Watches of Switzerland expects annual profit above market view on solid US market (updated)
14/05/2026 07:15
Rewrites paragraph 1, adds graphic after paragraph 6, background on tariffs in paragraphs 5 & 6, updates shares in paragraph 9 US market logs 24% annual revenue growth Company expects minimal direct exposure to Iran war WOS says it is monitoring potential impact on consumer sentiment Operating profit outlook for 2025/26 exceeds estimates Shares rose as much as 15.6% on Thursday By Prerna Bedi May 14 (Reuters) - Watches of Switzerland WOSG.L forecast annual profit above market expectations as wealthy American shoppers splurged on luxury timepieces and jewellery, sending shares of the third-party seller of Rolex and TAG Heuer 14% higher. U.S. revenue grew 24% in constant currency to $1.24 billion for the year ended May 3 and accounted for more than half of group sales, CEO Brian Duffy said in a statement. "The higher income cohort in the U.S. is clearly feeling good about their wealth," Duffy told Reuters in an interview. "The positive consumer sentiment around that clearly is benefiting the luxury watch and jewellery category and we see that continuing into this year." The United States overtook Britain as the group's top revenue contributor as demand recovered faster among affluent American shoppers, aided by a surge in U.S. stock markets that has boosted consumer sentiment at the top end of the market. “The U.S. market has benefited from higher average selling prices driven by price inflation by tariffs and elevated precious metal prices as well as robust spending power among higher-income shoppers,” Investec analyst Kate Calvert told Reuters. "This has translated into good demand for both watches and jewellery in the region." Watches of Switzerland last year warned of a hit to its fiscal 2026 margins from U.S. tariffs on Swiss imports as watchmakers raised prices. The company has since said that it had not seen any impact on consumer demand from U.S. tariffs. SHARES BACK AT EARLY 2024 LEVELS The share price jump on Thursday took the stock to levels last seen in early 2024. Shares in the London-listed firm have dropped more than 66% from their peak in early 2022 as luxury retailers suffered a post-pandemic boom and bust. The third-party seller of high-end watches like Patek Philippe, Audemars Piguet and Omega said it had minimal direct exposure to the Middle East but was monitoring the situation and its effect on broader consumer sentiment. It expects to report operating profit between 152 million and 155 million pounds ($205 million and $210 million) for the fiscal year ended May 3, above the 148.2 million pounds expected by analysts in a company-compiled poll. The company reports full-year results on July 14. It forecast 2026/27 sales to grow between 5% and 10% on a constant currency basis, marking a slowdown from the 13% rise it recorded in the previous fiscal year. ($1 = 0.7398 pounds) Watches of Switzerland: U.S. luxury demand lifts shares https://www.reuters.com/graphics/WATCHES%20OF%20SWITZERLAND-HOT/lgpdgbeebvo/chart.png (Reporting by Prerna Bedi in Bengaluru; Editing by Janane Venkatraman, Emelia Sithole-Matarise and Hugh Lawson) ((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;))