By Andrea Figueras

Swiss watch exports ticked up in March, driven by U.S. growth in the face of an uncertain outlook as the luxury sector grapples with persistently waning demand and an unpredictable global trade spat.

Total exports of Swiss timepieces jumped 1.5% to 2.13 billion Swiss francs ($2.62 billion) in March compared with the prior-year period, according to data from the Federation of the Swiss Watch Industry, known as FH. However, the trend for the first quarter as a whole was negative, with exports declining 1.1%.

The improvement in March was driven by the U.S., which accounts for the lion's share of total exports of Swiss watches. "This matches earlier commentary from the broader watch industry, which had highlighted signs of a recovery in the U.S. and U.K.," Bernstein analyst Luca Solca said in a note to clients.

U.S. growth might also reflect some "pull-forward" demand as buyers accelerate purchases to avoid the Trump administration's expected tariffs, he added.

Exports to China remained on a downward trend in March, although the pace of decline slowed. Demand for luxuries in the country has cooled recently due to economic challenge prompting Chinese buyers to axe their luxury purchases.

President Trump earlier this month said Switzerland would be subject to 31% tariffs on its exports to the U.S., much harsher than the 20% rate on European Union goods like French Champagne and Italian handbags. However, Trump has since implemented a 90-day pause on the measures for countries open to negotiating trade deals.

"The watch sector remains in a challenging situation, even within the broader luxury goods market, as it is highly correlated to consumer sentiment and financial markets, particularly in the U.S.," Vontobel analyst Jean-Philippe Bertschy wrote in a research note.

Passing on more costs to consumers could be a risky strategy amid waning demand for high-end garments and accessories. Although luxury brands have more room to maneuver than other retail businesses due to their strong pricing power, the indirect impact of duties on U.S. consumer sentiment could depress spending, while years of price increases are putting off some customers.

Even before the recent tariff turmoil, such trends were contributing to a less favorable outlook for the sector, the Vontobel analyst said.

Earlier this week, LVMH posted sales for the first three months that fell short of analysts' forecasts. Its watches and jewelry division posted a flat organic performance in the quarter and a 1% decline on a reported basis. French peer Hermes on Thursday reported a 10% decline in first-quarter revenue at constant exchange rates for its watches division.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

April 17, 2025 06:31 ET (10:31 GMT)

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