Samsonite International S.A. reported sales from its Gregory backpack brand grew 23 percent in the third quarter while an overall recovery in travel led to similar gains for the overall company.
Consolidated net sales were $957.7 million for the three months ended September 30, an increase of 21.1 percent on a reported basis and 21.2 percent constant currency.
Among its largest brands, sales of Samsonite reached $498.2 million, up 20.1 percent on a reported basis and 20.1 percent currency-adjusted. Tumi’s sales were $213.7 million, rising 29.3 percent on a reported basis and 29.8 percent on a currency-neutral basis. American Tourister sales totaled $173.8 million, increasing 19.4 percent on a reported basis and 19.8 percent on a currency-neutral basis.,
Other Brands’ sales amounted to $71.9 million, up 10.3 percent on a reported basis and 9.3 percent on a currency-neutral basis. Other Brands include certain other brands owned by Samsonite, such as Gregory, High Sierra, Kamiliant, ebags, Xtrem, Lipault, Hartmann, Saxoline, and Secret, as well as third-party brands sold through the Group’s Rolling Luggage and Chic Accent retail stores.
Kyle Gendreau, CEO, said on a call with analysts, “I think the way to sum up is we had an outstanding Q3 for Samsonite International. Our momentum from the first half carried very strongly into Q3, driving significant improvements in financial performance. I would label it as record performance on many fronts. We achieved record Q3 results in net sales. Our gross margin, adjusted EBITDA, adjusted EBITDA margin, and our adjusting and income were all tremendous as I’ll walk through in a second. This strong growth came across all of our leading brands, particularly strength in our higher margin brands Tumi and Samsonite, but all brands delivering tremendous growth.”
Net sales in the travel product category increased by $105.9 million, or 19.7 percent (+19.7 percent constant currency), reflecting a “robust recovery” in leisure and business travel and increased demand for the group’s products. Gendreau said, “Travel products have continued to represent approximately two-thirds of the net sales. And that is both in the business travel segments, as well as the leisure, both are extremely robust.”
Total non-travel product category net sales, which comprises business, casual, accessories and other products, increased by $60.8 million, or 24.1 percent (+24.3 percent constant currency), primarily driven by strong net sales growth in the Asia region and for Tumi-branded products.
Gendreau said, “We’re trying to continue to push through innovation on our non-travel segments to continue that portion of the pie as well. There is still a lot of TAM available for the non-travel segments and so that’s an area where we have a lot of focus both in terms of backpacks, briefcases, non-structured travel products such as duffels, et cetera, and trying to continue to grow that portion of the pie.”
Operating profit in the quarter reached $182.6 compared to $121.8 million for the corresponding period in 2022, an improvement of US$60.9 million, or 50.0 percent. Profit attributable to the equity holders was $115.4 million compared to $58.2 million, an improvement of 98.2 percent.
Adjusted EBITDA improved 44.7 percent to $194.0 million from $134.1 million a year ago. Adjusted net income nearly doubled to $125.7 million compared to $64.9 million a year ago.
For the fourth quarter, Gendreau predicted sales would grow in the “upper teens.” He noted that while markets that reopened earlier, particularly North America and Europe, are starting to see travel “normalize” after undergoing a strong recovery, but outbound travel for China is in the “early stages of recovery” and that’s “expected to continue, I think at a more steady level in the coming quarters.”
Photo courtesy Gregory