Swatch Group stuck to its forecast for double-digit sales growth this year after pandemic lockdowns in China had less impact than feared on the world's biggest watchmaker's first-half results today.
After a strong 2021 recovery from the Covid-19 pandemic, Swiss watchmakers this year have grappled with extended lockdowns in the important Chinese market.
The maker of Omega watches, with more than 40% of its sales in Greater China in 2021, cited in a statement "sales losses of approximately 400m Swiss francs ($407m) due to closures of warehouses and many retail stores in April and May in China".
Bernstein analyst Luca Solca said this had naturally pushed up inventories.
Sales at constant currency rose 7.4% to 3.61 billion Swiss francs ($3.68 billion) in the first half, Swatch Group said, while net profit jumped 18.5% to 320 million francs, just short of a Refinitiv estimate.
Kepler Cheuvreux analyst Jon Cox spoke of a very strong result that "underscores the group's structurally lower cost base - staff levels are unchanged in the half despite the business rebound".
Cox said he expected the stock - down around 16% this year, but less so than luxury peers - to react positively.
Swatch Group said sales had benefited from the launch in March of its bioceramic MoonSwatch, co-produced by its affordable Swatch and more upmarket Omega brands, that saw customers queuing outside Swatch stores.
The company, based in Biel in western Switzerland, said it had "excellent prospects in all segments with anticipated double-digit sales growth in local currencies for the entire year".
Peer Richemont is due to report sales for the quarter to June tomorrow.
