Watches of Switzerland Group Q3 Earnings Call Highlights

Core Viewpoint - Watches of Switzerland Group has raised its full-year revenue growth outlook to 9% to 11% at constant currency, up from the previous range of 6% to 10%, due to strong quarterly trading and contributions from recent investments and acquisitions [1][5]. Financial Performance - The company reported a strong third-quarter FY26 trading performance, with momentum continuing through the key Christmas holiday period [6]. - The EBIT margin percentage is expected to decline by 70 to 90 basis points for the full year compared to the prior year, attributed to brand margin adjustments, investment costs, and one-off items [7]. - The second-half margin profile is expected to improve compared to the first half, despite headwinds impacting the full-year view [8]. Market Environment - In the U.S., consumer sentiment is described as "very buoyant and positive," with strong spending observed, particularly in luxury jewelry and watches [2]. - The U.K. market is characterized as "stable," with improved sentiment noted during the Christmas season [3]. Product and Inventory Dynamics - The U.S. market has shown sustained broad-based growth across categories, with demand for key brands outstripping supply [5]. - Inventory levels are reported to be in "good shape," although there may be short-term supply issues for certain brands due to suppliers holding back shipments [11]. Customer Trends - There is a growing interest in luxury watches among younger consumers in the U.S., with a notable increase in self-purchases among women [12][13]. - Collectors represent about 25% of the company's business in the U.K., compared to nearly half in the U.S. [13]. Acquisition and Project Pipeline - The acquisition of Deutsch & Deutsch adds four Rolex-anchored showrooms in Texas, enhancing the company's presence in the state [14]. - The company is progressing with multiple initiatives, including moving e-commerce to a Shopify platform and advancing projects in both the U.K. and U.S. [16].