ii view: Watches of Switzerland ticking over as US outperforms

First-half trading update to 26 October

• Total currency adjusted revenues up 10% to £845 million
• US currency adjusted revenues up 20% to £409 million
• UK revenues up 2% to £436 million

Guidance:

• Continues to expect total currency adjusted revenues up 6% to 10%
• Continues to expect the adjusted profit margin for the year ahead of flat to down 1%

Chief executive Brian Duffy said:

"We delivered strong momentum in the first half of the year and are well placed for the Holiday trading period. While we remain cognisant of economic and geopolitical uncertainties in the second half, including the impact of US tariffs, we are confident in delivering another year of strong sales growth and continued progress in consolidating our leadership in luxury watch and jewellery retailing."

• Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

ii round-up:

Specialist retailer Watches of Switzerland Group (LSE:WOSG) detailed growth in sales that beat City forecasts, pushed by a better-than-expected performance for US outlets. 

Currency adjusted sales for the first half to late October rose 10% to £845 million, with a one-fifth gain in US sales to £409 million surpassing analyst estimates of £379 million.  

Shares in the FTSE 250 company rose 3% in post results trading having come into this latest news down by around a third so far in 2025. That’s comfortably below a near 5% gain for the mid-cap index year-to-date. Luxury boot seller Dr. Martens Ordinary Shares (LSE:DOCS) is up by around a fifth over that time. 

Watches of Switzerland operates seven prestigious brands including Mayors, Betteridge and online focused Hodinkee in the US and Mappin & Webb and Goldsmiths in the UK. 

The Leicestershire headquartered company continues to predict currency adjusted sales of between 6% and 10% for the current financial year, accompanied by a potential fall in the profit margin of up to 1%. Sales in the last financial year rose 8% with margins improving by 0.3%.

Gains in US sales for this latest period came all across brands and categories, aided by investments in teams, showrooms and the group’s digital offering. 

The UK luxury watch market remained stable, with the company's flagship Rolex boutique on Old Bond Street, the largest in Europe, continuing to exceed expectations.

First-half results are scheduled for 4 December. 

ii view:

Watches of Switzerland is the UK's largest retailer of Rolex, OMEGA, Cartier, TAG Heuer and Breitling watches. A portfolio of 196 stores across the UK and US includes 84 dedicated mono-brand boutiques. Luxury watches accounted for 82% of overall sales over its last financial year, with luxury jewellery a further 13%, and servicing, repairs, and insurance the balance of 5%.

For investors, US trade tariffs raising costs and potentially pressuring profit margins for the current full year cannot be overlooked. A challenged consumer has forced UK branches to close. A previous move by Rolex to buy a rival watch retailer worried investors regarding the watch retailer’s relationship with this key supplier, while Watches of Switzerland, unlike other high-end rival retailers Hugo Boss AG (XETRA:BOSS) and Doc Martens, does not currently pay a dividend.

More favourably, revenue for both regions rose during this latest period. Previous acquisitions now see online retailer Hodinkee and luxury jeweller Roberto Coin included within its portfolio. Chief executive Brian Duffy previously expressed his confidence that its relationship with Rolex would not change despite its purchase of a rival retailer, while luxury watches are arguably now seen as an investment as well as a status symbol and instrument to tell the time.

In all, exposure to what is now an area of investment interest is likely to keep the company attractive to investors, evidenced by a share price rebound from the September low. And while more cautious investors may demand further evidence of consistent growth and margin improvement in demanding circumstances, others may back management to continue the recovery. 

Positives: 

• Growing geographical diversity
• Offering exposure to hard assets in an inflationary world

Negatives:

• Uncertain economic outlook
• No dividend payment

The average rating of stock market analysts:

Buy