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Swatch full-year profit misses estimates as sales decline
[ZURICH] Swatch Group AG, the maker of Tissot and Omega timepieces, reported 2015 earnings that missed analyst estimates as sales declined for the first time in six years, hurt by slumping demand in Hong Kong and the strength of the franc.
Operating profit declined 17 per cent to 1.45 billion Swiss francs (S$2.0 billion), the Biel, Switzerland-based company said in a statement on Wednesday. That compares with the 1.56 billion-franc average estimate of analysts in a Bloomberg survey. Swatch also said it plans to buy back as much as 1 billion francs of stock through February 2019.
Swatch forecast a sales increase of "well over" 5 per cent in local currencies in 2016, supported by a rebound of demand in mainland China and growth in January. The outlook for the Swiss watch industry has soured after Chinese economic growth slowed to the weakest pace in more than two decades and as stock markets and oil prices tumbled. Hong Kong is the Swiss watch industry's largest market.
While the strong franc eroded watch and jewelry sales in Switzerland, the euro region recorded "strong" double-digit growth rates in local currency. Japan and mainland China were also positive, the company said.
Swatch said it plans a dividend of 7.50 francs a bearer share, the second year of no increase. The Bloomberg forecast was a dividend of 8 francs a bearer share.