Swatch Group Half Year Report 2024: Net Sales Plummet More Than 14%
“Don’t Forget I’m A Fighter”
Nick Hayek Sr. in conversation with Hodinkee in 2018
Perhaps the Donald Trump of watches, especially after his attempted assassination in Butler, Pennsylvania on July 13, 2024, it appears The Swatch Group has taken a tumble themselves. With net sales for the first half of this year dropping by more than 14% at constant exchange rates, the conglomerate is pointing towards the fall in luxury goods demand from China.
Maybe it’s time to give Snoopy another call?
Scores On The Horological Doors
July may be almost over and as Summer follows Spring, the Swatch Group have produced their 2024 half year report. Sadly it does not make for good reading. And there’s no spoiler alert required!
Established in 1983 by Ernst Thomke, Elmar Mock, and Jacques Müller, the company is home to many top Swiss watch brands such as;
And now for the big reveal. When it comes to operating profit, we see the brand has fallen to CHF 204 million. This is in stark contrast to the 2023 Swatch Group half year report that tipped the scales at CHF 686 million.
Meanwhile, negative currency impacts equated to a CHF 145 million loss, according to data predicted by Visible Alpha with net sales of $3.85 billion for the first half of 2024…more than a 14% drop.
Meanwhile, their shares declined more than 11% after the report was announced, signalling their worst daily performance since 2020
Ouch.
A lot of this comes down to weaker demand in the Far East. Heaven knows why, as you’ll find our roundup of the best watches for Chinese New Year Of The Dragon of interest, given it has all major hitters like IWC, Chopard, TAG Heuer and Vacheron Constantin.
Vital statistics of net sales 2014-2023, Source: Statista
The operating margin was a tad under 6% (5.9% to be exact), way under the 17.1% from 2023. The net income was reported as CHF 147 million, sharply declining from CHF 498 million with net liquidity figures at CHF 1,434 million. This was down in December 2023 which topped out at CHF 1,988. Not a happy Christmas this year you might think for the Swatch Group.
But of course, there is still time.
Are there any other figures of interest? Yes there is, as the equity ratio was slightly down this year at 85.8%, as opposed to last year’s number…86.1%. Although there was reduced demand in China, it made its waves like an Omega Ploprof across to Macau and Hong Kong, seeing the bear of the horological brunt.
It goes to show 2024 has been the fire-breathing equivalent of an Annus horribilis, made famous by one of HM Queen Elizabeth’s speeches at the end of 1992.
But with King Charles III delivering his first address to the House of Lords this month under a new Labour PM, Sir Keir Starmer, every timekeeping cloud has a silver lining. Stay with us for a minute.
According to reports, the Swatch brand itself were the only ones to stand up and shall we say “fight, fight, fight.” It turns out that in spite of the doom and gloom, sales rose by 10% in China from a statement released. Together with an operating profit that soared past the 15% mark in the first half of 2024, maybe things will come up roses, as we head into 2025 as they proclaimed;
“China's potential remains intact. The current situation presents the group's brands in the lower price segment with excellent opportunities for further growth and market share gains."
In addition, The Swatch Group added that “sales figures outside of China in local currencies remained at the level of 2023, a record year,” Well, that’s something at least.
What Is The Annual Revenue Of Swatch?
In a word, a lot. They are not doing too badly for themselves you might say with global revenue in 2023 standing at more than CHF 7.8 billion. Four billion Swiss francs were attributed to the Asian markets alone. Now that’s a lot of moolah!
How Many Swatch Watches Are Sold Every Year?
When examining how many watches are sold every year by the Swatch Group, we have to turn to the Morgan Stanley report in association with LuxeConsult.
This reveals in 2022 that the brand was responsible for selling in excess of 3 million watches, with more than a million units dedicated to that one particular timepiece. I think you know what we are on about. If not, where have you been since the first Moonswatch launch on the 26th of September 2022?
The OG’s that started the horological craze…
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And the name for this initial launch of 11 chronograph wristwatches…The Omega x Swatch MoonSwatch. Nothing novel you might think. But that signalled the PR spin overdrive that turned every enthusiast and collector’s head a little like one of Diana Ross’s smash hits…
”Upside Down.”
Fly Me To The Moon
Now to talk about the horological elephant in the room..
With more than a million watches sold since September 2022, the Moonswatch has been more of a global phenomenon than Logan Paul and KSI drinking Prime. Yes, that popular.
Ranging from flowers, strawberries (sans cream) and pink chronograph second hands to celebrating National Swiss Day, there has been a whole smorgasbord of watches released to tickle enthusiasts and collectors.
This includes right up to their most recent 2024 launches, incorporating a trio of terrific pieces, connecting with Mother Nature in the form of the Mission To Earth Lava in red, Mission To The Desert with beige dial and Mission To Polar Lights, in a fetching turquoise green.
Representing around 30% of overall sales within the Swatch Group, (akin to Rolex’s domination of the current luxury watch market), together with never ending queues, flippers and camping out parties to rival Glastonbury, their behemoth of a collab was more of a hit than Ed Sheeran and John Mayer talking watches! I think you precisely know what we are on about here.
By the way, the former owns a Moonswatch Mission To Moonshine Gold Neptune Blue alongside Bond maestro Daniel Craig. But we don’t have time to harp on about one of the best flexes of 2023 which nearly broke the internet, revealing a never before seen Omega Speedmaster white dial.
BREAKING NEWS:
And look what’s raced its way into my inbox like a TAG Heuer Carrera.
