Watches of Switzerland Group PLC (LON:WOSG) upgraded full-year guidance after starting the third quarter well and swinging to an interim profit.

The luxury watches retailer now expects revenue to be £900-925mln, up from £880-910mln guided previously, with an underlying (EBITDA) margin 1.5-2% higher than last year, against a 1-1.5% rise previously forecast.

READ: Watches of Switzerland raises full-year expectations after strong quarter

Moreover, based on the planned elevation of Goldsmiths luxury stores and a review of the frequency of change of branded furniture, depreciation will increase by £5.4mln.

Finally, net debt at year-end is estimated to be £60-80mln instead of £80-100mln.

The firm plans to repay money received under the UK furlough scheme while it has planned a new elevated store design for Goldsmiths luxury locations to be rolled out from Summer 2021.

In the seven weeks to December 13, revenue jumped 12% despite the UK store network only traded 44% of potential trading hours alongside the reduced international clientele and shopping centre traffic.

Trading was driven by e-commerce in the UK and strong momentum across Mayors in Florida and Georgia and in Watches of Switzerland stores in New York.

In the 26 weeks to October 25, the FTSE 250 group swung to a £36mln profit before tax from last year’s £9mln loss, although revenue dipped 3% to £414mln, thanks to state support and lower store costs.

“Watches of Switzerland, is in our view a hybrid mix of hard luxury goods and best in class retail execution with their proprietary customer relationship management system and selective refits to stores,” analysts at Shore Capital commented.

“We continue to highlight the US opportunity as significant by leveraging the UK business into the fragmented US market and scaling the group further.”

“As a custodian of luxury brands, Watches remains strategically well placed.”

Shares rose 3% to 540p on Thursday morning.

–Adds analyst comment, shares–

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