By Anastasiia Kozlova
(Reuters) -Swiss duty-free retailer Avolta reported a slightly better-than-expected annual turnover on Wednesday, driven by growth across all regions and solid leisure demand.
Shares of the company, which runs shops at airports, on cruise liners, in seaports, and other tourist locations worldwide, were up 3.6% in pre-market trading on Julius Baer.
The “travel (sector) continues to show robust spending trends despite heightened uncertainties,” analysts from Vontobel said.
Following recent industry comments about a slowdown in domestic travel in the U.S., Avolta’s 6.3% organic growth in 2024 offers confidence that it can reach its targets in 2025, the analysts said.
For 2025 and the medium term, Avolta is targeting core turnover growth of 5-7% per year at constant exchange rates, along with an annual improvement in core profit margins of 20-40 basis points.
Avolta’s stock surged 24% in the past six months, driven by investor optimism about rising passenger numbers, higher spending per traveler, and market share expansion.
The growth is further supported by robust annual traffic figures, which saw a 10.4% jump from 2023 levels and also exceeded pre-pandemic (2019) numbers by 3.8%, according to a report from the global aviation body IATA in January.
“There is every indication that demand for travel will continue to grow,” IATA said.
“Looking ahead to 2025 … our diversified presence in more than 70 countries gives us confidence in delivering on our medium-term targets and generating shareholder value,” Chief Executive Xavier Rossinyol said in a statement.
The Basel-based company announced a dividend of 1 Swiss franc per share, marking a 43% increase from a year earlier.
The company posted an annual core turnover of 13.47 billion Swiss francs ($15.24 billion), up from 12.53 billion francs a year earlier, and slightly ahead of analysts’ forecast of 13.43 billion francs in a poll by Vara Research.
($1 = 0.8837 Swiss francs)
(Reporting by Anastasiia Kozlova in Gdansk, additional reporting by Amir Orusov; Editing by Sherry Jacob-Phillips)
