Story perspectives

Watches of Switzerland Boosts Forecast Despite Margin Worries

2/4/2026

Summary

Watches of Switzerland Raises Forecast

Watches of Switzerland Group raised its forecast to 9-11% after a strong third quarter, led by the United States.
The group reported broad-based growth across luxury categories, aided by effective marketing and merchandising.
It trimmed its EBIT margin guidance to a 70-90 basis-point decline due to brand-margin adjustments and one-off provisions.
The acquisition of Deutsch & Deutsch, including four Rolex-anchored showrooms in Texas, is expected to boost market presence.
Despite the positive outlook, shares fell over 2% on concerns about profit margins.

Summary

Watches Face Margin Pressure

Watches of Switzerland reports margins under pressure from rising metal costs and Saks Global's bankruptcy charges.
For the year to April 2026, operating margins are expected to fall 70–90 basis points, according to CEO Brian Duffy.
The company expects annual sales to rise 9–11%, up from 6–10%.
Affluent buyers continue to invest in luxury goods.

History

Historical Context

The luxury goods market rebounded in 2010, with global sales reaching around $200 billion, largely driven by affluent consumers. Major brands like LVMH and Richemont expanded through strategic acquisitions. Today, the Watches of Switzerland Group anticipates a 9-11% sales increase, reflecting ongoing demand and resilience in the luxury sector, which has been significantly influenced by younger Chinese consumers.

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Watches of Switzerland Raises Forecast

Watches of Switzerland Group raised its forecast to 9-11% after a strong third quarter, led by the United States.
The group reported broad-based growth across luxury categories, aided by effective marketing and merchandising.
It trimmed its EBIT margin guidance to a 70-90 basis-point decline due to brand-margin adjustments and one-off provisions.
The acquisition of Deutsch & Deutsch, including four Rolex-anchored showrooms in Texas, is expected to boost market presence.
Despite the positive outlook, shares fell over 2% on concerns about profit margins.

1 / 3