The Swatch Group reported weaker 2025 earnings despite second-half sales momentum and forecast broad growth next year.
The Swiss group, which designs, produces and retails watches, posted net sales of SFr6.28bn ($8.11bn), down 1.3% at constant exchange rates. In addition, net profit slid to SFr25m from SFr219m a year earlier.
Currency movements trimmed revenue by SFr308m, equivalent to a 4.6% impact at current rates.
Trading strengthened as the year progressed. Second-half sales rose 4.7% at constant currencies and quickened to 7.2% in the fourth quarter across all price tiers worldwide.
Operating profit declined to SFr135m from SFr304m, leaving the margin at 2.1%.
Within the watches and jewellery segment, excluding production, operating profit reached SFr549m, for a 9.5% margin, down from 10.6% in 2024.
The production unit delivered a heavy loss after the group retained capacity and jobs without compensation for reduced hours.
Cash generation improved, with operating cash flow up 52.3% to SFr507m.
The board proposed an unchanged dividend of SFr0.90 per registered share and SFr4.50 per bearer share.
Sales in watches and jewellery edged lower for the year after heavier marketing outlays linked to launches.
At constant rates and excluding China, Hong Kong SAR and Macau SAR, revenue increased 3.4% for 2025 and more than 10% in the fourth quarter.
The Americas delivered close to 20% local-currency growth, led by the US, while India and several Middle Eastern and European markets recorded double-digit advances.
Sales also recovered in the UK, Germany, South Korea and Taiwan.
Retail expansion continued, with more than 47% of revenue coming directly from consumers, while online sales exceeded pandemic-era levels in many regions.
December became the strongest month on record for the Harry Winston division.
Electronic systems revenue reached SFr359m, and capital spending fell to SFr462m.
Looking ahead, management said it expects substantial growth in 2026 across all price segments, with higher utilisation likely to “massively reduce, or even help reverse”, the production loss and lift profitability.
