Samsonite sees profit jump by 33% in third quarter of 2018
Luxury luggage market leader Samsonite reported earnings for the third quarter of 2018 this week, demonstrating an increasingly profitable business that is holding up well despite the current trade disputes between China and the US. That said, “holding up well” and “thriving” are not the same thing: Samsonite is still seeing sales growth in China, but it’s slowed from the first half of the year. Investors shouldn’t be too surprised about this – the company warned about the impact of a trade war way back at the end of August.
Samsonite’s share price has been mostly flat over the week
Source: Yahoo Finance
Samsonite said that net profits for the quarter increased by 33.3%, year over year, coming in at $75.5 million. Sales were up by 10% against the year-ago quarter, and operating profits grew by 7% over the same period. For the full year, Samsonite said it expects to see sales growth of 9%. Strength in the quarter ended September was helped by the outperformance of its Tumi and American Tourister brands.
In the company’s earnings call, CEO Kyle Gendreaux made the following comment about the fourth quarter: “when I look at it generally, the economic outlook is a bit more cloudy, largely to do with some of the macro noises we have, the U.S. China trade tensions, which I think continues to impact Chinese consumers. I think it’s impacting customers of ours in the U.S. and we’re seeing that impact customers moving around, particularly into the U.S.”
However, he added that the company was “very well positioned to capitalize on the holiday sales” and “super excited” about its great position in the Chinese market.
Dominion holds Samsonite in its Global Trends Luxury Fund.
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