Swatch Group reports earnings decline
Swatch Group, parent of Tissot, Omega and Blancpain, amongst other brands, has reported its first earnings decline in six years.
Operating profit fell 17 per cent to 1.45 billion Swiss francs (US$1.4 billion), largely due to declining sales in Hong Kong and the strength of the Swiss currency, the company said in a statement.
But the company indicated it is back on track in the first quarter of this year after Mainland China sales rebounded. It is predicting a sales increase of “well over” 5 per cent for 2016, based on local currencies.
Hong Kong is the Swiss watch industry’s largest market, so any sales trend there affects the industry’s broader performance.
“It’s been a challenging year where we’ve seen a combination of factors like currencies, which had a magnified impact on Swiss luxury, as well as tourist flows,” commented Mirabaud Securities LLP analsyt Alessandro Migliorini.
“If they come through, and they do get some tailwind from currencies, then 2016 will turn out to be a better year for Swatch.”