Watches of Switzerland has slashed its sales and profit forecast for the year as consumers continue to rein in their spending on luxury items.
The luxury watch retailer said it had a “volatile trading performance in the run-up to and beyond Christmas as the challenging macro-economic conditions” continued to hit spending across the sector.
It expects these challenging conditions to remain across its financial year, and lowered its sales forecast from £1.65bn to £1.7bn for the year to £1.53 to £1.55bn.
Watches of Switzerland also warned that adjusted EBIT margin would fall from the 10.7% achieved last year to 8.7% to 8.9% in its current financial year.
The retailer said that despite double-digit growth for its US business, the UK was “more challenged” due to an “unusually high level of promotional activity in non-branded jewellery”.
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Watches of Switzerland’s warning comes amid a slowdown in sales across the wider luxury market.
Last week, Burberry lowered is profit guidance for the year after sales dropped 7% over the golden quarter while Mulberry’s festive sales plunged 8.4%.
Watches of Switzerland chief executive Brian Duffy said: “The festive period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories such as fashion, beauty, hospitality and travel.
“Whilst we are disappointed with this trend, we are encouraged by our market share gains in both the US and UK.”
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