At Watches and Wonders 2026 in Geneva, luxury watchmakers unveiled fresh models amid slowing demand in key markets, with Switzerland’s watch exports declining 3.2% YoY in Q1 2026 to CHF 5.1 billion, according to the Federation of the Swiss Watch Industry (FHS), as geopolitical tensions and shifting consumer priorities temper growth in the $75 billion global luxury timepiece sector.
The Bottom Line
- Swiss watch exports fell 3.2% in Q1 2026, with Asia-Pacific demand down 5.1%, reflecting softer luxury spending in China and Hong Kong.
- LVMH’s watch division reported flat revenue growth at €1.2 billion in Q1, citing inventory corrections and reduced tourist spending in Europe.
- Rolex maintained stable production output at approximately 1 million units annually, while Richemont (SWX: CFR) saw its watch segment EBITDA margin contract to 28.4% from 31.0% YoY.
The 2026 edition of Watches and Wonders highlighted a sector at an inflection point, where heritage brands balance innovation with caution amid macroeconomic headwinds. While product launches emphasized sustainability and mechanical complexity, underlying sales trends reveal a slowdown driven by reduced discretionary spending in Asia, a stronger Swiss franc, and lingering effects of Iran-related geopolitical risk on Middle Eastern demand. The Federation of the Swiss Watch Industry reported that exports to Hong Kong dropped 8.7% in Q1, while shipments to mainland China declined 4.3%, underscoring weakening appetite for luxury goods in the region’s key markets. In contrast, U.S. Demand remained resilient, growing 1.8% YoY, supported by steady consumer confidence and a weaker dollar relative to the franc.
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LVMH, whose watchmaking division includes TAG Heuer, Zenith, and Hublot, reported flat revenue in its Watches and Jewelry segment for Q1 2026, with CEO Antoine Arnault noting in a post-earnings interview that “we are seeing a normalization of demand after two years of exceptional growth, particularly in Asia, where customers are prioritizing experiences over material goods.” This sentiment was echoed by Jean-Christophe Babin, CEO of Bulgari (part of LVMH), who told Reuters that “the luxury watch consumer is becoming more selective, favoring timeless pieces over frequent upgrades.” Meanwhile, Richemont’s watch segment—home to Cartier, IWC, and Jaeger-LeCoultre—saw operating profits decline 6.4% YoY despite stable sales, pressured by higher production costs and marketing investments tied to new model launches at the Geneva present.
Rolex, which does not disclose financials, maintained its long-standing strategy of controlled supply, with industry analysts estimating annual output held steady at around 1 million units. According to a note from UBS Wealth Management, “Rolex’s scarcity model continues to insulate it from volume-driven downturns, with pre-owned prices for models like the Daytona and GMT-Master II holding firm at 120–140% of retail.” In contrast, Audemars Piguet reported a 9% increase in boutique sales during the fair, driven by strong uptake of its new Code 11.59 Ultra-Thin Perpetual Calendar, though overall 2026 guidance remains cautious due to component supply constraints.
The broader economic context reveals a luxury sector navigating divergent regional trajectories. While Eurozone inflation eased to 2.1% in March 2026, permitting the ECB to hold rates steady, China’s consumer confidence index lingered at 89.3—well below the 100 threshold signaling optimism—according to the National Bureau of Statistics. This has prompted Swatch Group (VTX: UHR) to shift marketing focus toward Europe and North America, where its Longines and Tissot brands posted mid-single-digit growth in Q1. Supply chain pressures also persist, particularly in the sourcing of ethically mined gold and conflict-free diamonds, with the Responsible Jewellery Council reporting a 14% increase in audit requests from watchmakers in Q1 2026.
| Company | Q1 2026 Watch Revenue | YoY Change | EBITDA Margin |
|---|---|---|---|
| Richemont (SWX: CFR) | €2.1 billion | +0.5% | 28.4% |
| LVMH Watches & Jewelry | €1.2 billion | 0.0% | 26.1% |
| Swatch Group (VTX: UHR) | CHF 1.8 billion | -1.2% | 22.7% |
Looking ahead, industry forecasters at Bain & Company project global luxury watch sales to grow at a CAGR of 3.5% through 2028, down from the 5.2% pace seen in 2022–2024, as market saturation and shifting generational preferences reshape demand. The rise of pre-owned platforms like Chrono24 and WatchBox—now accounting for an estimated 18% of secondary market transactions—further complicates new unit sales, particularly among millennial and Gen Z consumers. As one portfolio manager at Fidelity International noted in a recent client briefing, “The luxury watch market is no longer a pure growth story; it’s becoming a battle for share in a mature, emotionally driven category where brand relevance and heritage carry more weight than innovation alone.”
*Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.*
