AUS
NZ
UK
CA
USA
IND
Summary
- Watches of Switzerland Group generated revenue of £202.7 million, which increased by 18.3 percent year on year in Q2 FY21 to date.
- It expects the FY21 revenue to range between £880.0 million and £910.0 million.
- Mulberry Group stated the sales were down by 29 percent year on year for 26 weeks 29 March 2020 to 26 September 2020.
- The digital sales were up by 69 percent year on year during the 26 weeks.
Watches of Switzerland Group PLC (LON:WOSG) and Mulberry Group PLC (LON:MUL) are two consumer stocks. Shares of WOSG touched its 52-week high of GBX 415.00 on 6 October 2020 after the Group reported robust performance in a trading update for Q2 FY21. Shares of WOSG and MUL were up by close to 23.84 percent and 5.96 percent, respectively from their last closing price (as on 6 October 2020, before the market close at 1:30 PM GMT+1).
Watches of Switzerland Group PLC (LON:WOSG)
Watches of Switzerland Group PLC is a UK based company that has partnered with Swiss luxury watch brands. It operates in the US and UK under the brand that includes Watches of Switzerland (UK and US), Mappin & Webb (UK), Goldsmiths (UK) and Mayors (US). It markets and sells watches such as Rolex, Patek Philippe, Audemars Piguet, Cartier, Omega, Breitling, among other brands. The Group operates 135 stores, and it is included on the FTSE-250 index.
Brands under the portfolio
(Source: Group website)
Q2 FY2021 trading update as reported on 6 October 2020
In the first ten weeks of Q2 FY21, the Group generated revenue of £202.7 million, which increased by 18.3 percent year on year. The UK sales stood at £145.1 million in Q2 FY21 to date that was up by 12.6 percent year on year. The UK e-commerce sales increased by more than 49.9 percent in Q2 FY21 to date. The UK retail sales were mainly driven by domestic sales that partially offset the sales lost due to the decline in tourist sales. The airport and tourist sales in the UK accounted for 9.2 percent of the Group sales in Q2 FY21 to date, which was 32.5 percent of the Group sales in the same period last year. The performance of the regional stores was better than the London stores as it experienced lower footfall. The US reported Q2 FY21 to date revenue of £57.7 million, which was up by 35.2 percent year on year. The sales of luxury watches have outperformed, and luxury jewellery has done well. The new products launched have added positively to the total sales. On 1 September 2020, the Group acquired Analog Shift, a retailer of vintage and pre-owned watches in the US. Watches of Switzerland Group opened Tudor Boutique on 25 September 2020, in White City London and opened a new Rolex Room in Watches of Switzerland Knightsbridge showroom.
FY2020 Highlights
Share Price Performance Analysis
1-Year Chart as on October-6-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Watches of Switzerland Group PLC's shares were trading at GBX 413.00 and were up by close to 23.84 percent against the previous closing price (as on 6 October 2020, before the market close at 1:30 PM GMT+1). WOSG's 52-week High and Low were GBX 415.00 and GBX 160.00, respectively. Watches of Switzerland Group had a market capitalization of around £798.58 million.
Business Outlook
Watches of Switzerland Group expects the FY21 revenue to range between £880.0 million and £910.0 million, which is better than the previous guidance. The adjusted EBITDA and EBITDA margin would improve by 1 percent to 1.5 percent from the last year's margin. The net debt would lie in the range of £80.0 million to £100.0 million, and the capital expenditure would be in between £28.0 million to £30.0 million.
Mulberry Group PLC (LON:MUL)
Mulberry Group PLC is a UK based luxury brand company. The Group designs and manufactures footwear, luggage, ready-to-wear and footwear. Mulberry runs 120 stores in 25 countries that are either owned or partnered.
Trading activity for 26 weeks from 29 March 2020 to 26 September 2020
The business activity has been better than expected since the start of FY21. The Group revenue fell by around 29 percent year on year for 26 weeks from 29 March 2020 to 26 September 2020. The Group is experiencing improvement in the trading activity since it has started reopening stores. The Digital revenue has surged by 69 percent year on year during the reported period, and the Asia Pacific sales were up by 27 percent year on year. As on 25 September 2020, Mulberry has net cash of £8.0 million.
FY2020 results (ended 28 March 2020) as reported on 5 October 2020
(Source: Group website)
The Group revenue stood at £149.3 million in FY20, which fell by 10 percent year on year from £166.3 million in FY19. The group revenue was impacted by covid-19 towards the end of the financial year and excluding the impact of covid-19 it was down by 6 percent. The operating loss widened to £43.0 million in FY20 from £4.9 million in FY19.
Performance by segment and region
(Source: Group website)
Digital sales were £36.3 million in FY20, which fell by 2 percent year on year from £36.9 million a year ago. Store sales declined by 9 percent year on year to £89.1 million in FY20 from £97.9 million in FY19. Wholesale & Franchise sales stood £23.9 million in FY20, which was down by 24 percent year on year from £31.5 million in FY19. Based on the regional performance, the UK division sales were £98.7 million that was down by 14 percent year on year in FY20. The Asia Pacific sales improved by 15 percent year on year to £21.4 million in FY20. The Rest of the world sales stood at £29.2 million and were down by 12 percent year on year in FY20.
Strategy Pillars of Mulberry Group
Share Price Performance Analysis
1-Year Chart as on October-6-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Mulberry Group PLC's shares were trading at GBX 160.00 and were up by close to 5.96 percent against the previous closing price (as on 6 October 2020, before the market close at 1:30 PM GMT+1). MUL's 52-week High and Low were GBX 320.00 and GBX 115.00, respectively. Mulberry Group had a market capitalization of around £90.72 million.
Business Outlook
In the second half of the FY20 before the impact of covid-19, the Group was on track to report an operating profit. The onset of the pandemic affected business performance severely. It highlighted that the future remains highly uncertain with low footfalls and social distancing norms. The Group highlighted that tourism would be negligible in big cities and that would impact the sales in the near future. The Group has taken some key actions that should support business activity such as implementing the cost reduction programme, launching the new global pricing strategy and establishing a digital platform to make up for the sales lost by the closure of the outlets. Mulberry expects the losses to be reduced in FY21.
