PARIS – China continues to weigh heavily on the Swatch Group, with the company posting Thursday an 88 percent slump in first-half net income to 17 million Swiss francs, or $21.1 million at current exchange rates.

Revenue for the first six months of 2025 reached just over 3 billion Swiss francs, down 11.2 percent against first-half 2024. At constant exchange rates, there was a 7.1 percent year-on-year decrease.

Foreign exchange variations continued to have a negative impact, leaving a 113 million Swiss franc dent in the semester. Meanwhile, the group’s earnings before interest and taxes, or EBIT, fell to 68 million Swiss francs, a 67 percent tumble from what it was in the first half of 2024.

Overall, the company’s figures came short of consensus expectations of 3.2 billion Swiss francs in sales, but even more strikingly so in terms of EBIT and net profit, respectively 46.5 percent and 83 percent below consensus, according to a Bernstein research note.

But Citi’s Thomas Chauvet wondered if “another miss” really mattered. Speculations on whether the group intends to go private are ongoing.

In early-morning trading, Swatch shares were up 2.8 percent to 141 Swiss francs, or $175.38 at current exchange rates.

The Swiss watchmaking group continued to attribute a negative impact on sales and results to weak consumption in Greater China, which includes the Hong Kong and Macau special administrative regions, as well as Southeast Asia, due to the drop in Chinese tourists.

It also said that the first half’s 7.9 percent decline in sales came “exclusively” from Greater China, which has fallen from making a third of Swatch’s total sales to a 24 percent share in the past 18 months.

Meanwhile, other regions “reached the record years of 2023 and 2024 in local currencies,” according to the company. It described growth in the United States, Mexico and Canada as double-digit; “over 20 percent” year-on-year in India, and “at the level of the record year of 2024” in Japan.

The Middle East and Australia “also developed very well” in terms of sales, Swatch added.

The group also touted the “impressive performance” of its Omega, Longines, Rado, Tissot, Hamilton and Swatch brands in the U.S., which recorded increases between 10 percent and 30 percent, but did not break out results by brand.

Looking ahead to the second half of the year, the company said the U.S., Japan and India “continue to have great growth potential.” It also saw “first positive signs of improvement” in China, such as e-commerce showing signs of increased consumption and reduction of inventory at retailers, which it expects to lead to a recovery in order.

For Bernstein senior analyst Luca Solca, “this dovetails with what Richemont reported earlier this week, with China still being negative, but with the rate of decline moderating,” he wrote in a note.

High hopes are also pinned on launches from the first half, such models marking Bréguet’s 250th anniversary, Omega’s Aqua Terra models for women embarking a new ultra-thin mechanical movement and a Tissot watch with a photovoltaic dial, as well as Swatch’s upcoming introduction of a personalization service tapping “artistic intelligence” to suggest designs inspired exclusively by its database of 40 years of designs and other creative endeavors.

Published separately on Thursday by the Federation of the Swiss Watch Industry, first-half exports of Swiss-made timepieces remained flat, totaling 12.9 billion Swiss francs.

For June, export sales stood at 2.2 billion Swiss francs, down 5.6 percent. Export of wristwatches slumped 9.6 percent in unit numbers and 6.3 percent in value in the month.

In terms of segments by export price, most saw marked declines – averaging at 9.7 percent overall – save for the 500 Swiss franc to 3,000 Swiss francs bracket, which leapt 16 percent.

While most major markets recorded sales declines, including a 17.6 percent tumble in the U.S. following the tariff-driven spike in April, China returned to growth with a 6.1 percent increase.

The federation nonetheless cautioned that this apparent silver lining “still represented a fraction of its level before the property crisis, with exports almost 30 percent lower than two years previously.”

Barclays’ Carole Madjo likewise said the bank “remain cautious on the recovery of watch space in the short term.”