For the year ended Dec. 31, the world’s largest watch producer, said net profit rose a little more than 20% to 1.92 billion Swiss francs (about $2.1 billion) from 1.6 billion francs a year earlier. Analysts had expected net profit of around 1.73 billion francs.
Last month, Swatch Group reported an 8.3% increase in sales to 8.82 billion francs.
Analysts said that the company’s earnings got a boost from the 402 million francs in damages that Tiffany had to pay in a legal dispute between the two companies over their failed partnership.
“All brands had an auspicious start,” Swatch said. “After four years of strong and dynamic growth by Swatch Group, as well as the entire Swiss watch industry, continued healthy growth is expected in 2014.”
CEO Nick Hayek earlier had predicted that 2014 sales would rise by a “double-digit” percentage as sales in Asia, particularly China, pick up in the mid- to lower-price range even though sales in the luxury range may be slower to grow after that nation’s crackdown on extravagant gifts.
The biggest obstacle may be the weakness in the Swiss franc. Exchange-rate swings cut more than 100 million francs from second-half sales, Swatch reported earlier.