Swatch Group, the largest watchmaker in the world, is maintaining its expectation for double-digit sales growth this year, despite facing challenges in the Chinese market. The company reported a growth in profit and sales for the first half of the year, which was largely driven by the success of its MoonSwatch watch.
The Swiss watch industry has had a difficult year due to extended lockdowns in China, an important market for luxury watches. Swatch Group heavily relies on sales in Greater China, and it has been significantly impacted by warehouse closures and retail store shutdowns in April and May, resulting in sales losses of around CHF 400 million.
However, despite these setbacks, the company managed to achieve a 7.4% increase in sales at constant currency, reaching CHF 3.61 billion ($3.68 billion) in the first six months of the year. Net profit also rose by 18.5% to CHF 320 million, although it fell slightly below the mean Refinitiv estimate of CHF 324.5 million. Additionally, the operating margin improved to 13.9% from 11.9% compared to the previous year.
Swatch Group remains optimistic about its future prospects, stating that it sees strong growth potential across all segments and expects double-digit sales growth in local currencies for the entire year. This positive outlook showcases the company’s confidence in its product offerings and its ability to navigate difficult market conditions.
The upcoming sales report from Richemont, another luxury goods conglomerate, for the quarter ending in June will be closely observed by the industry to assess the overall performance and recovery of the high-end watch sector. Swatch Group’s resilience and consistent growth serve as evidence of its ability to adapt and thrive in a highly competitive market.
Useful links:
Swatch Group official website
Richemont official website
