Swatch Group's profit plummeted by 89% in 2025, with net income falling to CHF 25 million. This sharp decline follows a year of weaker demand, despite the watchmaker maintaining its production capacity. Net sales also dipped, decreasing by 1.3% at constant exchange rates. The Watches & Jewelry segment saw a decrease in operating margin due to increased marketing investment.

The drop in profitability reflects challenging market conditions and the company’s strategic choices. Swatch’s decision to maintain its workforce and production levels, despite reduced demand, impacted the bottom line. However, the company reported strong second-half performance, with sales growth accelerating in the fourth quarter, particularly in the Americas.

Despite the downturn, Swatch anticipates substantial growth in 2026 across all price segments. The company expects improved capacity utilization to positively impact the Production segment's results. With a proposed unchanged dividend, investors will be watching closely to see if Swatch can navigate the evolving luxury watch market.

Operating cash flow rose by 52.3% due to lower inventories. The company's Electronic Systems segment also performed well, with a 13.3% sales increase. Swatch's capital expenditures were down, while R&D resulted in 187 new patent applications. With the luxury watch market dynamic, investors will be keen to see if Swatch can return to profitability.