Swatch sales and profit fall as luxury demand weakens in China
The Swiss watchmaking conglomerate — whose brands include Omega, Blancpain and jeweler Harry Winston — posted a 7.1% drop in sales to 3.06 billion Swiss francs ($3.81 billion), falling short of analysts' expectations.
Operating income also missed estimates, falling to 68 million francs from 204 million francs in the prior-year period.
The profit decline is 'exclusively attributable' to China, including Hong Kong and Macau, the company said in a statement. Swatch expects a recovery in orders during the second half of the year, noting early signs of improvement in e-commerce and reduced retailer inventories.
For more than a year, the company has faced waning demand in China and Hong Kong. The trend has affected the broader Swiss watch industry, which has seen export volumes decline in recent months amid a strong Swiss franc and growing concerns about the global luxury market.
Adding to the uncertainty is the ongoing trade conflict between the United States and Europe. Switzerland is still awaiting approval from President Donald Trump for a trade framework deal.
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