August 30, 2018 / 2:08 AM / 3 months ago

Strong Tumi, tourism growth boost Samsonite sales

HONG KONG (Reuters) - Luggage maker Samsonite International SA (1910.HK) posted a 16.6 percent growth in first-half net sales, helped by strong performance of its high-end Tumi brand, sending its shares up 8.5 percent on Thursday.

A Samsonite suitcase is displayed at a store in Hong Kong, China March 14, 2017. REUTERS/Bobby Yip

The world’s largest luggage firm said global trading conditions in 2018 have so far been favourable, and the travel and tourism market continues to enjoy robust growth.

“We aim to sustain this momentum as we head into the remainder of the year,” Chief Executive Officer Kyle Gendreau said in a statement late on Wednesday.

“That being said, the global geopolitical and macroeconomic outlook is more uncertain today than it was just a few months ago.”

The Luxembourg-headquartered company said its first-half net sales rose to $1.85 billion from $1.59 billion a year earlier.

Net sales of its Tumi brand increased by 16.6 percent year-on-year, driven by strong growth in North America, Asia and Europe. Core brand Samsonite sales rose 5 percent, while American Tourister sales grew 24.2 percent.

“With the Tumi brand now fully integrated into the group, we are focused on driving the brand’s global growth, especially in the Asian and European markets where it is currently under-penetrated,” Gendreau said.

The company saw its first-half net profit falling 18.7 percent to $67.8 million, including non-cash write-off of deferred financing costs, from $83.4 million profit a year ago.

However, excluding the non-cash write off, profit attributable to equity holders increased by $24 million, or 28.8 percent, it said.

Gross profit margin increased to 56.5 percent for the six months period, from 55.3 percent the same period a year ago.

Shares of Samsonite, which have been under pressure since May after a short-seller attacked its accounting practices, rose as much as 8.5 percent to HK$31.80, their highest since July 30.

Samsonite’s former CEO Ramesh Tainwala resigned less than a week after the attack that involved entities owned by his family, and was taken over by finance chief Gendreau.

Reporting by Donny Kwok; Editing by Gopakumar Warrier

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