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Swatch shares unhinged after earnings warning

Business

Swatch shares unhinged after earnings warning

By AFP

Jul 15, 2016

Shares in Swatch plunged more than 11 percent on Friday after the Swiss watch group warned that sales had slumped and profit had plunged in the first half of the year.

Although full publication of results is not expected until next week, the company said first half sales had fallen by 12 due to drops "in important markets like Hong Kong and partially Europe, especially France and Switzerland..." Two terror attacks in Paris last year have hit tourism to the French capital and its luxury shops hard. At least 84 people were killed in a terror attack in the southern city of Nice that targeted Bastille Day celebrations late on Thursday.

In addition to its bright mass market Swatch watches, the group also owns the luxury Omega brand and up-market Tissot. The company said that operating and net profit "are expected to be lower of some 50 percent to 60 percent".

Swatch earned an operating profit of 761 million Swiss francs (777 million dollars, 698 million euros at current rates) in the first half of last year on sales of 4.25 billion.

In late morning trading Swatch shares were down 11.4 percent as Zurich's SMI index was down nearly 0.6 percent overall. (AFP)