Luxury watch retailer Watches of Switzerland reported record annual revenue, higher profits and strong cash generation after a strong financial year.

Revenue for the year ended 3 May increased 11% to £1.83bn, or 13% in constant currency, driven by a 24% rise in US sales, which now account for more than half of group revenue and profit.

Adjusted earnings rose 3% to £155m, while statutory pre-tax profit surged 76% to £133m as exceptional costs fell. Free cash flow improved to £162m from £98m, helping reduce net debt to £57m despite the acquisition of Deutsch & Deutsch, which it said was "progressing well".

The retailer said trading in the first 10 weeks of FY27 had been encouraging, with strong momentum continuing in the US and signs that the UK market was improving. It reiterated guidance for another year of strong revenue growth and a return to adjusted earnings margin expansion, adding that it has minimal direct exposure to the Middle East or tourist spending.

Investors welcomed the results, sending the shares up 4.2% on the day of the announcement.

CEO Brian Duffy said: "FY26 was a year of strong execution against a complex operating backdrop. Strong free cash flow generation supported a further reduction in net debt, reflecting the discipline and momentum in the business. This was all achieved while navigating tariff-driven price and margin changes in the US and continued pressure on consumers in the UK.

"Our focus in FY27 is to build on this performance. We have made an encouraging start to the year which underpins our confidence in delivering another year of strong revenue growth. We see a substantial runway for long-term growth, in both revenue and profit."

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