©Bloomberg
Swiss watchmaker Swatch expects record sales this year as China reopens after Covid-19 and tourism resumes to boost sales in the region.
Net sales increased last year at constant exchange rates by 4.6 percent to 7.5 billion Swiss francs compared to the previous year. Operating profit rose 13 percent to SFr1.16 billion (US$1.3 billion), beating analysts’ forecast of SFr1.19 billion.
However, sales rose 25 percent in local currencies in all regions except China, where the Covid-19 lockdowns meant a drop in sales of more than 700 million Swiss francs, Swatch said.
“After the end of the Covid-19 measures, consumption recovered quickly, not only in China but also in the surrounding Hong Kong SAR and Macau markets,” Swatch said in a statement on Tuesday.
The easing of travel restrictions in China will “revive sales to tourist destinations,” she added, saying January sales growth in China “reinforces the group’s expectation of aiming for a record year in 2023.”
Beijing’s zero-Covid strategy over the past three years has “severely dampened growth,” it said.
In view of possible energy shortages and delivery bottlenecks, Swatch has “massively” increased its inventories, expenditure on raw materials, work in progress and semi-finished products, it said.
“This measure will also pay off in view of the higher demand in China after the exit from the zero-Covid strategy,” it said.
The company saw double-digit sales growth in Europe, the Americas, the Middle East and most of Asia, excluding China.
Swatch launched the MoonSwatch collaboration in March, a £207 plastic version of Omega’s Speedmaster that prompted thousands of shoppers to queue up around the world to buy it. It achieved a turnover of 1 million