ZURICH (Reuters) - Swatch Group (SIX:UHR) said business slowed in the last three months of 2018 hit by a downturn in Asia and weak sales in France, leading it to post lower-than-expected results for the full year.
"(In Asia) a downturn in demand occurred in the last three months of the year, particularly in wholesale," the maker of cheap plastic Swatch watches, sporty Tissot and luxury Breguet timepieces said in a statement on Thursday, also pointing to "very weak" performance in France.
Chinese tourists shopping less abroad and political "yellow vest" protests in France have weighed on luxury watch sales in recent months, sending Swatch's share price sharply lower in the second half of 2018.
"The Swatch Group anticipates healthy growth in 2019, despite the strong comparison basis in the first half of 2018," the group, based in the western Swiss town of Biel, said, adding it had seen "solid growth" in January.
"The leadership position of the Swatch Group in China will become a major opportunity for the Group in 2019, even if ongoing market turbulence remains disruptive."
Sales rose 5.7 percent at constant currency rates to 8.48 billion Swiss francs ($8.54 billion), below a forecast for 8.65 billion francs in a Reuters poll.
Net profit rose 14.8 percent to 867 million francs, also short of a 952 million forecast in the poll, prompting Swatch Group to propose a lower-than-expected dividend of 8 francs per bearer share.
Luxury goods giant LVMH, owner of watch brands TAG Heuer, Zenith and Hublot, on Tuesday reported a 9 percent increase in like-for-like sales in the final quarter of 2018, helped by improving demand for its leather goods in China, and remained upbeat on prospects for the current year.