Samsonite sees “very satisfying results” in first quarter
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Samsonite sees “very satisfying results” in first quarter

World leader in luxury luggage Samsonite reported earnings for its first quarter in May, demonstrating results that the company’s CEO Ramesh Tainwala describes as “very satisfying”. Tainwala noted that there had been “growth across all regions and across all brands,” and that the company was continuing to shift more of its sales through Ecommerce channels – although, there is undeniably still work to do in that area. Nonetheless, the overall picture was highly positive, with chief financial officer Kyle Gendreau noting that Samsonite continues to have “a very strong balance sheet.”

Samsonite’s share price has risen by 12% over as many months

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Source: Yahoo Finance

For the first quarter, Samsonite saw net sales rise by 15.5%, year over year and at constant currency. This figure includes sales made by Samsonite’s eBags brand, which it acquired on May 5 2017. As a result, eBags wasn’t included in last year’s comparables, and this year’s figure, although technically correct, may imply an overly successful 12 months. To get an idea of Samsonite’s organic sales growth, we can strip out the impact of eBags sales, which would result in a still-very-positive net sales increase of 11.1% from the same period in the previous year.

The company saw similarly positive results across a wide range of metrics. Taken against the first quarter of 2017, Samsonite reported an increase in Earnings Before Interest Tax Deductions and Amortisation (EBITDA) of 11.4% to $12.5 million. Its adjusted net income rose by an even better 15.6% from the year-ago quarter (though this is partly down to a reduced effective tax rate) to $6.8 million.

This positive performance was spread across all regions, and all brands (with the single exception of Hartman – a tiny part of Samsonite’s business – that saw net sales fall from $5.7 million in the first quarter of 2017 to $5.3 million this time around). Other brands saw incredible growth: most importantly, the company’s “big three” brands (Samsonite, Tumi and American Tourister) all saw strong net sales growth. Respectively, those brands saw net sales rise by 5.2%, 19.7% and 22.3% against the year-ago quarter, and reported in constant currency.

Disclosure Dominion holds Samsonite in its Global Trends Luxury Fund.


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