Watches Of Switzerland U.S. Sales Hit $1 Billion Amid Tariff Warning
Despite record global revenues of $2.26 billion, retailer Watches of Switzerland warned Thursday that its profit margin could fall over the financial year as the luxury watch industry reels from higher U.S. tariffs.
The announcement came as the company reported a profits for the year ended April a little ahead of market expectations, boosted – somewhat ironically – by a pickup in demand in the U.S. and the U.K. and its acquisition of jewelry maker Roberto Coin's North American business.
Its U.S. business grew 16%, outpacing the U.K.'s return to growth which achieved a more modest 2% sales rise.
The London-listed company said that it was too early to comment on the potential sector impact of U.S. tariffs and added that it was in regular talks with brand partners, which include global names such as Rolex, Cartier, and Patek Philippe.
The stock market reacted with some concern and Watches of Switzerland's share price has dipped around 10% since it voiced its views over the likely impact of tariffs. It's stock value is now down over 30% in the year to date.
Watches Of Switzerland Stock Price
The watch retailer's experiences mirror a wider malaise in the global luxury market, which has been experiencing a bumpy ride in recent months as the international appetite for many traditional luxury labels wanes and brands such as LVMH push for ever greater marketing strategies.
Demand within the watches sector in particular had experienced a notable surge post-pandemic, amid a wider value reset which saw luxury customers turn to items that could be handed down through generations. The second-hand market for luxury watches has also surged in recent times, with major interest in classic vintage pieces.
A Watches of Switzerland Group store on Oxford Street, London's busiest shopping destination. ... More Photographer: Chris Ratcliffe/Bloomberg
Indeed, Watches of Switzerland forecast that its adjusted operating profit margin would be flat to down 100 basis points this fiscal year, noting U.S. tariffs had already led some brands to raise prices, "alongside reducing their authorized distribution network's margin percentage".
The company, which makes nearly half of its annual revenue in the United States, also forecast 6%-10% revenue growth for the year to the end of April 2026, adding that its guidance was based on the assumption that a 10% U.S. tariff rate on Switzerland was maintained beyond the current pause in higher levies.
Watches of Switzerland Earnings Call
On an earnings call, Watches of Switzerland CEO Brian Duffy played down the possibility of the company's product collection being impacted by the tariffs.
'Our U.S. business has continued its excellent momentum, surpassing $1 billion revenue for the first time, bolstered by the acquisition of Roberto Coin Inc. The U.K. has returned to growth as trading conditions have stabilized,' Duffy said.
'Our performance reflects our differentiated business model, with scale and leadership in our chosen markets, supported by long-standing, collaborative partnerships with world-leading brands across luxury watches and luxury branded jewelry underpinning sustained growth.'
Adjusted operating profit was nearly $205 million for the year ended April 27, just above consensus analysts' estimates of £203 million. Profit before tax dipped 18% to around $103.5 million, while the group has continued to streamline operations, recently closing several low-profit U.K. showrooms and completing its exit from continental Europe.
Looking forward, Watches of Switzerland said that it remains confident over its showroom pipeline and growth projects despite the wider macroeconomic uncertainties impacting the market.
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