Jan 10, 2013
Swatch 2012 sales up 14%, indicating a healthy 2013
Jan 10, 2013
ZURICH - Swatch Group said it expected "healthy" growth in 2013 after the world's biggest watchmaker beat expectations with a 14 percent rise in full-year sales by winning market share.
"The first 10 days of January once again indicate positive growth in 2013," Swatch said on Thursday.
Gross sales last year rose to 8.14 billion Swiss francs ($8.8 billion), beating a forecast for 8.05 billion in a Reuters poll. Sales at its watches and jewellery segment, which account for 90 percent of the total, rose 16 percent.
Known for its colourful plastic Swatch watches and high-end Breguet and Omega brands, the company was the first luxury goods group to report 2012 sales. Peer Richemont will post a trading update on Jan. 21.
"The strong group brands performed convincingly in all regions and price segments, notably outside greater China as well, and realised further conspicuous growth in market share," Swatch said.
The company said operating profit and net income - set to be reported by Feb. 21 - would be hit by marketing expenses for the London Olympics and unfavourable currency developments.
Omega, the official timekeeper of the Olympics, financed the Rolling Stones TV commercial "Start me up" for the Games and gave away hundreds of Swatch watches to volunteers.
"A very good set of sales figures, which are clearly better than expected," Kepler Capital Markets analyst Jon Cox said.
"However, the company appears to be tempering expectations regarding this year's (2012) profitability, citing the franc and the Olympics. I suspect the year started OK but no great shakes given its comment about just 'positive growth' so far."
Swatch had said several times last year that reaching the 8 billion franc target would be challenging due to the impact of a weak dollar and slowing growth in debt-stricken Europe and the important Chinese market.
Swatch shares, which rose 31 percent last year, were flat at 499.70 francs at 0812 GMT, compared with a 0.1 percent weaker European personal and household goods index.
Sales growth in the global luxury market is estimated to have slowed to 5 percent in 2012 from 13 percent in 2011, as Chinese and European customers rein in spending, consultancy Bain & Co and luxury goods trade body Altagamma said recently.
Luxury groups including Burberry and PPR's Gucci have warned of tough trading in growth market China. While demand for ultra-pricey timepieces slowed, Swatch has said previously that its mid-priced watches are still flying off the shelves in China.
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