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Luxury retailer Watches of Switzerland has upgraded its sales outlook thanks to demand over the key festive season.
The London-listed group said sales growth was better than it expected over its third quarter to January 25, with “strong” trading over the Christmas and holiday period.
Demand for its luxury brands, such as Rolex and Omega watches, continues to outstrip supply in the UK and US, according to the group.
The group hiked its guidance for full-year sales growth, on a constant currency basis, to between 9% and 11%, up from the 6% to 10% previous range, as it also said a recent deal should help boost trading.
It has bought a majority stake in US family-owned watch and jewellery chain Deutsch & Deutsch, which will see it add four Rolex-anchored showrooms in Texas.
But the firm also trimmed its outlook for underlying earnings margins, which offset the sales growth upgrade and left shares nearly 1% lower in Wednesday morning trading.
The group said it expects profitability to improve in the second half of the year compared with the first six months.
Brian Duffy, chief executive of Watches of Switzerland, said: “I am pleased to report another period of strong performance, building on the sales momentum established in the first half and reflecting strong trading over the holiday period.
“It is particularly pleasing to be achieving these results despite an unusually volatile operating environment, including macroeconomic uncertainty and tariffs, and is testament to the collective contribution of our colleagues which will be reflected through our staff incentive arrangements,” he added.
The luxury watches sector has been impacted by higher tariffs imposed on Switzerland by US president Donald Trump.
An agreement was struck last November between the US and Switzerland which reduced the tax on Swiss imports into the US from 39% to 15%.
