Watches of Switzerland Group Raises Sales Guidance Amid Strong Holiday Trading, Shares Fall

Watches of Switzerland (LON: WOSG) shares declined over 2% Wednesday morning despite the company upping its full-year sales guidance following a robust Q3 FY26 trading update.

The luxury watch retailer cited strong demand in both the US and UK markets, exceeding previous expectations. However, shares are currently down around 3.4%.

The company now anticipates sales growth in constant currency to be between 9% and 11%, a notable increase from the prior forecast of 6% to 10%. EBIT margin is now expected to be between -70 bps to -90 bps, versus previous guidance of flat to -100 bps. Capital expenditure remains unchanged at £65 to £70 million.

Revenue growth was propelled by sustained demand for key luxury brands, consistently outpacing supply in both the UK and US. The US market exhibited broad-based growth across various categories, brands, and price points, demonstrating the strength of the company's operating model.

The Roberto Coin marketing campaign, along with an emphasis on product ranging and merchandising, significantly contributed to sales performance in North America.

On January 22, 2026, Watches of Switzerland finalized the acquisition of Deutsch & Deutsch, which includes four Rolex-anchored showrooms in Texas. This acquisition strengthens the Group's foothold in a crucial US market and complements its existing portfolio.

The integration process is progressing smoothly, and the company anticipates realizing significant strategic benefits from this expansion.

In the UK, trading conditions for luxury watches and jewelry remained consistent with recent trends. The Rolex Old Bond Street boutique continued its strong performance, driven by a superior client experience.

The Group is leveraging insights from this showroom to enhance its luxury retail proposition across its estate. The Certified Pre-Owned business also showed encouraging performance in both the US and UK markets.

Investments in marketing, client experience, showroom development, and Hodinkee have supported the company's trading performance. US ecommerce experienced solid growth after investments in new systems and dedicated teams, with minimal further infrastructure investment expected to scale this proposition.

Brian Duffy, Chief Executive Officer, stated, “I am pleased to report another period of strong performance, building on the sales momentum established in the first half and reflecting strong trading over the Holiday period. We were also delighted to acquire Deutsch & Deutsch, comprising four Rolex-anchored showrooms in Texas with a portfolio including other key luxury watch and jewellery brands. This acquisition strengthens our presence in this key US market.”

The updated FY26 guidance reflects the impact of the Deutsch & Deutsch acquisition and the continued strong trading performance throughout Q3 FY26. The company expects EBIT margin % to improve in the second half of the year compared with the first half.

Updated guidance reflects the impact of brand margin adjustments, product mix, and one-off items relating to Roberto Coin department store debtor provisions as well as infrastructure investments in US ecommerce and Group marketing.