Watches of Switzerland Sees Profits Rise Driven by US Luxury Market Demand

Watches of Switzerland has reported a significant boost in profits and revenue for the past year, with strong demand from wealthy shoppers in the United States playing a key role. US sales for the company, a prominent retailer of Rolex watches, increased by nearly a quarter in the year ending May 3, 2026, compared to the previous year.

Despite reporting 'continued pressure on consumers in the UK,' the company noted 'signs of improvement' in that market. Overall revenue for the luxury watch retailer rose 11 percent to £1.8 billion in the year to May 3, while statutory pre-tax profit climbed to £133 million from £76 million in the prior period. Operating profit saw a substantial increase of 49 percent, reaching £170 million, which met the upper end of forecasts.

During the 2026 financial year, the company completed a £25 million share buyback program in June 2025 and purchased an additional £13 million in shares. Future share buybacks will be considered on a selective basis when cash generation exceeds business requirements.

Shares in Watches of Switzerland recently reached a three-year high, trading at 778.5p on Monday, a level not seen since May 2023. This surge followed reports that the company had engaged in talks with potential buyers in recent months, contributing to a broader trend of overseas bidders targeting London-listed companies. On Tuesday morning, shares dipped slightly by 0.27 percent to 747.50p, though they have still gained over 110 percent in the past year.

Brian Duffy, chief executive of Watches of Switzerland, described FY26 as a period of "strong execution against a complex operating backdrop." He highlighted that these results were achieved while navigating "tariff-driven price and margin changes in the US and continued pressure on consumers in the UK." Duffy views the US market as a "major opportunity, with considerable potential for further growth and market share gains."

Free cash flow for the period jumped by 65 percent to £162 million, and net debt decreased to £57 million from £96 million, even after the acquisition of Deutsch & Deutsch. The company has reaffirmed its outlook for the current fiscal year, projecting revenue growth between 5 and 10 percent.

Julie Palmer, managing partner at BTG, commented on the company's performance, stating that "a year of macroeconomic uncertainty from tariff changes and war in the Middle East has not taken the shine away from this financial year for Watches of Switzerland Group." She added that "resilient sales performance in the UK and across the US has seen the luxury retailer maintain a strong bottom line, while investing in acquisitions and development of its showrooms across the globe."