Swatch Group with profit slump and announcement of a world first

During the Richemont Group While the Swatch Group, which specializes in watches, was able to offset the declines in the watch segment with an increase in sales of jewelry in the first quarter of the 2025/26 financial year, it has to announce a significant decline in sales for the first half of 2025.

Net sales in the first six months of the current year amounted to CHF 3.059 billion, 7.1 percent less (at constant exchange rates) than in the same period of the previous year.

Even more significant is the decline in consolidated profit, which amounted to CHF 17 million in the first half of the year, compared to CHF 147 million in the first six months of 2024. This corresponds to a decline of almost 88 percent.

The Swatch Group cites the sharp decline in sales in its wholesale business in China, Hong Kong, and Macau, which fell by 30 percent, as the reason for this. The decline in its own retail business was only 15 percent. This region's share of the Group's total sales has thus fallen from 33 to 24 percent over the past 18 months.

The USA, Mexico, and Canada, however, saw double-digit growth. Omega, Longines, Rado, Tissot, and Hamilton, in particular, gained market share, and Swatch also surpassed its previous year's figures. India recorded a sales increase of over 20 percent year-on-year. Japan achieved sales at the level of the record year 2024. Sales in the Middle East and Australia also performed very well. Switzerland experienced a slight decline in sales due to the very strong Swiss franc, while the other European markets closed at the previous year's level.

"We can handle it. We can also accept making less profit. But we stand by our employees."

Nick Hayek

Outlook for the second half of 2025

The Swatch Group sees significant growth potential in the US, Japan, and India and also expects further inventory reductions at Chinese retailers, resulting in a recovery in orders. E-commerce consumption is also expected to increase.

The Group therefore expects improved production capacity utilization, particularly driven by numerous new product launches in all price segments.

But: "There will not be a revolution, it will not be massive, but it is a trend in the right direction," Nick Hayek told Reuters about his expectations for the Chinese market in the second half of 2025.

Swatch introduces an AI-generated world first

For example, Swatch announced the launch of a world first this summer that will offer customers numerous customization options. Customers will be able to communicate directly with the brand's "artistic intelligence," called AI-DADA, and thus create their own Swatch watch.

AI-DADA will propose designs that draw on 40 years of Swatch design history. Each watch will be unique, the Swatch Group promises.