Can anything shut down the Gold rally?
Investing.com -- Watches of Switzerland said it remains on track to deliver a good first half (H1) of fiscal 2026 (FY26) in line with expectations, citing strong trading in the 18 weeks to August 31, 2025.
The company’s shares jumped around 7% after the update.
The luxury retailer highlighted “consistently strong trading throughout the period, particularly in the U.S. despite the announcement of increased tariffs on Swiss imports.”
It added that stability in the U.K. luxury watch and jewellery markets seen in the prior half year has continued, supporting year-on-year growth.
Registration of Interest lists are also expanding in both markets, the company said.
Looking ahead, management said performance is in line with guidance issued in July. It does not expect “any material impact from the U.S. tariffs in H1 FY26 as brand partners have increased inventories,” citing a 45% jump in Swiss watch exports in July versus last year.
“WOSG today confirms a good H1 to date, in line with the group’s FY guidance,” Jefferies analyst James Grzinic said. “Whether the augmented 39% U.S. tariffs result in additional margin attrition for retailers once inventory cover runs out later in H2 will be a debate.”
The broker slightly trimmed its estimates and the price target to 440p from 490p “to reflect the incremental tariff imponderables.”
Separately, Deutsche Bank analyst Alison Lygo said the market is overstating the downside risk to Watches of Switzerland’s earnings from U.S. import tariffs.
She noted that the real risk lies in demand for non supply-constrained brands in the U.S., which make up only about 12% of the group’s gross profit pool this year. “This limits the downside risk,” she wrote.
Even under a harsher scenario of 15% price hikes with volumes down 30% in FY27 and further margin pressure, Lygo pointed out that the shares would still be trading on roughly 9x earnings versus the 11x multiple underpinning her target price.
RBC Capital Markets analyst Piral Dadhania echoed the optimistic view, saying the WOSG’s trading statement “is reassuring, and should underpin 1H26E expectations, particularly in the context of softer investor sentiment.”