Watches of Switzerland Group Q2 Earnings Call Highlights

Key Points

• First-half revenue rose 15%, supported by growth in the U.S. (+22% at constant currency) and U.K. (+9%); luxury jewelry revenue increased 19% and luxury watch revenue 15%.
• Watches of Switzerland raised its fiscal 2027 revenue growth outlook to 7%–10% from 5%–10%, and now expects adjusted EBIT margin expansion of 60–80 basis points. The company cautioned that Christmas trading and product allocations remain uncertain.
• First-half adjusted EBIT is expected to reach £87 million–£89 million, up about 28% year over year, while net debt fell to £24 million from £112 million a year earlier.

Watches of Switzerland Group LON: WOSG reported a 15% increase in first-half revenue and narrowed its fiscal 2027 guidance toward the upper end of its previous ranges, citing growth across its U.S. and U.K. businesses and improved profitability.

The luxury watch and jewelry retailer now expects full-year revenue growth of 7% to 10% at constant currency, compared with its previous forecast of 5% to 10%. It also expects adjusted EBIT margin expansion of 60 to 80 basis points, up from its earlier range of 40 to 80 basis points.

Chief Financial Officer Anders Romberg said the company was slightly ahead of its expectations at the halfway point of the year, but cautioned that the important Christmas trading period was still ahead.

U.S. and U.K. growth supports first-half performance

Group luxury jewelry revenue rose 19% at constant currency in the first half, while luxury watch revenue increased 15%. Retail luxury jewelry was a standout, with revenue up 31% at constant currency, Chief Executive Officer Brian Duffy said.

In the U.S., revenue rose 22% at constant currency and 23% on a reported basis. U.S. retail revenue increased 24% at constant currency, including a contribution from the acquisition of Deutsch & Deutsch. Duffy said the acquired business continued to trade well and was preparing to launch Certified Pre-Owned offerings in its showrooms ahead of holiday trading.

U.K. revenue grew 9%, with positive results nationwide. Duffy attributed the performance partly to a better market backdrop, as well as the company’s work to optimize its showroom estate, control costs and develop its product offering.

During the question-and-answer session, Duffy said watch growth was broad-based across price ranges and brands in both markets. He also said trading at the end of the first half was in line with the average for the period and that early second-half trading had remained strong.

Profit growth and lower debt

Romberg said the company expects first-half adjusted EBIT of £87 million to £89 million, an increase of around 28% from a year earlier. That would represent adjusted EBIT margin expansion of 80 to 100 basis points, which he attributed to operating leverage in both markets.

The company ended the half with net debt of £24 million, down from £112 million at the end of the prior-year first half. Romberg said the reduction reflected increased cash generation and left the group with a flexible balance sheet.

Jewelry and Roberto Coin expansion

Duffy said U.S. luxury jewelry growth was led by Roberto Coin, which performed well in the company’s showrooms following the development of shop-in-shops last year. Within the wholesale business, revenue increased 15%, he said.

The company opened two shop-in-shops with wholesale partners in the preceding month and expects to open another eight before Christmas. More than 20 are planned with partners next year, Duffy said.

In the U.K., Duffy said bridal and diamond jewelry were performing well. The introduction of lab-grown diamonds had been a positive experience, he said, with no sacrifice in average selling price as customers obtained larger diamonds for their budgets. The company is also testing lab-grown diamonds in the U.S.

Second-half outlook

Romberg said reported revenue growth is expected to be lower in the second half than in the first. The company faces one fewer trading week than in the prior-year second half, will annualize the Deutsch & Deutsch acquisition in January and expects a smaller contribution from pricing as it laps U.S. tariff-driven price increases.

Asked whether the outlook was conservative, Duffy also pointed to uncertainty around Christmas trading and product allocations, which the company would not know until around Christmas. He described the U.K. consumer as consistent and confident, but not bullish, and said the company’s guidance was its best indication of the second half.

About Watches of Switzerland Group (LON:WOSG)

Established in 2007 the Watches of Switzerland Group is the UK's largest luxury watch retailer, operating in the UK and US comprising eight prestigious brands; Watches of Switzerland (UK and US), Mappin & Webb (UK), Goldsmiths (UK), Mayors (US), Betteridge (US), Deutsch & Deutsch (US), Analog:Shift (US) and Hodinkee (US), with a complementary jewellery offering. The Group also owns the exclusive distribution rights for Roberto Coin in the US, Canada, Central America and the Caribbean. As at 3 September 2026, the Watches of Switzerland Group had 186 showrooms across the UK and US including 75 dedicated mono-brand boutiques in partnership with Rolex, OMEGA, TAG Heuer, Breitling, TUDOR, Longines, Grand Seiko, Roberto Coin, BVLGARI and FOPE and has a leading presence in Heathrow Airport with representation in Terminals 3, 4 and 5 as well as seven retail websites. The Watches of Switzerland Group is proud to be the UK's largest retailer for Rolex, OMEGA, Cartier, TAG Heuer and Breitling watches and provides clients with the finest selection of luxury timepieces from all over the major groups and independent brands together with an impressive presentation of smaller independent brands.

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