In the first half of 2024, Swatch Group's net sales fell 14.3% to CHF 3.45 billion. Operating profit collapsed from CHF 686 million to CHF 204 million; the operating margin contracted from 17.1% to 5.9%. Net profit fell from CHF 498 million to CHF 147 million. Shares dropped more than 11.5% in a single day — the worst in over four years.
The group attributed the decline to a slump in demand for luxury goods in China, including Hong Kong and Macau. China's property slump and job insecurity had dampened consumer confidence. CEO Nick Hayek acknowledged that Chinese consumers had become 'more price sensitive'. Sales outside China, in local currencies, held at 2023 levels.
Within the group's own portfolio, the Swatch brand — the cheapest line — increased its China sales by 10% while Omega, Longines and Tissot declined. The full-year 2024 results confirmed the pattern: net profit fell fourfold to CHF 219 million from CHF 890 million. Vontobel analyst Jean-Philippe Bertschy called it 'an ugly half year for Swatch Group in all respects.'
The Swatch brand grew 10% in China while Omega, Longines and Tissot fell, but the cost base stayed luxury-sized, so net profit fell fourfold to CHF 219 million.
The group's luxury-tier brands (Omega, Longines) were overexposed to Chinese aspirational spending, which contracted sharply as the property crisis hit consumer confidence
The mid-range brands (Tissot, Rado) had no distinct positioning to defend against either luxury or value segments
The Swatch brand's 10% growth in China showed demand existed at accessible price points, but the group's cost base and retail footprint were built for the luxury segment
Cost-cutting measures were announced but their full impact was deferred to H2, leaving the group exposed through the worst of the downturn
A portfolio that spans value to luxury is only a hedge if the value tier is resourced to grow when the luxury tier stalls — otherwise the cost base follows the luxury revenue down.
Swatch Group expected the situation to improve in H2 2024 and pointed to strong growth prospects in Japan and the United States. The group said there were 'excellent opportunities' in the lower price segment. The full-year 2024 results, reported in January 2025, showed the China drag had persisted through the second half.
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