Good time for Samsonite
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Buoyed by its Tumi acquisition, Samsonite sales soared in the last quarter in every market, even in its weakest link, Asia.
The world’s largest luggage maker and retailer achieved a net sales boost of 22.8 per cent in the three months to September 30. Its strongest performance was the US where net sales increased by 22.7 per cent to US$765.3 million.
In Asia, sales rose 13.4 per cent – although excluding figures for Tumi, acquired on August 1 and contributing to two months of sales, only by 3.7 per cent.
North America sales rose 39.1 per cent, or by 9.8 per cent excluding Tumi, and in Europe by 16.5 per cent, or 9.4 per cent excluding Tumi. And in Latin America it was ahead by 26.2 per cent including and excluding Tumi.
CEO Ramesh Tainwala said there is no doubt that the global trading environment continued to be challenging, yet despite the headwinds, all of Samsonite’s regions delivered positive constant currency net sales growth during the third quarter of 2016.
“It is especially encouraging to see organic sales growth picking up in both the US and China, our two largest markets, while Europe and Latin America have maintained their growth momentum.”
Gross profit increased by 26.5 per cent year-on-year to $419.8 million and gross profit margin increased to 54.9 per cent, from 53.2 per cent.
“It is especially encouraging to see organic sales growth picking up in both the US and China, our two largest markets, while Europe and Latin America have maintained their growth momentum.”
On the negative side, operating profit decreased by 16.4 per cent year-on-year to US$71.7 million for the quarter, largely due to acquisition costs. Excluding those, operating profit increased by 23.7 per cent.
Asia performance
After a relatively lacklustre first half, both China and India saw net sales growth improve to 8.1 per cent year-on-year in the third quarter of 2016. Net sales in Hong Kong (including Macau) increased by 73.6 per cent, driven primarily by the addition of the Tumi brand. Excluding Tumi, net sales in Hong Kong (including Macau) decreased by 11.5 per cent. The decline was driven primarily by fewer Chinese shoppers visiting from the mainland.
Japan and Australia continued to record strong year-on-year net sales growth of 29.7 per cent and 13 per cent, respectively. Excluding Tumi, net sales in Japan increased by 7.4 per cent. Also, the group continued to penetrate the emerging markets within the region with notable net sales growth in Thailand and Indonesia of 7.6 per cent and 3.1 per cent, respectively, year-on-year. Net sales in South Korea were up slightly year-on-year on a constant currency basis due to weak consumer sentiment.
Growth by brand
Globally, excluding Tumi, sales were driven by the Samsonite (up 10.2 per cent) and Kamiliant (up 576.1 per cent). Other brands including Hartmann (up 58.8 per cent), Lipault (up 342.8 per cent) and Gregory (up 20.4 per cent) also experienced solid net sales growth. The increase was partially offset by an 11.3 per cent decrease in net sales of the American Tourister brand.
Questions & Answers
Q.Why did Samsonite's operating profit decrease in the last quarter despite significant sales growth?
Why did Samsonite's operating profit decrease in the last quarter despite significant sales growth?
Operating profit decreased by 16.4 per cent year-on-year to US$71.7 million, largely due to acquisition costs. When excluding these costs, the operating profit actually increased by 23.7 per cent for the quarter.
Q.Which specific markets in Asia showed strong sales growth beyond the Tumi acquisition impact?
Which specific markets in Asia showed strong sales growth beyond the Tumi acquisition impact?
Japan saw a 7.4 per cent increase in net sales excluding Tumi. Thailand and Indonesia also showed notable net sales growth of 7.6 per cent and 3.1 per cent respectively, in emerging markets within the region.
Q.What caused the decline in net sales in Hong Kong and Macau when Tumi figures are excluded?
What caused the decline in net sales in Hong Kong and Macau when Tumi figures are excluded?
Excluding Tumi, net sales in Hong Kong and Macau decreased by 11.5 per cent. This decline was primarily driven by fewer Chinese shoppers visiting from the mainland, impacting sales in the region.
Q.Which of Samsonite's individual brands, excluding Tumi, saw the most significant sales growth?
Which of Samsonite's individual brands, excluding Tumi, saw the most significant sales growth?
Globally, excluding Tumi, the Kamiliant brand experienced the most significant sales growth, increasing by 576.1 per cent. Other brands like Lipault and Hartmann also saw substantial increases.
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