Watches of Switzerland’s Jewelry Sales More Than Doubled in Q4

London—Watches of Switzerland closed out its fiscal year on a high note, posting double-digit revenue growth for the fourth quarter and the full year.

“We have delivered another record year of revenue and profitability as we continue to progress our long-range plan,” said CEO Brian Duffy.

"We delivered an outstanding performance in both the U.S. and U.K., supported by broad-based sales growth across our portfolio of world-leading partner brands and driven by domestic clientele.”

Here are five important takeaways from its recent earnings report.

Watches of Switzerland had a good year.

In the fourth quarter ending May 1, the company posted £304 million ($378 million) in total revenue, up 48 percent year-over-year.

For the full year, revenue totaled £1.24 billion ($1.54 billion), a 40 percent year-over-year increase.

Sales in the luxury watches category were up 33 percent year-over-year in the quarter and up 32 percent for the full year.

Full-year online sales grew only 5 percent year-over-year, but that is compared with last year when the retailer’s stores were closed for 26 weeks due to COVID-19 lockdowns.

Compared with fiscal 2020, online sales more than doubled, up 128 percent.

In the United States, Watches of Switzerland’s fourth-quarter revenue totaled £136 million ($169 million), up 50 percent year-over-year.

For the full year, U.S. revenue rose 48 percent to £428 million ($532 million).

The retailer predicts another good year ahead.

Pandora and Brilliant Earth both forecast a slowdown ahead in their recent first quarter results, but Watches of Switzerland has a more bullish outlook.

The company said it is entering fiscal 2023 with “strong momentum” and expects to see a recovery in footfall and airport traffic.

“We enter FY23 with visibility of product supply for super high-demand brands for the remainder of the 2022 calendar year and an exciting program of new products and marketing from other brands,” said Duffy.

Looking ahead, Watches of Switzerland expects to see full-year revenue of £1.45 billion to £1.50 billion ($1.8 billion to $1.9 billion).

Its Q4 jewelry sales more than doubled year-over-year.

The retailer’s luxury watch offerings account for a majority of its revenue, but its luxury jewelry category has been picking up steam.

Revenue in the luxury jewelry category more than doubled in the fourth quarter, up 124 percent year-over-year. For the full year, revenue was up 79 percent.

The company acquired a number of independent jewelers last year, including Betteridge, which has stores in Greenwich, Connecticut, and Vail and Aspen, Colorado.

It scooped up Ben Bridge at Mall of America outside of Minneapolis-St.Paul and Timeless Luxury Watches in Plano, Texas.

Watches of Switzerland also opened its first Bulgari boutique, which added to the increase in jewelry sales.

Demand for its luxury jewelry offerings has been “very positive,” said Duffy.

The company is growing its U.S. footprint.

Watches of Switzerland didn’t stop at the above acquisitions. It’s been steadily growing its U.S. store network.

The retailer announced the opening of a flagship store in Kenwood Towne Center in Cincinnati, Ohio.

Another new flagship showroom will open this year in the American Dream mall in New Jersey.

There are also plans to relocate two Mayors showrooms in Florida.

Watches of Switzerland also recently refurbished its Rolex boutique at the Wynn Las Vegas, reopened Mayors Millenia in Florida, and expanded its mono-brand boutique network with the opening of Breitling Short Hills, New Jersey and Tudor Millenia in Florida.

As of May 1, the company operated 171 stores across the U.S. and the U.K., including 55 mono-brand boutiques.

The company is also expanding in Europe, opening six mono-brand boutiques in Sweden, Denmark, and Ireland, set to open in the first half of its current fiscal year.

Demand for its high-end watches continues to exceed supply.

Watches of Switzerland places its Rolex, Patek Philippe, and Audemars Piguet watches in its “super high demand” category.

Demand for these brands has continued to exceed supply, said Duffy.

The brands have been hampered by supply chain constraints, especially Rolex.

A “restricted supply” meant sales for these brands increased “modestly” compared with prior years. 

However, a limited supply of the above brands created an opportunity for other luxury watches, with sales of brands outside of these three more than doubling year-over-year.