The Swatch Group, the world’s largest watchmaker, has announced a notable increase in its profit and sales during the first half of the year. Despite challenges faced by the Swiss watchmaking industry as a result of extended lockdowns in China, which is a crucial market for luxury watches, Swatch Group remains confident in its forecast of achieving double-digit sales growth for the year.

The company attributes its success to the strong demand for its MoonSwatch watch. However, the closure of warehouses and retail stores in China during April and May resulted in sales losses of approximately CHF 400 million for Swatch Group.

Nevertheless, Swatch Group witnessed a rise in sales at constant currency, reaching 3.61 billion Swiss francs ($3.68 billion) in the first half of the year, an increase of 7.4%. The company’s net profit also experienced growth, climbing to 320 million Swiss francs, an 18.5% increase. However, this figure fell slightly short of the Refinitiv estimate of 324.5 million. Additionally, the operating margin improved from 11.9% to 13.9% compared to the previous year.

Despite these challenges, Swatch Group maintains a positive outlook for all segments and predicts double-digit sales growth in local currencies for the entire year.

The impressive performance of Swatch Group in the first half of the year brings hope to the struggling Swiss watchmaking industry, which has been heavily impacted by the COVID-19 pandemic. The sector has seen gradual signs of recovery in recent months. Swatch Group’s success, particularly in the Chinese market, is seen as a positive sign for other luxury watch brands.

The next key update for the industry will come from Richemont, a peer company of Swatch Group, as it is scheduled to report its sales for the quarter ending in June on Friday. This report will provide further insights into the overall performance of the industry.

Useful links:
1. Swatch Group Official Website
2. Swatch Group Expects Double-Digit Sales Growth – Reuters