Samsonite Group (SEHK:01910) Q3 2025 Earnings Call November 12, 2025 09:00 AM ET Company ParticipantsWilliam Yue - VP of Investor RelationsKyle Francis Gendreau - CEOReza Taleghani - CFOErwan Rambourg - Head of Consumer and Retail ResearchConference Call ParticipantsChris Gao - AnalystAnne Ling - AnalystOperatorMorning, good afternoon, and good evening, ladies and gentlemen. Welcome to the Samsonite Group 2025 third quarter results conference call. At this time, all participants are in listen-only mode. Aft ...

Financial Data and Key Metrics Changes - The company reported a net sales decline of 1.3% for Q3, an improvement from a 5.2% decline in the first half of the year [38][39] - Gross margin for Q3 was 59.6%, up 30 basis points year-over-year and 60 basis points from the previous quarter [6][45] - Adjusted EBITDA for the quarter was $143 million, with an adjusted EBITDA margin of 16.3% [39][46] - Adjusted net income was reported at $64 million [39] Business Line Data and Key Metrics Changes - Direct-to-consumer (D2C) sales increased by 3.5% period over period, with D2C e-commerce up over 10% [4][5] - Non-travel sales grew almost 7% in Q3, representing a significant opportunity for the company [6][50] - Wholesale channel net sales declined by 4.5%, with traditional brick-and-mortar sales down around 7% [5][40] Market Data and Key Metrics Changes - North America saw a net sales decline of 10%, although TUMI brand improved by 3.3% in Q3 [11][42] - Asia's net sales were roughly flat, with TUMI showing a 7.1% increase in Q3 [40][42] - Europe reported a 1% increase in sales, while Latin America grew by 1.2% [40][44] Company Strategy and Development Direction - The company is focused on capitalizing on growth in travel and expanding its non-travel business, which has shown a 14% CAGR from 2020 to 2025 [10][26] - There is a strong emphasis on product innovation and enhancing brand awareness across all brands [18][19] - The company plans to complete a dual listing in the U.S. by 2026 to enhance shareholder value [61][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium and long-term sales growth despite current macroeconomic uncertainties [57] - Positive trends in consumer demand for travel are expected to continue, with strong product launches anticipated for Q4 [57][58] - The company is well-positioned to maintain strong gross margins due to effective tariff mitigation strategies [59][60] Other Important Information - The company has successfully refinanced its corporate debt, extending maturities and improving liquidity [53][54] - The DTC sales mix has increased to 42%, with e-commerce channels growing significantly [49][50] - The company has opened 43 net new stores over the past year, impacting G&A expenses [46] Q&A Session Summary Question: Can you provide insights on the performance of TUMI in North America? - TUMI showed a positive growth of 3.3% in Q3, a significant improvement from a decline of 3.3% in Q2 [42] Question: What are the expectations for the non-travel segment? - The non-travel segment is expected to continue growing, with a reported 6.7% growth in Q3 and representing 35.6% of total sales [50][51] Question: How is the company managing its cost structure amid current challenges? - The company has maintained a disciplined approach to managing its cost structure, with gross margins remaining strong despite tariff impacts [45][46]

Financial Performance - Net sales decreased by 1.3% in Q3 2025, but showed sequential improvement compared to a 5.8% decrease in Q2 2025[14] - DTC net sales increased by 3.5% in Q3 2025, with DTC e-commerce up 10.1%[14] - Q3 2025 gross margin remained strong at 59.6%, a 30 basis point improvement period-over-period[14] - Adjusted EBITDA decreased by US$12 million from Q3 2024[58] - Adjusted net income decreased by US$16 million mainly due to lower adjusted EBITDA and higher depreciation[56] Regional Performance - North America net sales decreased by 4.5% in Q3 2025, but improved sequentially from a decrease of 7.3% in Q2 2025[63] - Asia net sales were approximately flat, down 0.3% in Q3 2025, a significant improvement compared to a 7.6% decrease in Q2 2025[63] - Europe net sales were up 0.9% in Q3 2025 compared to down 0.9% in Q2 2025[66] - Latin America net sales growth improved to +1.2% in Q3 2025 compared to down 2.2% in Q2 2025[66] Brand Performance - Samsonite brand net sales growth sequentially improved to -4.1% in Q3 2025 from -4.9% in Q2 2025[19] - TUMI brand net sales growth sequentially improved to 5.0% in Q3 2025 from -3.0% in Q2 2025[19] - American Tourister brand net sales growth sequentially improved to -3.7% in Q3 2025 from -14.4% in Q2 2025[19]

