Swatch Group reported a dip in sales in its half-year results Wednesday but said its crackdown on gray market sales should lead to an uptick in the second half of the year.
Group net sales were down 4 percent year-over-year at current and constant exchange rates to 4.1 million Swiss Francs ($4.1 million) in the first six months.
Protests in Hong Kong spurred by political unrest weighed on sales, leading to a double-digit decline in a major market.
The watches and jewelry division, which includes brands like Longines and Tissot, accounted for 3.9 million Swiss Francs ($4 million) of total net sales.
Net income fell 11 percent to $415 million Swiss Francs ($420 million) while the operating margin dipped to 13 percent from 15 percent in the first of 2018.
The company reported growth in the key markets of mainland China, Japan and the U.S. in all price segments. Its e-commerce segment also performed well, Swatch said.
Going forward, Swatch said it expects “strong growth” in the second half of the year due to strong demand in its major markets and a comparison to a weak second half of 2018, which was dragged lower by a disappointing fourth quarter.