Watches of Switzerland expects no material impact from US-Swiss tariffs

Watches of Switzerland Group PLC (WOSG) reported strong trading for the first 18 weeks of its new financial year, with performance in both US and UK markets aligning with full-year guidance despite recent US-Swiss tariff announcements. The luxury timepiece retailer anticipates no material impact from the tariffs in H1 FY26, citing increased brand partner inventories and a 45% surge in Swiss watch exports in July 2025. This resilience is further supported by growth in e-commerce and certified pre-owned sales, strong performance from its Roberto Coin acquisition, and continued strategic expansion with new store openings and joint ventures across key markets.

Analysis

Watches of Switzerland Group PLC has issued a confident trading update for the first 18 weeks of its new financial year, affirming that performance is "strong" and in line with FY26 guidance. The company has directly addressed concerns over US-Swiss tariffs, stating it anticipates "no material impact" in H1 FY26 as brand partners have proactively increased inventory. This supply chain management is complemented by a robust market environment, highlighted by a 45% year-over-year surge in Swiss watch exports in July 2025. Growth appears broad-based, with stable UK demand and encouraging US performance, where e-commerce sales have risen following a website upgrade. The company's strategic initiatives are yielding positive results: the 2024 acquisition of Roberto Coin is "performing strongly," Certified Pre-Owned sales are growing, and the physical retail expansion continues with new openings in the US and UK, including a London Rolex flagship that is "exceeding expectations."

Key Decisions for Investors

• Given that management has reaffirmed full-year guidance and de-risked the immediate tariff impact, investors could focus on the company's operational execution rather than short-term macro headwinds.
• Monitor the performance of the newly opened and upcoming US boutiques in key markets like Miami, New York, and Texas, as their success is crucial to validating the company's high-growth US expansion strategy.
• While the H1 FY26 tariff risk is mitigated by inventory, it would be prudent to watch for any commentary on the potential impact on H2, as prolonged tariffs could eventually affect margins or pricing power.