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Swatch Group AG shares jumped after chief executive officer Nick Hayek soothed investor nerves over the impact of Donald Trump’s tariffs on the watchmaker’s US business.
Speaking on a call with investors and analysts, Hayek said the US watch market remains strong, according to a note from Citigroup Inc. analyst Thomas Chauvet.
Swatch, whose watch brands include Omega and Tissot, declined to comment on the CEO’s remarks.
The stock rose as much as 6.8 percent in Swiss trading, while rivals Richemont, Kering SA, Watches of Switzerland Group Plc and LVMH also gained.
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According to Chauvet, Swatch will raise prices by a further 5-10 percent in the US after a previous increase, which it expects to fully offset the impact of US tariffs.
Separately, RBC Capital Markets analyst Piral Dadhania said Hayek delivered a bullish message on trading in North America during July and August, while confirming that China is “gently improving from a depressed base.”
Swatch shares have rallied almost 20 percent since falling to a 16-year low in April, shortly after Trump’s “Liberation Day” tariffs announcement. The company indicated last month that a slump in demand for luxury timepieces in China is bottoming out.
Still, Swatch remains in the crosshairs of short sellers. Shares out on loan, an indication of short interest, represented about 9 percent of the company’s outstanding shares as of Tuesday, according to data from S&P Global Market Intelligence.
Some remain skeptical on the stock. RBC’s Dadanhia expects “significant earnings compression” for the rest of the year.
“Swatch has a track record of sharing strong growth numbers only to disappoint, and today’s disclosure was largely limited to North America,” he wrote.
By Allegra Catelli
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