In major news on UK stocks, Watches of Switzerland Group (GB:WOSG) soared by nearly 10%, as of writing, despite the fact that the FY24 profits dropped due to difficult market conditions. The company’s statutory profit after tax declined by 40% year-over-year to £92 million. Nonetheless, the company is currently witnessing stability signs in the UK watch market and sees higher sales and profitability in FY25.
Investors found solace in the company’s ‘cautiously optimistic’ guidance, resulting in a rally in the share price. Year-to-date, WOSG stock has slumped by over 35%, mainly triggered by the company’s profit warning for FY24 issued in January.
Watches of Switzerland (WoS) is a global manufacturer and retailer of top-tier luxury watch brands such as Rolex, Cartier, Chopard, Hamilton, and Longines.
Insights from WoS FY24 Results
In FY24, Watches of Switzerland reported a 2% year-on-year growth in its revenues to £1.54 billion on a constant currency (CC) basis. Revenues were flat based on reported rates. Among its segments, Luxury Watches grew by 3% on constant currency, mainly driven by the U.S. market. This segment contributed around 87% to the company’s total revenues. Meanwhile, Luxury Jewellery’s sales decreased by 13% year-over-year in constant currency but showed improvement compared to the previous quarter.
Regionally, revenues from the U.S. grew by 11% (CC), offset by a 5% decline in the UK and Europe.
In terms of outlook, Watches of Switzerland is projecting an increase of 9-12% at constant currency for its FY25 revenues, along with a growing adjusted EBIT margin. The adjusted EBIT margin for FY24 was 8.8%, down from 10.7% in FY23.
What is the Price Target for Watches of Switzerland?
According to TipRanks’ analyst consensus, WOSG stock has a Moderate Buy rating based on five Buy and three Hold recommendations. The WOSG share price target is 6,757.30p.
