ZURICH (Reuters) – Swatch Group published annual profit below expectations for 2023 on Tuesday and proposed a dividend significantly lower than expected, announcements sanctioned by investors on the Zurich Stock Exchange.
The Swiss group, the world’s number one watchmaker, saw its sales increase by 5.2% last year, to 7.88 billion francs (8.34 billion euros).
If this result is in line with market expectations, the operating profit on the other hand disappointed, at 1.19 billion francs against 1.32 billion expected, according to LSEG data.
Swatch, which, in addition to its famous plastic watches, also owns the Omega, Tissot and Longines brands, above all proposed an increase in its dividend much lower than expected by investors, of 8.3% compared to an expected increase of 19%.
The stock lost 2.68% to 207.20 francs around 11:00 GMT in Zurich, a low of more than three years.
“Swatch Group’s profitability was much worse than expected, due to a mix of increased investment, retail expansion and the strength of the Swiss franc,” commented Jon Cox, analyst at Kepler Cheuvreux.
“Sales have been strong and the group is gaining market share, but free cash flow has been negative despite an almost 13% increase in sales at constant currencies in 2023.”
Swiss group Richemont, owner of jeweler Cartier, reported sales above expectations in the third quarter of 2023 last Thursday, while British luxury fashion brand Burberry lowered its profit forecast for the full year before his results.
The annual results of the LVMH group, world leader in luxury, are expected on Thursday.
(Reporting John Revill; Nathan Vifflin, edited by Bertrand Boucey)
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