Behold the new “precious” Moonswatch Mission To The Super Blue Moonphase. Released August 1st
Moonswatch Madness has hit yet again…only this time in the shape of the new Bioceramic MoonSwatch Mission To The Super Blue Moonphase.
Not available until next month when it lands in a chosen few Swatch and pop-up stores, it is a double whammy of nods to summer with its aversion for kicking back, long lazy days and plenty of time on the golden sands.
To mark the full blue moon coming around the corner (or horizon) on August 19th 2024, as Enimen would say, ”Guess who’s back…back again.”
With a silver opaline panda dial, multi-shade moon phase at 2 o’ clock in blue featuring UV ink, celestial background and similar shaded pulsometer scale, the MoonSwatch Mission To The Super Blue Moonphase is here to delight enthusiasts and campers.
Available, beginning August 1st until the 19th of August, 2024 to coincide with the full moon, we are afraid it is the one watch purchase per day, per Swatch location rubric as before.
Maybe Gollum could have a quick word…
Olympic Fever
As American R&B singer Little Willie John originally sang and Peggy Lee recounted in 1958, you give me “Fever”.
And what will see both horophiles and The Swatch Group get all hot under the collar will be the 2024 Olympics. Why do I hear you ask? Taking place in Paris across 32 different sports, Omega will be front and centre stage which will no doubt help in gaining much needed exposure and brand awareness.
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The clock ticks down to the Olympic Games, Paris 2024. Source: Omega
Like Roger Bannister, they went the extra mile and released a special edition Omega Seamaster 300M Diver Paris 2024 watch to mark this prestigious event. As the Olympic Games Official Timekeeper since 1932, Omega has been at the forefront of some of the most special moments in time.
As a symbol of immense accuracy and precision, the brand has been there from Michael Phelps 28 medals, the most decorated Olympian ever to Usain Bolt breaking the 100 metre record at 9.63 seconds, set at the 2012 Olympic Games in London, UK.
As a result, they will unquestionably see worldwide coverage that may well reduce the embers that are burning in the wrong way over at the Swatch Group…especially in the first half of 2024
Predictions For The Second Half Of 2024
Okay, so we don’t have timekeeping tea leaves to tell the future or who is going to win the Golden Globes next year. But Chrono Hunter does know a thing or two about being a leading authority in the watch world, reporting the latest news over at our Chronicles desk.
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Nicolas G. Hayek Center, located at Ginza 7-9-18, Tokyo, Japan
After cogitating and digesting all the facts and figures, it appears that all is not done yet regarding long term growth. The Swatch Group has reported that sales are predicted to jump in Japan as well as the US by the end of 2024. What is down to?
This is largely due to the fact that investments have been made into the Swatch Group’s retail network alongside a cost cutting scheme, launched in Q1 of 2024. They further added;
“The full positive impact, particularly on results in the Production segment, will be felt in the second half of the year. The Group expects the situation to improve strongly in the second half of the year.”
What’s Our View?
You hear it all the time don’t you…cost of living crisis.
In this respect things may well be the case with China’s fiscal situation as economic growth has slowed down with consumer trust at a low level as they are heavily reliant on Chinese tourists.
Swiss watch exports have also taken a hammering, not quite so much as the Jaeger-LeCoultre Master Thin Ultra Tourbillon with ornate guilloche dial but you get the picture.
China has declined to more than 18% while Hong Kong is at more than 19%, considered two of the largest sectors as far as the luxury Swiss watch market is concerned. Tissot and Longines bucked the trend, maintaining their positions with Switzerland and Spain top performers in the European sector.
On top of this, the Swatch Group add in their report that;
“The USA achieved the same record sales seen in the previous year. Japan, which is one of the most important countries for luxury goods and the third-largest export market for Swiss watches, achieved record sales, with growth of over 30% compared to the previous year. Other important countries such as South Korea, India and the United Arab Emirates also considerably outperformed the previous year. The Group's retail activities exceeded the 45% mark of total sales in the Watches & Jewelry segment for the first time.”
In summation, they look like they are going to rally even stronger than one of two time Wimbledon Champion, Carlos Alcaraz’s forehand winners. As they put it themselves;
“The Group expects the situation to improve strongly in the second half of the year.”
Note, they have the Willy Wonka of watches (the Moonswatch) which opens up a world of pure imagination for avid enthusiasts that should in all likelihood see them clear of trouble.
Until next year’s report anyway!
Conclusion
Cost cutting, shmost cutting.
Ultimately, it’s sales figures that count at the end of the day, week, month and year. When everything is totted up and the chimps have counted the last strap off the production line, the proven winner is naturally the Swatch Group’s tie-in with Omega.
And with the Polar Lights version on some third party platforms selling at three times above retail at around the £800 mark at the time of writing (note RRP is £240), there still seems to be a healthy appetite for this everyday novelty.
Not quite the Chateaubriand and triple cooked fries of the horological world but maybe a thin cut cheaper steak, slightly tastier than a Big Mac. Now does it sit at the head of the table? Nope that still goes to the bigger boys such as Rolex, Patek Philippe and Audemars Piguet in terms of value retention, desirability and material quality.
However you cannot knock a good collab, especially when you get it right like the Bioceramic Scuba Fifty Fathoms Collection which further bolstered the Swatch Group’s overall sales.
But if a Moonswatch isn’t your cup of tea or coffee, and you want to buy an Omega for the real deal or add a genuine Speedmaster to a new or existing collection, there’s a platform that’s already setting Olympic style standards for outstanding service, exceptional prices and 100% authentic watches.
See you in 2025 Nick Hayek Jr…
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Images (Unless otherwise specified) Swatch & Omega
Further Reading:
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