Swatch Group's results weighed down by China in 2024

Business

Swatch store. Credits: Swatch

Zurich - Swiss watchmaker Swatch Group saw its profits and sales plummet in 2024 due to falling demand in China and a decline in orders for watch components, it announced on Thursday.

The Swiss group, which owns Tissot, Longines and Omega among others, reported a net profit that fell short of expectations, down fourfold to 219 million Swiss francs (194 million pounds), compared with 890 million francs a year earlier.

Analysts polled by Swiss agency AWP had expected it to generate 407 million francs on average. Its turnover also fell short of expectations, at 6.7 billion francs, down 14.6 percent, it said in a statement. Analysts' forecasts were around 6.98 billion francs.

"The sharp decline in demand for consumer goods in China (including Hong Kong SAR and Macao SAR) and in Southeast Asian markets, which are heavily dependent on Chinese tourists, continued into the second half of 2024," the Swiss watchmaker explained in the statement.

"Sales in these important regions for the Group's brands have fallen by around 30 percent overall," he quantified. The luxury sector has had a more difficult year in 2024 after three years of strong expansion while demand in China has suffered from the slowdown in the economy, the real estate crisis and youth unemployment.

Swatch Group, known for its multi-coloured plastic watches but also the owner of about 15 other brands, is considered one of the companies most exposed to China in the luxury sector. China, Hong Kong SAR and Macao, represented "27 percent" of its turnover in 2024, the group quantified in the press release.

The group, which also supplies watch components to other watch companies, also suffered from a drop in orders in this area of activity, it detailed in the press release. For 2025, Swatch Group expects "substantial improvements in turnover" based on "good sales achieved in December outside China," the press release specifies.

"Demand in China will remain moderate," he estimates, however. In 2024, Swiss watch exports fell by 2.8 percent to 25.9 billion francs, according to statistics from the watchmaking federation published separately on Thursday.(AFP)

This article originally appeared on FashionUnited.FR. It was translated to English using AI and edited by Rachel Douglass.

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