Swatch Group reported a drop in net sales and income in 2016 amid a “very challenging economic environment” in which watch sales continued to decline. In its full-year financial report released Thursday, the company said net sales were $7.58 billion, an 11 percent decrease year-over-year at both current and constant exchange rates.
Net income was $594.9 million, a 47 percent drop, while operating income was $806.8 million, which is a decrease of 45 percent over 2015.
The company said that 2016 was “marked by worldwide turbulence in a very challenging economic environment.”
The decrease in demand for watches, a trend which already was being seen at the end of 2015, intensified last year, particularly in the first half of the year, Swatch Group said, and the terrorist attacks in France, Belgium, Germany and Turkey, as well as new legal regulations in some countries, led to shifts in buying.
The company added that the slightly positive trends in the U.S. dollar, Japanese yen and euro were “almost completely neutralized” by the weakening of the British pound that resulted from the Brexit vote last summer and the devalued Chinese renminbi, as well as the continued overvaluing of the Swiss franc.
Region-wise, Swatch Group said its sales in North America were down slightly, and sales dropped in Europe as well due to a decrease in the number of tourists. Sales in Middle (Central) America were up.
