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Watches of Switzerland (WOSG.L) said it has ended its 2022 financial year with a bang as it benefited from strong demand for luxury watches both in Britain and the US.
The retailer, which sells Rolex, Patek Philippe and Audemars Piguet watches said global sales rose 40% to £1.23m ($1.53m) after UK and US revenue rose by 36% and 48% respectively.
Sales of the group's luxury jewellery were up 86% on the previous year due to a strong market and continued improvement in ranging, while incremental growth from the group’s Betteridge acquisition and the opening of its first BVLGARI mono-brand boutique also provided a bump.
The UK accounted for two thirds of sales, rising by 47% to £168m in the year ended 1 May, and sales in America grew by 50% to £136m.
"We are pleased to report a strong quarter of 48% growth to finish what was an outstanding year for the group," said Watches of Switzerland CEO, Brian Duffy. "We have delivered another record year of revenue and profitability as we continue to progress our long range plan."
Shares in the British company were down 1% in afternoon trade in London on Wednesday.
Looking ahead it expects revenue between £1.45bn to £1.5bn for the new financial year from May 2022 to April 2023.
Watches of Switzerland said the forecast reflects current visibility of supply of key brands and confirmed showroom refurbishments, openings and closures and "recovery in footfall and airport traffic".
"We enter FY23 [full-year 2023] with visibility of product supply for super high demand brands for the remainder of the 2022 calendar year and an exciting programme of new products and marketing from other brands," Duffy added. "We have a strong pipeline of showroom projects, and we expect an ongoing recovery in footfall and airport traffic.
Luxury brands, unlike other consumer brands face less restraint by shoppers amid soaring inflation due to affluent customers who are willing to pay higher prices for designer goods.
Russ Mould, investment director at AJ Bell, said: "If you’ve relatively wealthy the current inflationary pressures seen around the world are unlikely to have changed your lifestyle.
"Watches of Switzerland has done extremely well in the UK and US and is now expanding into Continental Europe, suggesting there is still a considerable growth opportunity for the business.
"A year ago, there was talk we could see a new era of spending under the banner of the ‘roaring Twenties’. Wealthier individuals stuck indoors during the pandemics would be itching to return to their former lavish lifestyle of yachts, weekends away and flash parties.
"There is every reason to believe this will still happen, even against a backdrop of high inflation. Therefore, it is easy to see why luxury goods companies remain relatively upbeat when so many other businesses are way more cautious about consumer spending."
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