Watchmaker Swatch Group AG Wednesday reported lower second-half sales but said it was seeing a strong improving trend in demand and orders, and predicted higher margins and profit for this year.
The report underscores the clear improvement in business prospects for Switzerland’s watchmaking industry, dominated by Swatch Group, Compagnie Financiere Richemont SA and closely held Rolex.
Richemont on Monday reported a better-than-expected rise in third-quarter sales, driven by high demand for its high-end jewelry and watches, and said it is cautiously optimistic for the next few quarters.
In Swatch’s early release of 2009 sales figures, the world’s largest watch company by sales said gross sales for 2009 cufflinks 9.1% to 5.42 billion Swiss francs ($5.22 billion) from 5.97 billion Swiss francs a year ago.
In the second half, the rate of decline slowed to 2%, according to a calculation by Dow Jones Newswires, with six-month sales standing at 2.94 billion Swiss francs compared with 3.0 billion Swiss francs in the year-ago period.
Sales in the fourth quarter–expressed in euro terms–rose by 7.1%, and by 11.1% measured in constant currencies, the company said, adding that business over Christmas was “phenomenal.”
Demand has picked up in many regions while the uptake in countries such as the U.S., Japan and Spain remained weak. Many customers bought products of the medium-price category, and strong brands such as Omega were in high demand, Swatch Group said.
The company said it is very confident of further increases in sales and margins in 2010.
Bank Vontobel said the figures were stronger than anticipated, also marking the upbeat outlook. The bank earrings the share to rise on the news from Tuesday’s close at 296.90 Swiss francs. Vontobel has a buy rating and a 330 Swiss francs target.
Write to Martin Gelnar at martin.gelnar@dowjones.com
Swatch Sees Watch Sales Recovering
Watchmaker Swatch Group AG Wednesday reported lower second-half sales but said it was seeing a strong improving trend in demand and orders, and predicted higher margins and profit for this year.
The report underscores the clear improvement in business prospects for Switzerland’s watchmaking industry, dominated by Swatch Group, Compagnie Financiere Richemont SA and closely held Rolex.
Richemont on Monday reported a better-than-expected rise in third-quarter sales, driven by high demand for its high-end jewelry and watches, and said it is cautiously optimistic for the next few quarters.
In Swatch’s early release of 2009 sales figures, the world’s largest watch company by sales said gross sales for 2009 cufflinks 9.1% to 5.42 billion Swiss francs ($5.22 billion) from 5.97 billion Swiss francs a year ago.
In the second half, the rate of decline slowed to 2%, according to a calculation by Dow Jones Newswires, with six-month sales standing at 2.94 billion Swiss francs compared with 3.0 billion Swiss francs in the year-ago period.
Sales in the fourth quarter–expressed in euro terms–rose by 7.1%, and by 11.1% measured in constant currencies, the company said, adding that business over Christmas was “phenomenal.”
Demand has picked up in many regions while the uptake in countries such as the U.S., Japan and Spain remained weak. Many customers bought products of the medium-price category, and strong brands such as Omega were in high demand, Swatch Group said.
The company said it is very confident of further increases in sales and margins in 2010.
Bank Vontobel said the figures were stronger than anticipated, also marking the upbeat outlook. The bank earrings the share to rise on the news from Tuesday’s close at 296.90 Swiss francs. Vontobel has a buy rating and a 330 Swiss francs target.
Write to Martin Gelnar at martin.gelnar@dowjones.com