- Return to growth in UK and US
- Demand outstripping supply
- Management ‘mindful’ of potential US tariff changes
It has been a far from easy time for the luxury sector but high-end watch retailer Watches of Switzerland (WOSG) has bucked that trend.
Shares rallied 3% to 406p after the resilient Rolex-to-Patek Philippe purveyor reported much stronger second-half trading with a return to growth in both the US and UK.
There was also relief as the FTSE 250 company confirmed that full-year adjusted EBIT (earnings before interest and tax) is expected to meet the £148.8 million market forecast.
Reassuringly, demand for the company’s key luxury brands remains ‘strong’ and is outstripping supply on both sides of the Atlantic.
SALES TICK HIGHER
For the year to 27 April 2025, Watches of Switzerland delivered an 8% rise in sales to £1.652 billion.
That was a smidge shy of the £1.666 billion consensus estimate, yet the results confirmed a much improved second half showing after a laboured first half from the UK’s largest luxury watch retailer, with revenue growth accelerating from 4% to 12%.
WHAT DID THE CEO SAY?
‘In the US, we experienced strong momentum, delivering 19% revenue growth in the second half and 16% for the full year at constant currency,’ said Brian Duffy, CEO at the TAG Heuer-to-Breitling seller.
‘In the UK, we were pleased to see the external environment stabilise in line with our expectations, supporting revenue growth of 6% in the second half and 2% for the full year.’
Watches of Switzerland also highlighted ‘a return to normalised trading patterns in April’ following a temporary period of consumer uncertainty in response to the US administration’s initial tariff announcement.
In short, US demand in the fourth quarter appears to have recovered in more recent weeks.
Looking ahead, Duffy remains ‘confident in the strength of our business model, our strong pipeline of showroom openings and the resilience of the luxury watch category where demand for key brands continues to outstrip supply. We are of course mindful of the broader macroeconomic and consumer environment, including potential US tariff changes.’
RUNNING LIKE CLOCKWORK
Watches of Switzerland, which opened a new flagship Rolex boutique on Old Bond Street, London, during the second half, also reminded investors that the US luxury jewellery market is the largest in the world and is growing strongly.
The company’s integration of two recent acquisitions - Italian luxury jewellery brand Roberto Coin and publishing firm-to-luxury watch platform Hodinkee – also seems to be running like clockwork.
Watches of Switzerland will continue to build on the momentum in Roberto Coin, with several ‘exciting growth initiatives, including the launch of a major marketing campaign, secured locations for three mono-brand boutiques and our ecommerce website upgrade.’
