Group sales totaled 5,268 ME in Q1, compared with Oddo BHF's expectation of 5,292 ME and the most recent Visible Alpha consensus of 5,278 ME.

Organic growth for the quarter was in line at 1% (Oddo BHF was aiming for +0.7%, the slight negative difference being due to exchange rates) and comes after a score of +1.9% in the previous quarter (4th quarter of the fiscal year to end March 2024).

It reflects an acceleration in the decline in sales in Asia Pacific to -18% (Q4: -12%), with China at -27%, while trends in Europe and the Americas are still favorable at +5% (Q4: +7%) and +10% (Q4: +12%), and Japan continues to benefit fully from Asian tourism (notably Chinese) at +59% (Q4: 41%)", says the analyst's office.

Maisons Joaillères posted an increase of 4% (Oddo BHF expected 2.5%, compared with 3% in the previous quarter), while Horlogers Spécialisés suffered more visibly at -13% (Oddo BHF -5%, the 4th quarter was -1%).

The major decline in sales in Greater China is mainly affecting the watch division, and in view of Swatch Group's 1st half results (Underperformance - OC 167 CHF, the double-digit decline in this division is only half a surprise) indicates Oddo BHF.

The research firm is adjusting its forecasts slightly. For the year ending March 2025, organic sales growth is expected to be 4.5% (vs. 5%) and the EBIT margin 23.6% (vs. 23.7%; the previous year's margin was 23.3%), reflecting a Jewelry House division up 6.5% at cc and an EBIT margin of 33.2% (vs. 33.1% in the previous year)'.

For the year ending March 2026, we continue to expect organic sales growth of 6.5% and an EBIT margin of 24.6% (i.e. growth of 7.5% and a margin of 33.7% for Maisons Joaillères)' adds Oddo BHF.

Oddo BHF confirms its Outperform recommendation on the stock and adjusts its price target to 161 Swiss francs (from 158 Swiss francs). The recent weakening of the CHF against the euro enables us to raise our target to 161 CHF'.

'The performance in Jewelry and the resilience of its growth outside China justify a favorable relative opinion'.

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