "would", "could" or "should" or, in each case,
their negative or other variations or comparable terminology. They appear in a
number of places throughout this announcement and the information incorporated
by reference into this announcement and may include statements regarding the
intentions, beliefs or current expectations of the Company Directors or the
Group concerning, amongst other things: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy and future prospects; (ii) business and
management strategies, the expansion and growth of the Group's business
operations; and (iii) the effects of government regulation and industry
changes on the business of the Company or the Group.

 

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
presentation.

 

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.

 

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 which
are described in the Annual Report and Accounts 2021 in Risk Management and
Principal Risks and Uncertainties.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTKKLFBLLLXBBE