Watches of Switzerland Group PLC (LSE: WOSG) provided reassurance to investors in May with its full-year financial results, revealing a slight year-on-year decline in profits despite stagnant sales, which was better than anticipated.
The previous year saw a notable acquisition by major supplier Rolex, perceived as a potential threat to specialty luxury watch retailers like Watches of Switzerland (WoS). However, aside from a disappointing performance in the UK market, the company’s overall outlook remained cautiously optimistic.
According to Deutsche Bank’s forecasts, WoS is expected to report pre-tax profits of £129 million, slightly exceeding consensus estimates of £124 million, marking a 19% decrease from the previous year.
The UK market appears to be the weakest link, with predicted profits of £62.1 million, reflecting a significant 37% year-on-year decline. Conversely, the US market is anticipated to remain steady at £72.4 million, supported by increased retail space and product availability.
Despite the initial shock from the Rolex acquisition, Watches of Switzerland’s shares have yet to fully recover, but optimism persists that a potential beat on earnings expectations could bolster investor confidence moving forward.
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