Signaling more good times ahead for the luxury watch and jewelry sector, Swatch Group AG said 2006 net profits jumped 33.7 percent to 830 million Swiss francs, or $684.9 million, from 621 million Swiss francs, or $512.5 million, and added that 2007 is...
PARIS — Signaling more good times ahead for the luxury watch and jewelry sector, Swatch Group AG said 2006 net profits jumped 33.7 percent to 830 million Swiss francs, or $684.9 million, from 621 million Swiss francs, or $512.5 million, and added that 2007 is off to an "excellent start" with "outstanding prospects."
The world's largest watchmaker also cited additional growth potential for its watch and jewelry brands in all geographic regions, sending a bullish message ahead of next month's Baselworld 2007, where it plans to unveil a new "co-axial" movement for Omega.
Operating profits rose 32.4 percent to 973 million Swiss francs, or $803 million, from 735 million Swiss francs, or $606.6 million, a year ago. Dollar figures are at the current exchange rate.
Full-year sales, reported in January, grew 12.3 percent to 5.05 billion Swiss francs, or $4.17 billion, from 4.5 billion Swiss francs, or $3.71 billion. Swatch cited strong growth in its production division, but more modest results with electronic systems.
Sales of watches and jewelry last year grew the fastest, up 13.8 percent to 3.72 billion Swiss francs, or $3.07 billion, from 3.27 billion Swiss francs, or $2.67 billion a year earlier.
The company cited growth across all brands and price ranges, including the jewelry sector. Its stable includes Breguet, Blancpain, Leon Hatot, Longines, Rado, Tissot and Hamilton.
Operating profits in watches and jewelry leaped 17.9 percent to 738 million Swiss francs, or $609.1 million, from 626 million Swiss francs, or $516.7 million, a year ago, despite a negative currency effect, additional marketing expenses in the U.S., higher gold prices and a new luxury tax in China.
On the production side, the company highlighted a product mix skewed to higher-end movements and components, meaning "a further rise in profitability in this segment is well within the realm of possibility."
Looking ahead, the Swiss conglomerate said the currency situation is favorable, excepting the weak yen, with a strong euro more than compensating for a weak U.S. dollar. Encouraged by strong trading in January and February, it is forecasting further sales growth and a rise in profitability for the current year.
“I see things on the hanger and I’m, like, ‘I never knew that color worked on me.’ It’s things you necessarily wouldn’t choose to wear, but once you put them on, you see why Janie is who Janie is." — Lily Collins on working with former "Mad Men" costume designer, Janie Bryant on creating looks for her role as Celia Brady's in Amazon series, "The Last Tycoon." 📸@jilliansollazzo #wwdeye
EXCLUSIVE: Sarah Rutson has been tapped to Build New American Fashion Group. The parent of Joie, Equipment and Current/Elliott hired the merchant to rev up its brands and expand its portfolio into designer, beauty and lifestyle categories. Read more on WWD.com, link in bio. #wwdfashion
Michael Kors' $1.3B Jimmy Choo deal has the company squaring off with Coach Inc. as both seek to build American powerhouses. Coach bought Stuart Weitzman in 2015 and Kate Spade just two weeks ago, but Michael Kors' acquisition may be putting pressure on its rival in the new push for scale. #wwdnews (📷: George Chinsee)
Meet actress Lucy Boynton, who plays opposite Naomi Watts in the recently released Netflix series "Gypsy." Boynton stopped by WWD to talk about her upcoming projects and her nomadic lifestyle. Get all the details on WWD.com. #wwdeye (📷: @dandoperalski)