Shares in The Watches of Switzerland Group (WOSG) are up by 22.6% in this morning’s trading, taking the price to 403p, just below the 411p the stock last reached in January this year before the Coronavirus pandemic struck.
Through the covid quarter, WOSG had to close all of its stores in the UK and USA, affecting Mappin & Webb, Goldsmiths, Watches of Switzerland, Mayors and all monobrand boutiques operated by the group.
Its share price plunged to a low of 170.8p in March.
Ecommerce rose throughout the lock down, and the share price has been buoyed since stores started reopening in June with strong pent up demand driving sales in all markets outside prime tourist-driven locations like central London and London airports.
In a trading update today, the organisation revised upwards its forecast for its second quarter, the 13 weeks ending 25 October, saying that revenue for the first 10 weeks of Q2 has been stronger than expected at £202.7 million, up 20.2% in constant currency and 18.3% in reported terms, relative to the prior year.
Ecommerce sales for the quarter so far are up by 50%, contributing to a 12.6% rise in sale in the UK to £145.1 million for the 10 week period and growth of 43.4% in the United States (at constant currency) to £57.7 million.
“We are very pleased with the strong Q2 performance we are delivering in what continue to be unprecedented market conditions. Our teams have done a fantastic job, responding positively and enthusiastically to these conditions, turning challenges into opportunities, while prioritising the health and safety of colleagues and clients,” says WOSG 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,” he continues.
Looking ahead, Mr Duffy is cautiously optimistic. “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,” he says.