Watches of Switzerland reports stronger U.S. demand as UK market shows recovery signs
Luxury watch demand from affluent shoppers in the U.S. continues into Watches of Switzerland's new financial year, supporting momentum after a stronger-than-expected annual profit performance. The retailer also says trading conditions in the UK are showing encouraging signs of improvement as it navigates concerns that its market valuation does not reflect its results.
Highlights
- Watches of Switzerland reported adjusted operating profit of £155 million for the year ended May 3, 2026, exceeding analyst expectations of £148.4 million.
- Strong demand from affluent U.S. consumers amid a stock market boom continues to underpin the retailer's luxury watch sales performance.
- The company has held talks with potential bidders, believing public markets undervalue its business despite resilient U.S. demand and signs of UK market recovery.
Profit performance and trading momentum
As reported by Reuters, Watches of Switzerland says demand from wealthy U.S. customers remains strong at the start of its new financial year, extending a trend that helps underpin its luxury watch business.The retailer, which sells brands including Rolex, TAG Heuer and Audemars Piguet, reports adjusted operating profit of 155 million pounds for the year ended May 3, 2026. That is above company-compiled analyst expectations of 148.4 million pounds, with affluent consumers in the world's largest economy continuing to buy luxury goods during a stock market boom.
Valuation focus and market outlook
The update comes after talk around the company's valuation in public markets. Reuters reports on Monday, citing people familiar with the matter, that Watches of Switzerland has held talks with potential bidders because it believes the stock market undervalues the business despite its performance.The combination of resilient U.S. demand and early signs of recovery in the UK points to a more supportive backdrop for the luxury retail sector. For investors, the latest trading commentary adds to scrutiny over whether the company's share price fully reflects its earnings strength and market position.
In our earlier article on the rotation in U.S. equities toward small-cap stocks, we explained how AI-infrastructure spending and supportive policy tailwinds helped push the Russell 2000 to a standout year. We also noted that, despite the rally’s breadth narrative, parts of the move were concentrated in higher-risk, unprofitable tech names—keeping valuation and “froth” concerns in focus.
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