Swatch Misses 2013 Sales Target
Swiss Watch-Maker Upbeat on Growth This Year
ZURICH— Swatch Group AG UHR.VX +3.91% Friday said the strength of the Swiss franc against the dollar and Asian currencies ensured it fell short of its full-year revenue target though gross sales improved 8.3% from 2012.
The maker of high-end Omega watches as well as its famous namesake plastic brand said operating profit and net profit for the year to Dec. 31 were "good" while sales growth should improve this year.
Biel-based Swatch said sales for all its brands in the first few days of January were strong, with "dynamic growth" is expected for the entire year.
Chief Executive Nick Hayek had alerted investors last October that the Swiss currency's strength would peg back sales growth in 2013, describing the value of the dollar and Japanese yen as "catastrophically low."
Swatch should benefit this year from the integration of Harry Winston, the U.S. watch and jewelry business immortalized by Marilyn Monroe that Swatch bought for $750 million last year, the launch of the Sistem51 mechanical Swatch watch and Omega's sponsorship of the winter Olympics.
Swatch said gross sales rose 8.3% to 8.817 billion Swiss francs in 2013. That was also below analysts' forecasts for sales of 8.89 billion Swiss francs. Gross sales is a measure that excludes the effect of discounts.
Swatch said steep falls in the value of the yen and the dollar weighed on revenue, pushing gross sales below the company's 9 billion-Swiss-franc ($9.9 billion) goal.
The watchmaker derives more than half of revenue from Asia and nearly 10% from the Americas, with 35% from Europe, according to Bank Vontobel VONN.EB -0.40% in Zurich
Falling foreign currencies means Swatch earns fewer Swiss francs, its reporting currency, for the watches it sells abroad.
Swatch is due to release 2013 earnings on Feb. 20.