Samsonite Profit Drops 33% Despite Sales Gain, Unveils $50M Buyback

Samsonite Group SA (01910.HK) reported a 33.2% drop in first-quarter net profit to $32.2 million even as revenue grew, prompting the luggage maker to announce a new $50 million share buyback plan.

"We made solid progress executing on our strategic priorities to drive our next phase of growth," said Kyle Gendreau, Chief Executive Officer, in a statement. "We are confident in our ability to execute on our strategic priorities and navigate through macroeconomic volatility to accelerate long-term growth."

The company's revenue for the quarter ended March 31 rose 4.1% to $829.1 million, or 0.4% on a constant currency basis. However, adjusted EBITDA fell 14.6% to $109.0 million, with the corresponding margin contracting to 13.1% from 16.0% a year earlier. The company attributed the lower profitability to higher marketing and distribution expenses, including inflationary pressures on wages and rents.

The profit decline highlights the pressure from inflation and geopolitical headwinds, particularly in the Middle East, which impacted sales. The new buyback program, alongside a previously declared $140 million dividend, signals a commitment to shareholder returns as the company navigates slowing growth following the post-pandemic "revenge travel" surge.

By region, Asia saw net sales grow 1.3% on a constant currency basis, while Europe and Latin America grew 0.8% and 4.7%, respectively. North America, however, saw a 1.7% decline amid what the company called macroeconomic uncertainties affecting consumer spending.

The company’s direct-to-consumer channel was a bright spot, with sales growing 4.2% in constant currency, led by an 11.3% jump in e-commerce. The TUMI brand delivered its third consecutive quarter of positive growth, with sales up 0.5%.

Looking ahead, Samsonite expects constant currency net sales to grow in the low-single-digit range for the full year 2026. The company is also completing preparations for a potential dual listing of its securities in the United States, which it intends to complete in 2026.

The results show Samsonite's struggle to maintain profitability amid rising costs and uneven global demand. Investors will watch the second quarter results closely for the impact of peak marketing spend and whether the company can maintain its strong 59% gross margin profile.

This article is for informational purposes only and does not constitute investment advice.