Swatch bears brunt of tough watchmaking conditions

Swatch is experiencing the challenges for the watchmaking industry Keystone-SDA

Swatch has not been spared by the headwinds blowing through the Swiss watch industry. The Biel/Bienne-based watch brand saw its sales plummet in the first six months of the year, weighed down by the sharp drop in demand for luxury products in China.

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Swatch’s net sales fell in the first half of 2024 by 14.3% year-on-year to CHF3.45 billion ($3.85 billion), the group said in a statement on Monday. Excluding currency effects, sales fell by only 10.7%.

These results clearly missed the forecasts of analysts consulted by AWP.

At operating level, operating income was also down sharply, by 70.2% to CHF204 million, while net profit also fell sharply, by 72% to CHF136 million.

The watchmaking group expects the situation to improve in the second half of the year: strong growth is expected in Japan and the US, and prospects in many European countries are promising. The Omega brand will benefit from worldwide media exposure as official timekeeper of the Paris Olympic Games, which starts on July 26. On the other hand, the Chinese market will remain difficult for the luxury goods industry as a whole until the end of the year.

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The cost-cutting programme launched by Swatch at the beginning of the year is beginning to bear fruit. The full positive impact, particularly on production results, will be felt in the second half of the year.

Translated from French by DeepL/ts

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