Core Viewpoint - The company reported a decline in sales revenue for the quarter ending September 30, 2025, but showed improvements in operating profit and net profit attributable to shareholders compared to the same period last year [1] Group 1: Quarterly Performance - For the three months ending September 30, 2025, the company's sales revenue was $873 million, a decrease of 0.6% year-on-year [1] - Gross profit for the same period was $520 million, with a slight increase in gross margin to 59.6% [1] - Operating profit reached $139 million, reflecting a year-on-year increase of 4.6% [1] - Net profit for the quarter was $78.8 million, up 10.3% from $71.5 million in the previous year [1] - Profit attributable to equity holders was $73.5 million, an increase of 11.0% year-on-year [1] Group 2: Nine-Month Performance - For the nine months ending September 30, 2025, the company's sales revenue totaled $2.534 billion, a decrease of 4.2% year-on-year [1] - Gross profit for this period was $1.504 billion, with a decline in gross margin to 59.3% [1] - Net profit for the nine months was $209 million, down 18.3% compared to the previous year [1] - Adjusted net income was $187 million, a decrease of 26.3% year-on-year [1] - Net cash generated from operating activities was $253 million, down 26.2% year-on-year [1] Group 3: Share Buyback - During the reporting period, the company repurchased 16.69 million shares, resulting in a cash outflow of $42.9 million [1]

Core Insights - The company reported an adjusted net profit of $63.6 million for the third quarter, which was below market expectations of $68.9 million [1] - The net sales amounted to $872.7 million, exceeding the forecast of $860.2 million [1] - The net profit for the quarter was $73.5 million [1]

Core Viewpoint - Samsonite (01910) reported a net sales of $2.534 billion for the nine months ending September 30, 2025, representing a year-on-year decrease of 4.2% [1] - The profit attributable to equity holders was $192 million, down 18.6% year-on-year, with basic earnings per share at $0.138 [1] Sales Performance - The decline in net sales is attributed to macroeconomic uncertainties and changes in trade policies, leading traditional wholesale customers to be more cautious in their purchasing [1] - Consumer sentiment has weakened, resulting in reduced demand [1] Profitability Metrics - The gross profit margin for the nine months ending September 30, 2025, was 59.3%, a decrease of 60 basis points from 59.9% for the same period ending September 30, 2024 [1] - The unfavorable change in the regional sales mix, including a decline in sales from the higher-margin Asia region, contributed to the decrease in gross profit margin [1] Strategic Initiatives - Some strategic promotional measures aimed at boosting sales volume also impacted the gross profit margin [1] - The contributions from the TUMI brand and direct-to-consumer (DTC) channels partially offset the negative impacts on sales [1]

Group 1 - The core viewpoint of the article highlights that Samsonite (01910) reported a decline in net sales and profit for the nine months ending September 30, 2025, attributed to macroeconomic uncertainties and changing trade policies [1] - The net sales amounted to $2.534 billion, representing a year-on-year decrease of 4.2% [1] - The profit attributable to equity holders was $192 million, down 18.6% compared to the previous year [1] Group 2 - The basic earnings per share were reported at $0.138 [1] - The gross profit margin for the nine months ending September 30, 2025, was 59.3%, a decrease of 60 basis points from 59.9% for the same period in 2024 [1] - The decline in gross profit margin was primarily due to unfavorable changes in the regional sales mix, including a decrease in sales from the higher-margin Asia region, along with strategic promotional measures to boost sales volume [1] - The negative impacts were partially offset by increased contributions from the TUMI brand and direct-to-consumer (DTC) channels [1]

Core Insights - The company reported a decline in net sales for the first nine months of 2025, amounting to $2.534 billion, compared to $2.646 billion for the same period in 2024, representing a decrease of $111.9 million or 4.2% [1] - The gross profit margin for the first nine months of 2025 was 59.3%, down 60 basis points from 59.9% in the same period of 2024, primarily due to unfavorable changes in regional sales mix and strategic promotional measures [1] - Operating profit for the first nine months of 2025 was $377.6 million, a decrease of $70.1 million or 15.7% from $447.7 million in the same period of 2024 [1] Financial Performance - Adjusted net income for the first nine months of 2025 was $187 million, down $66.7 million or 26.3% from $254 million in the same period of 2024 [2]

