Swatch Group, the Swiss watchmaking giant, announced on Tuesday that its net profit in the first half of the year came in well below expectations, but expressed confidence in a recovery in the second half of the year.

The company said in a statement that net profit fell 5.8 percent to 16 million Swiss francs ($19.8 million) in the period from January to June, while sales rose 2 percent to 3.1 billion Swiss francs.

The company explained that when excluding the impact of exchange rate fluctuations, sales recorded growth of 8.5 percent.

Analysts polled by the Swiss news agency AWP had expected profits of 95 million Swiss francs on sales of 3 billion francs.

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The group, which owns a number of famous watch brands including Tissot, Longines, and Omega, in addition to its activity in selling watch components such as dials and hands, confirmed that its brands' sales recorded "strong momentum" across "all price segments."

The company said: "The clear and strong acceleration observed during May and June, and confirmed to continue in July, allows for improved capacity utilization and will lead to a notable improvement in profitability in the second half of the year."

In May, the Swatch brand made headlines after launching the Royal Pop model, a watch developed in collaboration with luxury brand Audemars Piguet, leading to long queues outside its stores.

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