Rolex vendor shares soar after robust U.S. gross sales—regardless of it being an ‘underdeveloped market’

May 16, 2024 | blog

Watches of Switzerland Group Plc shares soared after robust gross sales within the US helped the watch retailer report higher outcomes than buyers had feared.

The high vendor of Rolex watches within the UK noticed US gross sales soar 14% in its fiscal fourth quarter. That helped whole gross sales rise 3% — greater than analysts anticipated — to £380 million ($482 million) within the interval ended April 28. 

The shares rose as a lot as 19% in London, the largest intraday transfer since November. They have greater than halved in 2024 on considerations it may lose market share after Rolex purchased rival watch retailer Bucherer AG, marking the highest Swiss model’s first important transfer into promoting its personal merchandise.

“Sales in the US were really strong,” Chief Executive Officer Brian Duffy mentioned in an interview Thursday. “As we’ve said all along, it’s an underdeveloped market.”

The firm mentioned gross sales of used watches, together with Rolex fashions beneath the Swiss watchmaking large’s ‘certified pre-owned’ program, doubled within the interval from the prior yr. Sales of branded jewellery have been additionally stronger than anticipated as demand rebounded, Duffy mentioned. 

“Investors should cheer more resilient than feared fourth quarter sales,” Jefferies analyst James Grzinic wrote in a notice, citing each ends in the UK and US.

Watches of Switzerland warned earlier this yr that gross sales and revenue can be weaker than anticipated because it wasn’t allotted as many gold and different valuable steel watches from Rolex and as UK customers turned extra cautious.

UK customers selected to spend their cash on journey and hospitality as a substitute so demand for dearer watches dropped, Duffy mentioned.

The firm reiterated its long-term goal of greater than doubling gross sales and earnings earlier than curiosity and taxes by 2028, and mentioned it expects gross sales of £1.67 billion to £1.73 billion in 2025. Analysts had been anticipating £1.65 billion.

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