Swatch Group Sees Sharp Profit Drop Amid Sluggish Sales and Rising Costs
Swiss watchmaker Swatch Group faced a challenging year in 2024, with annual profits falling sharply amid weaker sales and increased operating expenses. The company, known for brands like Omega, Longines, and its namesake Swatch watches, reported pre-tax profit of 158 million Swiss francs ($205 million), down from 345 million francs a year earlier.
Operating profit also declined to 135 million francs from 304 million francs, while net income plummeted to just 3 million francs, compared with 193 million francs in the previous year. Revenue dropped to 6.28 billion francs from 6.735 billion francs.
The weaker performance reflects broader headwinds in the luxury sector, where high inflation and economic uncertainty have dampened discretionary spending. Swatch’s higher operating costs—linked to marketing, supply chain, and retail operations—further squeezed margins.
Despite the downturn, the group proposed a dividend of 0.90 francs per registered share and 4.50 francs per bearer share, signaling confidence in its liquidity and medium-term recovery.
Industry observers weigh in:
“Swatch’s results highlight the vulnerability of mid-range luxury brands in a tightening market,” said Clara Meyer, a retail analyst based in Zurich. “While high-end watchmakers have been more resilient, Swatch’s broader portfolio faced pressure from both aspirational shoppers trading down and affluent buyers gravitating toward higher-priced labels.”
“This isn’t just a bad year—it’s a warning sign,” commented Marcus Thorne, a former watch industry executive and now a critic. “Swatch has been slow to adapt to digital retail and over-reliant on tourist-driven markets. If they don’t rethink their strategy soon, they’ll keep losing ground to nimbler competitors.”
“I still believe in the emotional value of a Swatch,” shared Elise Bernard, a longtime collector from Geneva. “Every brand has cyclical downturns. Their creativity and accessibility will help them bounce back.”
“The dividend commitment is positive,” added David Park, an equity researcher in London. “It suggests management sees this as a short-term dip rather than a structural decline. Watch how their innovation in materials and entry-level luxury plays out next year.”