Watches of Switzerland Group (LSE: WOSG) has delivered a remarkable 50% share price gain so far in 2026, making it one of the standout performers across the entire FTSE 250 index.
The broader FTSE 250 has managed only a 3% rise during the same period, highlighting just how dramatically WOSG has outpaced its benchmark this year.
The stock had been underperforming for some time, weighed down by concerns over slowing luxury demand and weaker profit margins across the sector.
However, that picture is now changing, with a full-year trading update in May noting “growth accelerating across the business and strong underlying momentum as we continue to scale.”
The US market has been the primary driver behind the company’s improved fortunes, with the update describing it as “the primary engine of growth” for the business.
US revenue climbed 24% in constant currency terms to £927m, with the American market now accounting for more than half of total Group sales worldwide.
The company has invested heavily in expanding its US presence, and acquisitions such as Roberto Coin’s North American jewellery business have further strengthened its foothold there.
Watches of Switzerland has also broadened its customer base by pushing pre-owned watch alternatives alongside new timepieces, opening the market to consumers who may be more budget-conscious.
Pre-owned sales rose 22% versus the prior year, with the continued roll-out of Rolex Certified Pre-Owned across the UK portfolio adding further momentum to that segment.
Despite the strong rally, the stock remains down almost 50% from its position at the start of 2022, suggesting there may still be meaningful room for recovery before the valuation appears stretched.
Looking ahead, continued improvement in consumer confidence, particularly in the UK, could provide additional fuel for the share price to extend its gains further.
The US expansion also carries the potential to drive higher-margin growth, which would now have a significantly larger financial impact given how dominant the American market has become for the group.
Risks remain, however, as luxury spending is cyclical by nature and expensive watches tend to be among the first purchases consumers postpone during periods of economic difficulty.
While the US market is performing strongly, the outlook across the UK and other geographies where the company operates is described as less encouraging for the period ahead.
Investors weighing up WOSG will need to balance its impressive momentum and recovery potential against the inherent unpredictability of the luxury consumer discretionary sector.