Financial Performance - Samsonite Group reported unaudited consolidated financial results for the three and nine months ended September 30, 2025[3]. - For the three months ended September 30, 2025, net sales were $872.7 million, a decrease of 0.6% compared to $877.7 million for the same period in 2024[11]. - Gross profit for the same period was $519.8 million, slightly down by 0.1% from $520.1 million[11]. - Operating profit increased by 4.6% to $139.2 million from $133.0 million year-over-year[11]. - Net profit for the period rose by 10.3% to $78.8 million, compared to $71.5 million in the previous year[11]. - Adjusted net income decreased by 20.2% to $63.6 million from $79.7 million year-over-year[11]. - Adjusted EBITDA was $142.6 million, down 7.7% from $154.6 million in the same period last year[11]. - Adjusted free cash flow decreased by 31.3% to $64.7 million from $94.2 million year-over-year[11]. - For the nine months ended September 30, 2025, net sales were $2,534.3 million, a decrease of 4.2% from $2,646.2 million for the same period in 2024[15]. - Adjusted net income for the nine months ended September 30, 2025, was $187.0 million, a decrease of $66.7 million or 26.3% from $253.7 million for the same period in 2024[18]. Market and Product Strategy - The company aims to expand its product portfolio and market coverage, particularly in non-travel product categories[6]. - Direct-to-consumer (DTC) channel performance, including the expansion of self-operated retail stores and e-commerce platforms, is a key focus area[6]. - The company is committed to upgrading and expanding its retail store network and investing in software to enhance e-commerce capabilities[6]. - The company plans to continue sourcing a majority of products sold in the U.S. from regions outside of China[6]. - The strategy to expand non-travel product categories aims to mitigate the impact of global travel trends on business performance[37]. - The company is focused on continuous investment in innovation and product development to enhance brand and product appeal, which is crucial for sales growth[32]. Economic and Operational Risks - Risks related to consumer spending and overall economic conditions were identified as significant factors affecting business performance[5]. - Economic uncertainties have led to stricter consumer spending habits, negatively impacting demand for discretionary items, including the company's products[34]. - The company is focused on navigating global economic conditions and regulatory changes that may impact its operations[6]. Cash Flow and Financial Position - Future financial conditions, including cash flow and working capital, were highlighted as critical for the next twelve months[6]. - Cash flow from operating activities for the three months ended September 30, 2025, was $131.4 million, a decrease of $18.8 million or 12.5% from $150.2 million for the same period in 2024[14]. - As of September 30, 2025, cash and cash equivalents were $496.7 million, with total outstanding financial debt of $1,749.4 million, resulting in net debt of $1,252.7 million[18]. - The company reported a total equity of $1,562.2 million as of September 30, 2025, an increase from $1,545.0 million as of December 31, 2024[21]. Sales Performance by Region and Brand - Travel products accounted for 64.0% of net sales for the nine months ended September 30, 2025, while non-travel products made up 36.0%[29]. - In North America, net sales for the three months ended September 30, 2025, were $282.2 million, a decline of 4.6% from $295.8 million in 2024[41]. - European net sales increased by 5.6% to $221.0 million for the three months ended September 30, 2025, compared to $209.2 million in 2024[41]. - The sales of the Samsonite brand decreased by $13.9 million or 2.9% year-over-year, with a decline of 10.5% in North America and 4.5% in Asia[52]. - TUMI brand sales increased by 5.7% to $204.3 million compared to $193.3 million in the same period of 2024[50]. Expenses and Profitability - Marketing expenses for the three months ended September 30, 2025, were $53.0 million, a decrease of $2.7 million or 4.9% compared to $55.7 million for the same period in 2024, representing 6.1% of net sales[14]. - Distribution expenses increased by $17.4 million or 6.5% due to the opening of 43 new retail stores and increased employee benefits[75]. - General and administrative expenses decreased by $0.9 million or 1.6%, remaining stable at 6.3% of sales[77]. - The company reported a net profit margin of 8.2% for the nine months ended September 30, 2025, compared to 9.7% in the previous year[164]. Debt and Financing - The company’s total borrowings, net of deferred financing costs, were $1,743.2 million as of September 30, 2025[168]. - The company entered into a new interest rate swap agreement effective from August 30, 2024, which will fix approximately 31% of the principal amount of past senior credit facilities at a SOFR rate of about 4.6%, reducing interest rate risk[177]. - The new credit agreement includes $800.0 million in senior secured A term loans and $494.0 million in senior secured B term loans, totaling $1.294 billion in new term loan credit facilities[181]. Shareholder Returns - The company declared a cash dividend of $150.0 million to shareholders for the year ended December 31, 2024[18]. - The company repurchased 16,690,800 shares under its share repurchase program, resulting in a cash outflow of $42.9 million[18].

自发行2033年到期优先票据筹集的所得款项，连同现有现金以及新优先信贷融通项下的借款，已用于： 悉数偿还2026年到期优先票据本金总额3.5亿欧元(连同2026年到期优先票据的任何应计及未付利息);及 支付与此相关的应付费用、成本及支出。 新秀丽(01910)发布公告，有关Samsonite Finco发行本金总额3.5亿欧元息率4.375%的2033年到期优先票 据及本公司完成了新优先信贷融通的银团贷款安排及分配的相关事宜。于2025年11月11日，购买协议项 下所有先决条件均已达成，契约已签立，并已完成发行2033年到期优先票据。 ...