Watches of Switzerland half-year profits have plummeted 20% as consumers continue to pull back on spending for luxury products amid the high inflationary environment.
Statutory pre-tax profits for the luxury watch retailer dropped to £67m in the 26 weeks to 29 October 2023, down from £83m last year, although it pointed out its adjusted EBIT of £73m was ahead of previous guidance.
It comes as Watches of Switzerland’s sales for the period remained flat at £761m, with 5% growth – or 11% on a constant currency basis – in its US revenue helping to offset 4% fall in UK and Europe.
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US sales now make up 43% of its total.
Watches of Switzerland chief executive Brian Duffy said: “The consumer environment in the UK continues to be more challenging and UK and Europe revenue was down 4% in the period, impacted by the timing of product intake in the first quarter and temporary showroom closures for refurbishment.”
Duffy added that despite the setback, the group remained on track to delivery its full-year guidance, with his confidence for the second half “underpinned by the reopening of several high revenue showrooms which were closed for upgrade [during the first half of the year]”.
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