Watches of Switzerland Group Sees Strong First Half Revenue Growth Driven by Luxury Demand

The Watches of Switzerland Group reported robust financial performance for the first half of FY26, covering the 26 weeks leading up to late October. The luxury retailer announced a significant group revenue of £845 million, marking a 10% increase at constant currency and an 8% rise at reported rates. This impressive growth was attributed to the sustained strong demand for luxury watches, which continues to outstrip supply. Furthermore, the company anticipates H1 FY26 adjusted EBIT to fall between £66 million and £68 million, with an expected EBIT margin decline of approximately 50 basis points compared to the previous year, consistent with their full-year guidance.

Delving into specific segments, luxury watches revenue saw a healthy 10% increase at constant currency, mirroring the growth in luxury jewellery revenue. Luxury jewellery now constitutes 12% of the group's total revenue, with luxury branded jewellery showing particularly strong performance. The Certified Pre-Owned (CPO) segment also continued its strong trajectory, performing in line with expectations and reinforcing the company's established position in this market. Notably, Rolex Certified Pre-Owned, now the group’s second-largest brand, has been fully integrated into all US Rolex agencies, with plans already underway for its expansion into the remaining UK agencies. Group e-commerce revenue also registered solid growth, up 16% year-on-year.

The United States market proved to be a significant growth engine for the group, with US revenue reaching £409 million. This represents a substantial 20% increase at constant currency and 15% at reported rates, driven by sustained growth within its core business operations. Luxury watch sales across all brands and price points remained strong throughout the region. Additionally, Roberto Coin Inc.'s wholesale sales saw a 16% rise in constant currency and 12% at reported rates, following a positive market reception to its new product lines and recent advertising campaign.

The strategic implementation of shop-in-shop branded displays for Roberto Coin products within the group's Mayors retail channel has been exceptionally successful, leading to a more than doubling of sales compared to the prior year. The company sees a clear opportunity to extend this successful concept to its wholesale partners. While acknowledging the 39% US tariff on the landed cost of Swiss imports, implemented since August 7, 2025, the Watches of Switzerland Group stated it is closely monitoring tariff developments and brand responses. To date, no significant changes in consumer behaviour have been observed.

In the UK market, revenue climbed to £436 million, a 2% increase or a more robust 5% when adjusted for showroom closures. The company reported a "good performance in a challenging retail environment," highlighting strong momentum within its flagship boutiques, with Rolex Old Bond Street notably outperforming, and positive trading across recent investment projects. The group's ongoing focus on enhancing returns has led to the optimisation of its UK showroom footprint, with closures over the past 12 months impacting UK sales by 3%.

A notable strategic shift involves the complete exit from its European business, which the company first entered in 2022, focusing primarily on Scandinavia. This European venture had evidently constituted a minor portion of the group's operations. With the US market booming and the UK showing signs of recovery, the group is now strategically concentrating its efforts and resources on these two core markets.

Despite acknowledging an "uncertain economic and geopolitical backdrop," the Watches of Switzerland Group expressed confidence, reiterating its FY26 guidance originally provided in July, thanks to the strong momentum experienced in the first half of the year. This guidance is predicated on current US tariff rates and the brand partner and consumer responses to these tariffs observed thus far. The company remains optimistic about delivering another year of strong sales growth and further solidifying its leadership position in the luxury watch and luxury jewellery retail sectors.