Swatch Group has published its strongest set of financial results since before the pandemic with sales for the first half of 2023 rising by 18% at constant exchange rates.
Net sales of CHF 4.019 billion beat the group’s previous highest figure, recorded in 2018, by 8.5%.
Operating profit soared by 36.4% to CHF 686 million for the six months to the end of June thanks to operating margin improving year-on-year from 13.9% to 17.1%.
Swatch Group’s share price soared by over 6% in early morning trading.
In commentary accompanying the financial results, Swatch Group says there has been double-digit growth in all watch and jewellery price segments, with strongest growth in the lowest price level.
Prospects for the second half of 2023 in all markets and price segments are excellent, the company adds.
Performance was boosted by the last travel restrictions in Asia, which resulted in significant sales increases in local currencies in most major markets.
In addition to the expected recovery in Mainland China, tourism destinations such as Thailand or Macao in particular benefited from the rapid rise in travel activity.
After years of declining consumption, business in Hong Kong SAR has completely revived, resulting in a tripling of sales, Swatch Group reveals.
Sales in Switzerland, also benefiting from a return of high-spending tourists, rose by almost 50%. Italy, Spain and France were also listed as growth markets.
Sales in North America rose by high double digits, with the lower and medium price segments performing particularly well.
Omega recently raised prices by as much as 8% in the United States in an effort to maintain global price parity as the US dollar weakened this year.
The MoonSwatch effect
“Global demand for the MoonSwatch not only continued unabated, but even accelerated,” the company reports.
Rising demand for MoonSwatch will be particularly celebrated because, as availability has improved, prices on the secondary market have dropped back to the point where flipping the watches is barely profitable, so sales today are far more likely to be to genuine customers.
If the strategy works as planned, MoonSwatch customers today could be Omega Speedmaster customers of the future.
Swatch Group is continuing to grow its direct-to-consumer operation, online and through internal boutiques.
The share of watch and jewellery sales via the group’s own retail business was over 40% in H1 2023, with average sales per store rising by more than 30% year-on-year; faster growth than the wholesale business.
Swatch Group also reveals in its financial report that it has acquired a prime property on Old Bond Street in London and a store on the Champs-Elysées in Paris, but has not yet provided details on how the locations will be used.
