Shares in Swatch Group rose in opening trade on Thursday after the watchmaker said resurgent travel in Asia boosted first-half sales and earnings, and that it expects continued good performance for the rest of the year.
At 0723 GMT, shares traded 5,5% higher at CHF286.
The Swiss group, whose brands range from affordable Swatch-brand watches to pricier brands such as Blancpain and Omega, said net profit rose by more than 50% in the first six months of the year to just shy of 500 million Swiss francs ($576.3 million.) Sales rose 18% at constant currency, while the operating margin expanded several points to 17.1%, Swatch said.
The performance was boosted by the lifting of travel restrictions in Asia as the global Covid-19 pandemic fades, Swatch said. Expected recovery in mainland China–a vital market for the group–was joined by higher sales in tourist destinations such as Thailand and Macao, the company said. Revenue also climbed strongly in European markets including Switzerland, France, Spain and Italy, Swatch said.
Growth should continue into the second half, the company said, pointing to new products in the lower and mid-range segments.
“The only cloud on the horizon remains the unfavorable currency environment,” Swatch said, noting a negative topline impact in the millions of francs in the first half.
The strong performance should lead to consensus upgrades for Swatch’s full year, analysts Luca Solca and Clementine Flinois at Bernstein said in a note following the print.
“Swatch Group has improved on many fronts, both in terms of brand support and cost efficiency,” the analysts said, adding that the market has appeared “oblivious” to the group’s recent progress.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
