Swatch Group reports weak first half year financials
World’s largest watch-maker Swatch Group said the strong Swiss franc and expenses for the Olympics weighed on net profit in the first half but it expected a positive second half of the year on good demand in the United States and Japan.
Swatch Group has been facing major challenges by an unfavourable currency environment and sluggish demand for high-end watches in the important Chinese market where a crackdown on gifts for favours has hurt watch sales.
“Particularly in the USA and Japan, sales continue their very positive development. Also, the stronger sales trend noticed on the Chinese mainland continues,” the group said in a statement released on Tuesday. “In contrast, the situation in Hong Kong is affected by a number of uncertainties,” Swatch said without elaborating.
Net profits of the group fell to 680 million Swiss francs (443 million pounds), just below a forecast for 690 million francs in a Reuters poll. Gross sales rose 4 percent to 4.347 billion francs, also short of a 4.438 billion forecast in the poll. When excluding currency swings, they rose 8.5 percent to 4.535 billion francs.
French luxury goods firm Hermes last week posted a slowdown in second-quarter sales growth, hit by a slump in Japanese demand and adverse changes in foreign exchange rates.