--Swatch posts double-digit growth in first-half profit and
sales
--Full-year prospects look promising
--Sales growth robust despite strong Swiss franc and weaker
high-end demand in China
By Marta Falconi and John Revill
ZURICH--Swatch Group AG (UHR.VX), the world's biggest watch
maker, Tuesday reported a strong rise in first-half profit and
sales and said the rest of the year looks promising, despite a
strong Swiss franc and weakening demand in the high-end segment in
China.
The company behind brands such as Omega, Tissot and the
eponymous plastic watches has been riding high on buoyant demand in
the Asian country, driven by rising incomes and the growing
popularity of Western brands.
But some European luxury goods manufacturers have begun to feel
the effects of an increasingly difficult business environment,
particularly as economic growth in China is slowing.
Swatch posted first-half net profit of 724 million Swiss francs
($731 million), up 25% from CHF579 million a year earlier, beating
expectations. Net sales rose more than 15% compared with a year
earlier to CHF3.68 billion.
The company reiterated its goal to reach a record CHF8 billion
sales this year, which would represent a 12% rise from last year.
Prospects for the second half of 2012 are "promising" despite some
currency and macroeconomic woes and "a certain weakening in the
high-end segment in parts of Greater China," it said.
U.K.-based Burberry Group PLC (BRBY.LN) recently posted a
significant slowdown in sales for the quarter through June, while
France's LVMH Moet Hennessy Louis Vuitton SA (MC.FR) had already
posted a deceleration in revenue growth in the first quarter.
Swatch shares closed Monday at CHF361.70 for a year-to-date gain
of almost 5%.
-Write to Marta Falconi at marta.falconi@dowjones.com
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