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.
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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.
