The Watches of Switzerland Group PLC (WoS) has published its financial results for the first half (H1) of FY25, reporting a 4% revenue increase in constant currency to £785 million.
This growth reflects improved performance in the second quarter (Q2) and contributions from the acquisition of Roberto Coin. However, profitability has been affected by rising costs and changes in product mix.
Key Financial Highlights
Revenue Performance
- Group Revenue: £785 million, up 4% in constant currency and 3% at reported rates.
- UK & Europe: £430 million, a 1% decline, reflecting stabilisation after a challenging prior year.
- US: £355 million, an 11% rise in constant currency, supported by inventory adjustments and demand recovery.
- Luxury Watches: Revenue decreased by 2% in constant currency, mainly due to one-off increases in inventory levels in Q1.
- Luxury Jewellery: Revenue more than doubled, increasing 104%, with £51 million contributed by the acquisition of Roberto Coin.
Profitability Metrics
- Adjusted EBITDA: £87 million, a 7% decline year-on-year, with the EBITDA margin narrowing to 11.1% (H1 FY24: 12.3%).
- Adjusted EBIT: £66 million, down 10%, influenced by rising costs and a changing product mix.
- Statutory Operating Profit: £60 million, representing a 23% decrease year-on-year.
- Free Cash Flow: Declined to £28 million from £57 million in H1 FY24, driven by seasonal working capital increases.
Strategic Investments and Debt
- Capital Expenditure: £44 million invested in showroom expansions, including flagship projects in London, Manchester, and the US.
- Net Debt: £120 million, reflecting investments in acquisitions such as Roberto Coin and Hodinkee.
Strategic and Operational Developments
Geographic and Product Diversification
WoS reported increased revenue contributions from the US, now comprising 45% of total sales. The integration of Roberto Coin has expanded its branded luxury jewellery portfolio, while the acquisition of Hodinkee enhances its digital presence in the luxury watch segment.
Showroom Investments
In H1, WoS completed projects including:
- A new Patek Philippe showroom in Greenwich, Connecticut.
- Relocations and upgrades in Milton Keynes and Cheltenham.
Planned openings for the second half of the year include a flagship Rolex boutique on Old Bond Street, London.
Rolex Certified Pre-Owned (CPO) Programme
Since its 2023 launch, the Rolex Certified Pre-Owned programme has shown positive performance, with Rolex becoming WoS’s second-largest luxury watch brand in this category. Further in-store expansions are planned to meet demand.
E-commerce and Digital Growth
E-commerce revenue declined by 10%, reflecting changing consumer behaviour. However, the integration of Hodinkee aims to strengthen WoS’s digital sales channels, particularly in the US market.
Industry Implications
The results suggest a mixed outlook for the luxury watch and jewellery market. While profitability has been influenced by macroeconomic conditions and evolving consumer preferences, strategic showroom investments and acquisitions highlight WoS’s commitment to reinforcing its market position. Key industry trends include the rise of pre-owned watch sales, increasing demand for luxury branded jewellery, and the integration of digital platforms to enhance customer engagement.
