（1）按地区划分：Q3 亚洲&北美收入下滑幅度较大。①24Q3 亚洲地区收入3.28 亿美元，同比-12.2%/-11.5%；分国家看，亚洲大部分地区的消费信心都有减弱且面临23Q3 的较高基数，其中中国区域收入24Q3 固定汇率下同比-14.9%、印度-24.3%。②北美洲收入2.96 亿美元，同比-7.9%，主要由于客流减少、高端消费下滑及批发商趋于谨慎，区域内Tumi 和美旅收入均出现双位数下滑。③欧洲收入2.09 亿美元，同比-2.3%/-1.7%。④拉丁美洲收入0.45亿美元，同比-8.3%/+13.7%。欧洲及拉丁美洲的也出现放缓迹象。The company released 24Q3 results, which were affected by a combination of factors such as a high base for the same period last year, weakening consumer confidence in core regions, and a decline in global high-end consumption. The company's third-quarter revenue was -8.3% year-on-year, and net profit to mother was -39.1% year-on-year. In terms of revenue split, demand in multiple regions is weakening, and Samsonite's main brand is more resilient. In addition, changes in brand structure and cost investment affected profitability during the quarter, and the adjusted EBITDA profit margin was 2.7 pct year over year. Since the third quarter's performance fell short of expectations, management said that Q4 has improved compared to Q3. We expect the company's revenue side to drop slightly for the full year of 2024. The net profit scales from 2024 to 2025 will be 0.359 billion US dollars and 0.396 billion US dollars respectively, with year-on-year growth rates of -14% and +10%, respectively. The closing prices on November 15 correspond to 24PE9.7X and 25PE8.8X, maintaining the “Highly Recommended” rating.
24Q3 The company's performance fell short of expectations, and the decline in revenue and profit increased. On the revenue side, the company achieved net sales of 0.878 billion US dollars in 24Q3, -8.3% year-on-year, and -6.8% year-on-year under the fixed exchange rate; cumulative net sales of 2.646 billion US dollars in the first three quarters, -3.2% year over year, and -0.6% year over year under fixed exchange rate. On the profit side, 24Q3 achieved net profit attributable to mother of 0.066 billion US dollars, and -34.2% year over year under fixed exchange rate; cumulative net profit to mother for the first three quarters was 0.236 billion US dollars, -7.5% year over year, and -0.4% year over year under fixed exchange rate.
In terms of revenue split, demand in multiple regions is weakening, and Samsonite brands are more resilient (the growth rates described below are all shown at the same time as the year-on-year growth rate at the reporting level/fixed exchange rate):
(1) By region: Q3 Asia & North America saw a significant decline in revenue. ① The revenue of the 24Q3 region was 0.328 billion US dollars, -12.2%/-11.5%; by country, consumer confidence in most regions of Asia weakened and faced a high base of 23Q3. Among them, China's revenue was -14.9% year-on-year and -24.3% year-on-year at the 24Q3 fixed exchange rate. ② North American revenue was 0.296 billion US dollars, -7.9% year-on-year. Tumi and US travel revenue in the region both experienced a double-digit decline, mainly due to reduced passenger traffic, declining high-end consumption, and the cautious trend of wholesalers. ③ European revenue was $0.209 billion, -2.3%/-1.7% YoY. ④ Latin America's revenue was $0.045 billion, -8.3%/+13.7% YoY. Europe and Latin America are also showing signs of slowing down.
(2) By brand: Samsonite brands are more resilient. ① In 24Q3, Samsonite's revenue was 0.479 billion US dollars, -3.9%/-2.2% year-on-year. The brand grew in North America, while the rest of the world declined. ② Tumi's revenue was 0.193 billion US dollars, -9.5%/-8.9% year-on-year. The brand showed growth in Europe and Latin America, while revenue declined in Asia and North America, which was more obvious due to the decline in high-end consumption. ③ US travel revenue of $0.144 billion, -17.0%/-15.1% year-on-year, declined in all regions.
(3) By sales channel: The decline in wholesale channels is more obvious. 24Q3 wholesale channel revenue was 0.528 billion US dollars, -11.5%/-10.4% year-on-year; the decline in wholesale revenue in multiple regions was greater than DTC. The decline was more obvious in Asia, and North America was also pressured by dealers to be careful to pick up goods. DTC channel revenue was $0.35 billion, -3.1%/-0.8% YoY; of these, DTC retail sales were -4.2%/-1.8%/, with a net increase of 21 to 1104 self-operated retail stores during the quarter; DTC e-commerce revenue was +0.2%/+2.1% YoY.
(4) By product category: 24Q3 tourism product revenue was 0.589 billion US dollars, -8.7%/-7.3% YoY; revenue from non-travel products was 0.289 billion US dollars, -7.7%/-5.7% YoY.
Changes in the brand structure affected the gross profit margin, and the adjusted EBITDA profit margin declined due to maintenance of expenses.
The overall gross margin of the 24Q3 company was -0.3 pct to 59.3% year over year. The decline in the share of the high-margin brand Tumi affected the gross profit margin, but due to the increase in the share of DTC channels and strict control of discounts, the overall gross margin decline was small.
The 24Q3 marketing/distribution/SG&A expense ratio was +0.1 pct/+2.9 pct/ -0.4 pct to 6.3%/6.3%, respectively. Among them, the increase in distribution expenses was mainly due to the opening of self-operated retail stores; the marketing expenses rate increased steadily and slightly, and the target for the whole year will be lowered to less than 7%. Under the combined influence, the company's 24Q3 adjusted EBITDA profit margin was -2.7 pct to 17.6% year-on-year.
Inventory turnover has accelerated, cash flow from operating activities is sufficient, leverage ratio has declined, and capital structure continues to improve. As of September 30, 2024, the company's average inventory turnover was 174 days, down 5 days from the previous year; net cash flow from operating activities was $0.15 billion, +1.9% over the same period in '23, which is sufficient cash flow. On September 30, 2024, the company's net leverage ratio was 1.68x, down from 1.81x in the same period last year, and the capital structure continued to improve.
Profit forecast and investment rating: Overall spending intentions were weak, and the company's performance in the third quarter fell short of expectations, but management said that Q4 has improved compared to Q3 so far, and we expect the company's revenue side to remain flat and decline slightly throughout the year. On the profit side, due to changes in the brand structure and pressure on the cost side, we lowered our profit forecast. We expect the company's net profit to be 0.359 billion US dollars, 0.396 billion US dollars, and 0.433 billion US dollars respectively from 2024 to 2026, with year-on-year growth rates of -14%, +10%, and +9%, respectively. The closing prices on November 15 correspond to 24PE9.7X and 25PE8.8X, maintaining the “Highly Recommended” rating.
Risk warning: Downstream demand and product sales fall short of expectations, risk of declining brand share due to increased market competition, risk of falling short of expectations in US listing progress, risk of falling profit margins, risk of exchange rate fluctuations, systemic risk of Hong Kong stocks, etc.
