by John Revill
ZURICH (Reuters) – Swiss watchmaker Swatch reported a strong start to the year on Monday and said it was optimistic about a market recovery in China and the return of Chinese tourists abroad.
Sales growth in China during the month of January has already exceeded the high levels seen in the same period last year, said the maker of high-end watches Omega, Tissot and Longines as well as eponymous plastic watches destined for to the mass market.
“Group management expects strong sales growth in 2023 across all regions and segments,” Swatch said, noting that consumption had quickly picked up in Hong Kong and Macao as well as mainland China after lockdowns lifted. coronavirus restrictions.
“In addition, the lifting of travel restrictions in China will revitalize sales in tourist destinations. The growth in sales in January in China confirms the group in its intention to aim for a record year in 2023.”
The Swatch title took 1.6% at 9:21 GMT on the Zurich Stock Exchange.
Swatch’s comments reinforce those of other fashion and luxury players who have also expressed optimism about a recovery in Chinese consumer spending.
Swatch, which in July said it was aiming for a double-digit sales increase for 2022, reported sales in China falling by 700 million Swiss francs (700.46 million euros) during the year.
The watchmaker’s overall sales rose 2.5% to 7.499 billion Swiss francs, while its net profit reached 823 million francs from 774 million francs a year earlier.
Swatch’s sales below expectations are not a big surprise given the situation in China, said Kepler Cheuvreux analyst Jon Cox.
“The Swatch Group has more exposure to China than any other European consumer company. Aiming for a record year means sales growth of over 23%, which is a pretty big announcement from (CEO Nick) Hayek.”
(Report John Revill; French version Kate Entringer, edited by Blandine Hénault)
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