Key investment points

The company released its quarterly report for the year 24. In 24Q3, it achieved operating income of 0.88 billion US dollars, -8.3%, excluding exchange impact of -6.8%, mainly due to weakening demand performance in Asia, North America and Europe. Adjusted ebitda profit of 0.15 billion US dollars, -20% year over year, net profit to mother of 0.066 billion US dollars, -39% year over year. Weakening retail sales temporarily put pressure on performance.

Weakening retail sales in China and India have put pressure on revenue in Asia, and North America is being cautious about taking goods.

Looking at 24Q3 by region, Asia achieved revenue of 0.33 billion US dollars (-12%, accounting for 37%), including China 0.08 billion US dollars (-14% year over year), India 0.05 billion US dollars (-25% year over year), Japan 0.05 billion US dollars (-2% year over year), South Korea 0.04 billion US dollars (-14%), weakening Chinese consumer confidence and increasing competitive pressure in the Indian market.

North America achieved revenue of 0.3 billion dollars (-8% YoY, 34%), including the US $0.28 billion (-7% YoY) and Canada's 0.02 billion USD (-23% YoY), which is expected to be mainly due to a decline in passenger traffic and a decrease in consumer spending on luxury goods, and wholesalers being cautious about picking up goods.

European revenue was $0.21 billion (-2.3% YoY, accounting for 24%), Belgium $0.05 billion (YoY +10%), Germany $0.03 billion (YoY -20%); Latin America's revenue was $0.05 billion (-8.3% YoY, excluding exchange impact +13.7%).

Samsonite's beneficial brand positioning shows resilience. TUMI was affected by weak luxury consumption in Asia and North America. By brand, Samsonite achieved revenue of 0.48 billion US dollars, -4% year over year, excluding exchange impact. Looking at Samsonite brands by region, Asia was -11%, North America +3.4% year over year, and Europe -2% year over year, mainly from Asia.

The TUMI brand achieved revenue of 0.19 billion US dollars, -10% year over year, excluding exchange impact. By region, TUMI was -7.5% year over year, North America -14% year over year, and Europe +6% year over year. Weak luxury consumption in Asia and North America temporarily put pressure on revenue, but in the medium to long term, TUMI, as a luxury brand, has the potential to rise, occupy consumer minds with high-performance products, and will continue to be the main engine of growth in the future.

US travel brands achieved revenue of 0.14 billion US dollars, -17% year over year, excluding exchange impact of -15% year over year. Looking at US travel regions, Asia was -17% year over year, North America -28% year over year, and Europe -9% year over year. North American wholesalers declined significantly due to inventory pressure and prudent handling of goods.

DTC e-commerce showed steady performance, and North American wholesalers were cautious in picking up goods, which declined significantly.

Looking at the 24Q3 sub-channel, the wholesale channel achieved revenue of 0.53 billion US dollars, -12% year over year, mainly due to weak retail sales in China, strong competitive pressure in India, and prudent delivery of goods by North American wholesalers.

DTC's offline self-operating revenue was -4.2% year-on-year, bucking the trend of weakening retail in Q3, opening a net of 21 stores, with same-store sales -5.7%, including -9% in Asia, -8% in North America, and 4% in Europe. Offline traffic fell short of expectations, leading to a decline in the same store. In 24Q3, DTC e-commerce revenue was 0.09 billion US dollars, +0.2% year over year. Excluding exchange impact of +2%, e-commerce revenue bucked the trend.

Gross margin declined slightly due to changes in the regional revenue structure, and store opening expenses continued to be invested against the trend.

The 24Q3 gross profit margin is 59.3% (-0.3pp year over year), which is expected to be mainly due to a significant decline in revenue in the Asian region with higher profit margins and higher-end TUMI brands. 24Q3 distribution expense rate/marketing expense rate/management expense rate/financial expense ratio were +2.9pct/+0.1pct/-0.4pct/ -0.6pct to 30.4%/6.3%/4.0% year-on-year, bucking the trend, distribution cost rate +2.9pp, continuous advertising marketing cost rate +0.1pp, and continuous refined management led to management expense ratio -0.4pp. In 24Q3, the adjusted ebitda profit margin was 17.6% (-2.7pp), and the net profit margin was 7.5% (-3.8pp). Revenue declined, but sales and marketing expenses continued to be invested, putting temporary pressure on profit margins.

Profit forecasting and valuation.

The company is expected to achieve revenue of 3.6/3.9/4.1 billion US dollars in 24-26, -1.4%/+6.5%, respectively, and net profit to mother of 0.38/0.42/0.46 billion US dollars, respectively, -9.1%/+10.6%/+9.5%, respectively. As of November 14, the PE corresponding to the closing price is 9/8/7 times. Weakening retail sales have temporarily put pressure on performance. Without changing the assets of the three high-quality brands to ensure steady development, we expect the US stock listing to successfully increase liquidity. We expect a dividend rate of 30% in 24, combined with repurchases of no more than 0.2 billion US dollars, and a dividend rate of about 9%, maintaining the buying rating.

Risk warning

Global travel demand is slowing; same-store growth falls short of expectations; store expansion falls short of expectations.