Luxury timepiece seller Watches of Switzerland (WOSG) clocked up record sales in FY26, beating revenue and earnings forecasts. CEO Brian Duffy said the firm had started FY27 with ‘strong momentum’, helping the shares gain 14% to a new 12-month high of 606p.
Record performance
For the year to 3 May, the group posted a 13% increase in sales to £1.83 billion, beating the consensus of £1.78 billion. EBIT for the year is expected to be between £152 million and £155 million against a consensus of £148 million.
The firm said demand for key luxury brands, particularly products on Registration of Interest lists, outstripped supply in both the US and the UK. Luxury watch revenue grew 13% in constant currency, while luxury jewellery revenue grew 18% for the year.
US retail revenue rose 25% in constant currency, with broad-based, consistent sales growth across categories, brands, price points and regions. The Roberto Coin wholesale division also performed strongly with 22% growth in revenue. The US now accounts for more than half of group revenue and profit.
‘FY26 marks another year of record performance with growth accelerating across the business and strong underlying momentum as we continue to scale’ commented the CEO.
For FY27, the group is predicting a more modest 5% to 10% increase in revenue. Adjusted EBIT margins are expected to rise by between 0.4% and 0.8% from FY26’s 8.5% (based on £155 million of FY26 earnings).
Hats off to Brian Duffy for the decision to push into the US market, which now represents half of group sales in just eight years. As he says, it’s a major milestone to have succeeded in the world’s largest and fastest-growing luxury watch market.
Analysts at Barclays investment bank have raised their price target from 645p to 725p on the back of today’s results. We suspect others will follow, while also raising their FY27 and FY28 earnings forecasts.
Watches of Switzerland isn’t just about watches, it’s about the whole customer experience and repeat business. The stores are opulent, and the service level ensures customers return when they are feeling flush. That provides a kind of defensive ‘moat’, which rivals struggle to compete with, and it shows in these results.
Read the press release here:
https://www.thewosgroupplc.com/investors
