Swatch Group has reported a solid performance for the first half of 2026, with net sales increasing by 8.5% at constant exchange rates despite persistent geopolitical tensions and significant currency headwinds. At current exchange rates, sales rose by 2.0%, as the appreciation of the Swiss franc negatively impacted reported revenue by almost CHF 200 million.
The Group highlighted a marked acceleration in business during May and June, when sales advanced by 13.1% at constant exchange rates, a trend that continued into July. This stronger momentum is expected to improve capacity utilisation across its manufacturing operations and support a significant recovery in profitability during the second half of the year.
For the six months ended June 30, Swatch Group recorded an operating profit of CHF 52 million, corresponding to an operating margin of 1.7%, while net income reached CHF 16 million, representing a net margin of 0.5%. According to the company, profitability continued to be affected by adverse currency movements as well as by the deliberate decision to maintain production capacity and preserve jobs within its manufacturing division, rather than resorting to reduced working hours or temporary layoffs.
The Group generated operating cash flow of CHF 304 million, an increase of 68.9% compared with the same period last year, supported by disciplined working capital management. Net liquidity stood at CHF 1.125 billion, while shareholders' equity reached CHF 11.5 billion, resulting in a particularly strong equity ratio of 85.3%.
Swatch Group also noted that it continued to gain market share globally despite a difficult environment for the Swiss watch industry. While exports of Swiss watches declined by 0.7% during the first six months of the year according to the Federation of the Swiss Watch Industry, the Group recorded broad-based growth across virtually all of its businesses.
The Watches & Jewelry division, excluding Production activities, achieved particularly strong results. Sales increased by 9.5% at constant exchange rates, while the operating margin reached 9.0% for the half year. During May and June alone, the operating margin improved further to 15.0%, reflecting the acceleration in demand.
The Swatch Group headquarters in Biel/Bienne, Switzerland
Growth was recorded across every continent. The United States remained one of the strongest-performing markets with sales increasing by 27%, while Europe also delivered encouraging results, led by Spain (+28%) and Italy (+12%). In Asia and Oceania, the Group reported growth in Japan (+20%), South Korea (+12%), and Australia (+5%). Several emerging markets also continued to expand rapidly, including India (+38%), Mexico (+26%), and Saudi Arabia (+41%).
In China, including Hong Kong SAR and Macau SAR, the Group's own retail operations continued to improve, posting a 9% increase in sales while maintaining a stable network of boutiques. However, replenishment orders from third-party retailers remained cautious. Business in the Middle East was also affected by the continuing regional instability, impacting the Group's network of more than 200 points of sale.
The Group's retail strategy continued to deliver significant gains. With a comparable number of boutiques, sales through Swatch Group's own retail network increased by 18% at constant exchange rates, resulting in notable improvements in productivity. Company-operated boutiques now account for almost half of total Watches & Jewelry sales, while online sales continued their strong expansion, increasing by 30% at constant exchange rates.
Among the individual brands, Breguet continued to benefit from the momentum generated by the celebrations surrounding its 250th anniversary, with the innovative launches introduced during the commemorative year sustaining strong commercial performance into 2026 despite the challenging luxury market environment.
Harry Winston also reported excellent results across all regions, including particularly strong growth in China, where sales increased by almost 20% at constant exchange rates.
Omega recorded a 20% increase in retail sales at constant exchange rates, supported in part by its global marketing activities surrounding its role as Official Timekeeper of the Olympic Winter Games Milano Cortina 2026. The Group noted that its own retail network now accounts for 42% of Omega's total turnover.
The strongest volume growth came from Swatch Group's entry-level and mid-range brands. Longines, Tissot, and Hamilton all recorded double-digit increases in turnover, reflecting robust demand across these price segments and further market share gains. According to the company, these categories continue to play a strategic role by strengthening the visibility of Swiss watchmaking among the expanding middle class in many international markets while also creating opportunities for future customer loyalty.
The increase in volumes also began to benefit the Production division, where higher demand from the Group's brands translated into additional manufacturing orders and a gradual improvement in operating profitability.
At the end of June 2026, Swatch Group employed 31,331 people, representing a modest workforce reduction of 1.5% compared with the beginning of the year, primarily through natural employee turnover.
Looking ahead, Swatch Group remains confident about the second half of the year. The strong sales momentum seen in May and June, and confirmed during the first weeks of July, is expected to continue, supporting further growth across all price segments. Thanks to its vertically integrated production and its decision to preserve manufacturing capacity, the Group believes it is well positioned to meet renewed demand while improving profitability during the remainder of 2026. swatchgroup.com
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