Watches of Switzerland Group has raised its annual revenue growth and operating margin expectations after reporting a 15% increase in first-half sales, supported by stronger trading across its British and American businesses.
The luxury retailer generated revenue of £974m during the 26 weeks to 1 November 2026, compared with £845m during the equivalent period last year.
UK sales increased 9% to £473m, while revenue in the United States reached £501m, representing growth of 22% at constant exchange rates.
Management now expects full-year revenue growth of between 7% and 10% at constant currency, compared with its previous forecast of 5%–10%.
It has also increased the lower end of its adjusted operating profit margin guidance, targeting an improvement of 60–80 basis points against the previous financial year. The earlier range was 40–80 basis points.
The first-half trading update indicates that adjusted operating profit is expected to reach £87m–£89m, approximately 28% above the previous year’s level.
Those figures remain provisional ahead of the publication of detailed half-year financial results in December.
Chief executive Brian Duffy said the company’s sales growth had translated into improvements in profitability and cash generation despite uncertainty across the wider economy.
The company reported net debt of £24m at 1 November, compared with £112m a year earlier, a reduction of £88m.
Jewellery and US sales support growth —
The United States is now the group’s largest market, accounting for slightly more than half its revenue during the first six months.
American retail sales increased 24% at constant currency, with the acquisition of Deutsch & Deutsch contributing to growth.
That acquisition expanded Watches of Switzerland’s presence in the luxury jewellery market, adding to its established business selling high-end watches.
Across the group, luxury jewellery revenue increased 19% at constant currency, exceeding the 15% growth recorded in luxury watches.
Jewellery sales through the company’s own showrooms increased 31%, making the category an important contributor to the improvement in trading.
Wholesale sales of Roberto Coin jewellery rose 15% at constant currency. The company also opened its first two partner shop-in-shop locations for the brand during October.
In the UK, sales growth was spread across flagship boutiques and regional cities rather than being concentrated in a small number of locations.
The company reported particularly encouraging trading in luxury jewellery and certified pre-owned watches.
Investment in its British estate included an expanded Rolex boutique in Glasgow and refurbishments of Goldsmiths showrooms in Watford, Chelmsford, and Exeter.
American showroom projects were also completed in New Jersey and Georgia.
Profitability improves ahead of Christmas —
The stronger sales performance has been accompanied by an expected improvement of 80–100 basis points in first-half adjusted operating profit margins.
Management attributed the change to increased revenue and the ability to generate higher earnings through its existing operating structure.
The improved debt position also provides greater financial flexibility while the group continues investing in stores and international expansion.
Nevertheless, Watches of Switzerland has adopted a more cautious outlook for the second half than its recent sales performance might otherwise suggest.
The remaining period includes one fewer trading week than the comparable period last year, while January will mark the first anniversary of the Deutsch & Deutsch acquisition.
As a result, management expects reported revenue growth to moderate compared with the first half, alongside a smaller improvement in operating margins.
Capital expenditure guidance remains unchanged at £60m–£70m, with the company continuing to target free cash flow conversion of approximately 70%.
Duffy said demand remained positive in both principal markets entering the Christmas trading period, although the company would continue planning cautiously in response to economic conditions.
Detailed financial results for the 26 weeks to 1 November are scheduled for publication on 10 December 2026.
