Samsonite International S.A. reported that sales for High Sierra were flat in 2018 while sales for Gregory grew 12 percent.
According to the annual statement from its parent, Samsonite International, High Sierra’s sales reached U.S. $73.7 million against $73.8 million, a decline of 0.1 percent and flat on a currency-neutral basis.
Gregory’s revenues were $58.0 million against $51.8 million, up 12.0 percent on a reported basis and 10.6 percent on a currency-neutral basis.
Overall, the company, based in Hong Kong, increased sales by 8.4 percent, on a constant currency basis1, to US$3.8 billion for the year ended December 31, 2018. Excluding the contributions from eBags, which was acquired on May 5, 2017, net sales increased by 7.5 percent year-on-year.
The company’s brands include Samsonite, Tumi, American Tourister, Speck, High Sierra, Gregory, Lipault, Kamiliant, Hartmann and eBags.
Driven by the strong net sales growth and gross margin expansion, the group operating profit increased by 10.3 percent, to $467.4 million for 2018.
The group’s gross profit margin rose to 56.5 percent for 2018, up by 40 basis points from 56.1 percent for the previous year.
This increase was primarily attributable to improvements in the Tumi brand’s gross margin, and a higher proportion of net sales coming from the DTC distribution channel, partially offset by a shift in brand mix due to the strong growth of American Tourister.
Distribution expenses, as a percentage of net sales, increased to 31.9 percent for 2018 from 30.7 percent in 2017, mainly as a result of higher fixed costs associated with the group’s targeted expansion of bricks-and-mortar retail in the DTC distribution channel. Marketing expenses were 5.8 percent of net sales in 2018, compared to 5.9 percent for 2017, reflecting the group’s ongoing commitment to enhance brand and product awareness through focused marketing activities and promotional campaigns to support sales growth worldwide. General and administrative expenses decreased to 6.1 percent of net sales in 2018 from 6.9 percent in 2017, largely attributable to a reduction in share-based compensation expense.
The group completed the refinancing of its original senior credit facilities in April 2018. In conjunction with the refinancing, the group incurred a one-time non-cash charge of $53.3 million to write-off the deferred financing costs associated with the original senior credit facilities. Excluding this charge, the group’s interest expense decreased by $8.9 million to $71.2 million for 2018, from $80.2 million for the previous year.
The group’s profit attributable to the equity holders increased by 23.9 percent, excluding the noncash charge of $53.3 million to write-off the deferred financing costs associated with the original senior credit facilities in conjunction with the Refinancing and the related tax impact, the non-cash income tax benefit related to the 2017 U.S. tax reform and a one-time tax expense associated with a legal entity reorganization in2017. Profit attributable to the equity holders, as reported, decreased by $97.5 million, or 29.2 percent, from the previous year to $236.7 million due to the factors mentioned above.
