Swatch Group could hit record sales of as much as 9 billion Swiss francs ($9.8 billion) in 2023 as China rebounds from Covid restrictions and demand in Europe and the US remain strong, CEO Nick Hayek said in an interview.
(Bloomberg) — Swatch Group could hit record sales of as much as 9 billion Swiss francs ($9.8 billion) in 2023 as China rebounds from Covid restrictions and demand in Europe and the US remain strong, CEO Nick Hayek said in an interview.
Hayek’s bullish outlook helped propel Swatch shares as much as 2% higher at the open in Zurich. Analysts have been expecting 8.1 billion francs of revenue this year.
The Swiss watchmaker reported 2022 sales of 7.5 billion francs, an increase of 4.6% at constant exchange rates, missing analyst consensus estimates. Sales in China plunged 30% in the fourth quarter and 50% in December as Covid restrictions followed by a wave of infections hit sales of brands like Longines.
Hayek said sales in China have been already well above a very strong January last year and that continued strong performance from brands including Swatch, Omega and jeweler Harry Winston could help drive 2023 sales to a record.
“This is realistic and achievable,” Hayek said in the interview.
The China hit caused a shortfall of 700 million francs of revenue in 2022. Swatch reported slower-than-expected earnings growth, with operating profit up 13% to 1.16 billion francs.
Swatch launched the MoonSwatch collaboration in March, causing retail chaos at its boutiques around the world as consumer clamored for a $260 Swatch plastic version of the iconic Omega Speedmaster.
The company sold more than a million MoonSwatches in 2022 at Swatch stores.
“It doesn’t stop. The queues are still there,” Hayek said of the MoonSwatch, which is now available in China, India and other markets in Asia.
“We still see potential of double-digit growth in the U.S., though of course it will be slower,” Hayek also said.
(Updates with CEO comments throughout)
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