“We continue to fight to reach the seven billion francs this year but we are not there yet. The exchange rates make our life difficult,” Nick Hayek said.

“The weak dollar is actually hurting us more than the euro.”

Hayek said margins were also under pressure due to high prices for raw materials such as gold and diamonds, of which the company was using more in some products.

“The share of gold and diamonds in our watches has gone up,” he said.

Passing on higher raw material prices and unfavorable exchange rates is a challenge, particularly for entry-price brands like Tissot and Longines, Hayek said.

“We cannot and do not want to increase prices in all segments,” Hayek said.

Kepler Capital Markets analyst Jon Cox said Hayek’s tone seemed to be turning slightly more cautious.

Swatch Group shares dropped 2.6 percent to 357.50 francs at 1017 GMT and rival Richemont also traded 1.9 percent lower, slightly underperforming a 1.6 percent weaker European sector index.

For the industry as a whole, Hayek sees a marked decline in growth rates next year.

“I expect Swiss watch exports to rise 5 to 10 percent next year, which is still sensational,” he said, adding that double-digit growth rates were not sustainable in the long run.

Swiss watch exports rose 19.5 percent between January and September, holding up far better than other product categories, which have been hit by the strong franc.

Swatch Group, which is best known for its colorful plastic Swatch watches but which also owns high-end brands such as Breguet and Blancpain, is seeing strong growth in local currencies.

“October was again a very good month,” Hayek said, adding Swatch Group was seeing high double-digit growth rates in local currencies in America, Hong Kong, China, Britain and Russia.

“But in some markets, the currency impact eats up all of the growth,” he said.