Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Samsonite Group SA (SMSEY, Financial) is confidently managing through market uncertainties with agility and focus, leveraging its strong global teams.
- The company has a strong correlation with travel, which remains a priority for consumer spending, with expected growth in the near term.
- Samsonite Group SA (SMSEY) has a strong financial position, focusing on driving profitable and sustainable growth while maintaining cost discipline.
- The company is taking decisive actions to mitigate the impact of tariffs, leveraging its diversified and strong sourcing platform.
- Samsonite Group SA (SMSEY) continues to innovate with new product launches, such as the Paralux and Lite Geo collections, which are expected to perform well in the market.
Negative Points
- The macroeconomic environment is uncertain, impacting consumer sentiment and demand, particularly in North America.
- Sales in Q1 2025 decreased by 4.5% compared to the previous year, with a notable decline in the American Tourister brand.
- Gross margins slightly decreased to 59.4% from 60% last year, affected by geographic sales mix.
- The company faces significant uncertainty regarding tariffs, which could impact demand and cost pressures in the back half of the year.
- Consumer confidence is impacted in North America and parts of Asia, affecting retail traffic and demand.
Q & A Highlights
Q: At the beginning of the presentation, you mentioned slightly better current trading in Asia and LATAM. However, you later implied that Q2 should be in line with Q1. Could you clarify this? Also, how do you see the correlation between travel trends and sales growth for your business? Lastly, regarding pricing, how much have you priced so far this year, and is this global or more US-centric?
A: On a blended basis, Q2 will look similar to Q1, with slight improvements in Asia and LATAM. The travel trends remain correlated with our sales, and while consumer sentiment affects us, travel remains a priority. We are taking pricing actions to offset tariff impacts, primarily in the US, but it's fluid, and we're managing it carefully.
Q: Regarding the sales trend in Q2, do you see any order pull forward, especially in North America? Also, could you elaborate on the broad-based weakness in Asia and its continuation into Q2?
A: There isn't significant order pull forward in Q2. In Asia, while China and India show positive trends, other regions like South Korea are impacted by political instability. Overall, Asia's performance is steady, with slight improvements expected in Q2. EBITDA margins are expected to be better in Q2 due to seasonality.
Q: With American Tourister down 10%, what is your strategy for this brand? Are there plans to expand the price range or focus on profitability?
A: The strategy for American Tourister remains intact. The decline is due to cautious wholesale buying and consumer sentiment, not a strategic issue. We maintain a wide price range, especially in Asia, and expect improvements as conditions stabilize.
Q: With the tariff overhead in the US, how are you managing relationships with suppliers and wholesalers, especially with the peak season approaching?
A: We are in constant communication with our customers, managing the timing of pricing actions carefully. We have long-standing relationships and are working closely to ensure we are well-positioned for the peak season, despite the uncertainty surrounding tariffs.
Q: Can you provide more details on the impact of tariffs and your mitigation strategies?
A: We are taking decisive actions to mitigate tariff impacts, including strategic price increases and leveraging our diversified sourcing platform. We expect tariffs to resolve over time, and our focus is on neutralizing cost impacts through supplier negotiations and product reengineering.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
