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Monday, 22 July 2024

Swatch Group: optimistic outlook for the second half of the year

 Swatch Group: optimistic outlook for the second half of the year

The Swatch Group has presented its semi-annual report for 2024, outlining a complex picture for the first six months of the year. At constant exchange rates, the Group's net sales decreased by 10.7% compared to the previous year, negatively affected by a currency effect of -3.6%, equivalent to CHF -145 million.

In the first half of 2024, the Swatch Group faced significant challenges but also recorded some noteworthy positive results. Despite the general decline in sales in the Watches & Jewelry segment, the Swatch brand shone in China, exceeding the previous year's turnover by 10%.

This success was driven by high demand for the “MoonSwatch” and “Swatch Scuba Fifty Fathoms” models, which saw an acceleration in sales thanks to the new “Mission to the MoonPhase” and “Mission on Earth” editions. In Europe, the Group's retail sector maintained stable sales compared to the previous year, with Switzerland and Spain standing out as positive exceptions.

In the United States, the Group equaled the previous year's sales record, demonstrating a solid performance in a key market. Japan reported record revenue, with growth of more than 30% compared to the previous year, and other major markets such as South Korea, India, and the United Arab Emirates performed better.

Furthermore, the Group's retail business exceeded the 45% threshold of overall turnover in the Watches & Jewelry segment for the first time. Sales in the first half of 2024 increased compared to the previous year in local currencies, except China. The brands Swatch, Tissot, and Longines maintained their strong position in the market, despite the difficult environment. Looking to the second half of 2024, the Group expects that the Chinese market, including Hong Kong SAR and Macau SAR, will continue to present challenges for the luxury goods sector until the end of the year.

However, China's potential remains intact, offering excellent growth opportunities for the Group's brands in the lower price range. In Japan and the United States, strong growth is expected in the second half of 2024, accelerated by investments in the Group's retail network.

The prospects for many European countries are promising. The Omega brand, official timekeeper of the Paris Olympic Games, will benefit from extensive media exposure. The cost reduction program launched at the beginning of the year has already started to bear fruit, and the positive effects are expected to be particularly evident in the second half of 2024, with a significant improvement in the overall situation of the Group.

Antonella Reina, Editor VO+

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