Watches of Switzerland shares rally on “strong Q2 performance”

Watches of Switzerland (LON: WOSG) have rallied on Tuesday’s trading as Q2 performance to date was stronger than expected.

In the 13 weeks ending 25 October 2020, the retailer’s revenue grew 20.2% to £202.7m and the group has increased guidance for full-year 2021 sales to £880-£910m, up from £840-£860m.

Despite the weaker sales in London and airports, Watches of Switzerland has reported strong domestic sales and high sales at regional stores.

Sales for the latest quarter were 12% higher at £145.1m, with e-commerce sales particularly strong at 49.9% higher than the previous year.

Luxury watches at the firm have continued to perform well and new product launches have also been stronger than anticipated.

“We are very pleased with the strong Q2 performance we are delivering in what continue to be unprecedented market conditions,” said chief executive, Brian Duffy.

“Trading momentum has further improved in Q2. Stronger than anticipated UK domestic sales are offsetting lower tourist and airport traffic, whilst regional stores are continuing to outperform London stores. Furthermore, the strong momentum we have established in the US has further accelerated. All US regions are contributing to this positive trend.

“Our guidance for the balance of the fiscal year assumes that the positive trend experienced in Q2 will be moderated by the impact of pandemic related retail disruption in the UK and the US and uncertainty in the US economy, impacting mainly in Q3. We do not assume any improvement in recent trends regarding the travel or tourist sectors.

“Looking ahead, we will continue to focus on our strategy by investing in high quality growth through selective capital projects and targeted marketing activity,” Duffy added.

Watches of Switzerland shares (LON: WOSG) are trading +23.24% at 411,00 (1250GMT).