Samsonite International S.A. (1910.HK), the Hong Kong-listed luggage manufacturer, is pursuing a dual listing on the US stock market. The company, headquartered in the US, believes this move will align its business strategy with its global footprint and attract a wider investor base, particularly in the US. This decision comes as Samsonite seeks to increase trading volume and expand its reach beyond Hong Kong, where trading activity is relatively low and the company’s brand recognition among local investors is limited.
Samsonite’s pursuit of a US listing follows the footsteps of other international brands like L’Occitane and Prada, who have also explored expanding their listings beyond Hong Kong. Samsonite initially debuted on the Hong Kong Stock Exchange in 2011 with the aim of raising its profile in the region and attracting Asian investors.
The company’s interim results announcement revealed its plans for a US listing, alongside sales figures for the first six months of 2024. While sales dipped slightly by 0.4% to $1.77 billion year-on-year, the company’s sales on a constant currency basis saw an increase of 2.8%. The year 2023 was a record year for global travel as people returned to the road after the pandemic.
Samsonite’s flagship brand, Samsonite, recorded a 5.8% sales increase across all regions, while Tumi saw a modest growth of 0.3%. However, the American Tourister line experienced a slight decline of 0.9%. Despite the overall sales dip, the company’s gross profit margin rose from 58.8% to 60.2% due to increased sales through direct-to-consumer channels, a shift in brand mix, and a disciplined approach to promotional discounts. This resulted in a 7.7% year-on-year rise in profit to $164.3 million.
While acknowledging the positive trends in global travel and tourism, the company acknowledged heightened macroeconomic uncertainties and softening consumer sentiment in certain markets would continue to impact its performance in the remaining months of 2024. Reflecting this, year-on-year sales growth slowed to 1.5% in the second quarter, down from 4.1% in the first quarter. The decline was particularly noticeable in Asia and North America. China, for instance, saw a 3.5% decline in sales quarter-on-quarter, attributed to decreasing consumer demand.
Despite these current challenges, Samsonite remains optimistic about its long-term prospects. CEO Kyle Francis Gendreau emphasized the continued positive trends in global travel and tourism, supporting the demand for their products. He highlighted the ongoing improvement in international tourism arrivals, projected to exceed pre-pandemic levels in 2024. Given the consumer preference for travel over other discretionary spending, Samsonite remains hopeful for a brighter future despite current headwinds.
Samsonite’s stock price experienced a downturn on Thursday following the release of the results, falling by approximately 12% during the trading day.
