By Andrea Figueras
Shares in Swatch Group fell after the company posted results for 2023 that missed analysts’ expectations.
At 0958 GMT on Tuesday, shares traded 1.6% lower at CHF209.50, having fallen as much as 3.5% earlier in the session.
The Swiss watchmaker booked 869 million Swiss francs ($999.8 million) in net profit, up from CHF807 million a year prior, on sales that grew 5.2% to CHF7.89 billion. Sales were affected by an unfavorable currency environment as expected, it said.
Operating profit grew to CHF1.19 billion from CHF1.16 billion.
Both sales and operating profit missed analysts’ expectations of CHF7.96 billion and CHF1.34 billion, respectively, according to Visible Alpha consensus.
Swatch Group’s results are unlikely to reassure after volatile prints in the luxury sector, including from Hugo Boss and Burberry, and a continued underperformance of the industry, Citi analysts Thomas Chauvet and Lorenzo Bracco said in a note.
The company’s sales performance implies growth slowed in the second half to 8% from 18% in the first six months, Stifel analyst Rogerio Fujimori said in a note.
While Swatch expects the lower- and medium-price segments in particular to benefit from local currency effects this year, exchange-rate movements should continue to be unfavorable, it said.
On the back of the miss and limited outlook comments, consensus for sales and earnings before interest and taxes for 2024 will likely be reduced, which is a negative for the stock, Citi said.
Write to Andrea Figueras at [email protected]
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