Watches of Switzerland soars as wealthy Americans snap up Rolex, TAG Heuer timepieces
Strong U.S. Demand Drives Growth for Watches of Switzerland
By Prerna Bedi
May 14 (Reuters) - Watches of Switzerland 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. Market Performance and Revenue Growth
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.
Affluent Americans Boost Luxury Sales
"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."
U.S. Overtakes Britain as Top Revenue Contributor
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.
Analyst Insights on U.S. Market Trends
“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."
Impact of Tariffs and Price Increases
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.
Share Price Recovery and Market Outlook
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.
Exposure to Global Markets
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.
Profit Forecast and Future Sales Growth
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.
Sales Growth Outlook for 2026/27
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)
(Reporting by Prerna Bedi in Bengaluru; Editing by Janane Venkatraman, Emelia Sithole-Matarise and Hugh Lawson)
