Samsonite International: Watch Capital Return, Deleveraging Plans

Core Viewpoint - Samsonite International S.A. is expected to complete its $200 million share repurchase plan by the end of 2024, with a favorable outlook on capital return and debt reduction efforts, leading to a potential shareholder yield of 9.5$200 million buyback plan in June 2024, aiming to complete it by the end of 2024, with $30 million already spent in the first two weeks of buybacks [2][3] - The company’s potential buyback yield for FY2024 is estimated at 5.5$150 million was paid out in July 2024 for FY2023, with expectations to maintain a similar dividend for FY2024 [3] Deleveraging Progress - As of end-Q2 2024, Samsonite's net debt-to-EBITDA ratio was 1.39 times, significantly improved from 3.68 times in Q2 2022 and 2.15 times in Q2 2023 [4] - Projections indicate further reductions in net leverage to 0.98 times by December 2025 and 0.63 times by December 2026 [4][5] - The company is focused on optimizing working capital, with a net working capital-to-revenue ratio of 14.6% for Q2 2024, an improvement from 16.2% in the previous quarter [4] Financial Performance Expectations - Free cash flow projections for Samsonite are $502 million for FY2025 and$556 million for FY2026, supporting further debt reduction [5] - The current market values Samsonite at a forward P/E ratio of 9 times, compared to a high-teens range when the company was in a net cash position in FY2015, suggesting potential for valuation multiple expansion [5][7]