Swatch first-half profit falls short of expectations

Swiss watch group Swatch said on Tuesday that its net profit fell in the first half of the year, while sales rose and the company expected performance to improve in the second half.

Swatch said net profit for January to June fell by 5.8 percent to 16 million Swiss francs, or $19.8 million. Sales rose by two percent to 3.1 billion francs. The company said sales would have risen by 8.5 percent excluding exchange-rate changes.

Analysts surveyed by the Swiss news agency AWP had expected profit of 95 million francs on sales of three billion francs.

Swatch owns watch brands including Tissot, Longines and Omega, and also sells watch components such as dials and hands. The company said sales of its watch brands showed strong momentum across all price levels.

Swatch said acceleration seen in May and June, and confirmed in July, allowed better use of production capacity and would lead to a significant improvement in profitability in the second half of the year.

In May, the Swatch brand drew attention with its Royal Pop model, made through a partnership with Audemars Piguet, which led to long lines outside its stores.