Swatch profits spiral down as China sales slump
Swatch Group Faces Headwinds as China’s Economy Falters
Swatch Group, the world’s leading watchmaker, reported a sharp reversal in first‑half profits, with a decline in sales across the globe largely caused by weaker demand in China.
Financial Snapshot
- Net sales: 3.1 bn CHF, down 11.2 %
- Net profit: 17 m CHF, a plunge of 88 %
The company’s statement highlighted that China was the sole driver of the sales decline, while other regions enjoyed record‑level growth in 2023 and 2024.
Market Reaction
- Swatch shares rose 0.8 % to 138.25 CHF.
- The Swiss Performance Index advanced 0.7 %.
Brand Portfolio
Beyond the Swatch line, the group owns high‑end labels such as Omega, Longines, and Tissot – all of which rely heavily on the Chinese market for Western goods.
Challenges in China
- China’s share of total sales fell from a third to just under a quarter.
- First‑half wholesaler sales dropped 30 %.
- Retail sales declined 15 %.
- Lower demand in Hong Kong, Macao, and Southeast Asia further weighed the market.
Swatch acknowledged early signs of improvement in China and anticipates a better market environment in the second half of the year.
Growth Territories
- North America, India, Turkey, the Middle East, and Australia saw double‑digit sales growth.
- Swatch reiterated that “USA, Japan and India bring great growth potential” and expects a higher utilisation of production capacity through new product launches in the latter half.
Swatch Group’s resilience in the face of a slowing Chinese economy underscores the company’s strategic focus on markets with untapped growth potential.
