‘Economic headwinds’ end glory days of Samsonite sales
“Economic headwinds” in the latest quarter have brought an end to the stellar run of Samsonite sales growth.
For the March quarter, the world’s largest luggage retailer has reported a fall in sales of 2.4 per cent and 6.3 per cent when reported in US dollars. Profit attributable to shareholders slumped by 48.2 per cent to US$22.8 million.
In Asia, overall sales fell 2.1 per cent, but the group continued to achieve net sales gains in both Japan (up 4.1 per cent) and Hong Kong (up 5.5 per cent) during the quarter.
Last full year, net Samsonite sales were up 8.4 per cent on a constant-currency basis to US$3.797 billion in the year to December 31. Profit attributable to shareholders rose by 23.9 per cent before extraordinary items.
The company has consistently reported quarter-on-quarter sales growth during the last several years, although this was heavily influenced by the acquisition of Tumi and other businesses over the same period.
Commenting on the results, CEO Kyle Gendreau said economic headwinds have continued to impact a number of the company’s key markets during the first quarter, particularly the US, South Korea, Chile and the business-to-business market segment in China.
“Excluding these four markets, our net sales grew by a healthy 3.4 per cent, driven by a 4.4 per cent increase in Asia (excluding South Korea and business-to-business sales in China) and a 2.3 per cent growth in Europe.”
In China, a sharp decline in business-to-business orders caused net sales to decrease by 8.3 per cent year on year. Excluding business-to-business orders for both periods, net sales in China increased by 5.9 per cent, driven by a 15.1 per cent rise in direct-to-consumer sales, despite weak consumer sentiment amid concerns about trade relations with the US.
By brand, Tumi sales in Asia soared 17 per cent and in Europe by 22.5 per cent.
Net sales of the Samsonite brand were down by 4.2 per cent year-on-year to $373 million during the quarter, primarily due to declines in the US, China and South Korea.