Swatch Posts Sharp Drop in Profit -- Update

By Brian Blackstone

ZURICH-- Swatch Group AG said Thursday that profit and sales fell sharply in the first half of the year, confirming last week's profit warning.

Still, the Swiss watch maker said it expects "clear growth" in the second half of the year and that "in the mid to long term, there are many more opportunities than risks."

Swatch said net profit plunged 52% from a year earlier to 263 million Swiss francs ($266.4 million), while net sales fell 11% to 3.7 billion Swiss francs ($3.75 billion) at current exchange rates.

The company had warned on Friday that sales and profit slid during the first half of 2016, sending its shares sharply lower and suggesting that the luxury-goods sector faces major headwinds in an uncertain global economic environment.

Biel, Switzerland-based Swatch is known not only for its cheap plastic watches but also its more expensive brands, including Omega, Blancpain and Breguet.

The company said the Rio Olympics should give a "worldwide boost" to Omega, which is the official timekeeper for the Olympics.

Write to Brian Blackstone at brian.blackstone@wsj.com

(END) Dow Jones Newswires

July 21, 2016 02:17 ET (06:17 GMT)

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