Samsonite has faced persistent growth headwinds in both revenue and profit, particularly due to a deleveraging effect weighing on earnings. Nevertheless, the company delivered a steady 1Q26 topline performance amid the Middle East conflict, signaling underlying demand resilience.

Topline growth steady – 1Q26 Net sales rose 4.1% YoY to USD829mn (+0.4% on a constant-currency basis), largely in line with market consensus. The improvement was primarily driven by DTC channels and the core Samsonite brand.  The core brand recorded 5.8% YoY net sales growth (+1.3% constant currency). Meanwhile, the Asia segment (accounting for 38.1% of total net sales) saw net sales increase 3.0% YoY (+1.3% constant currency), underpinned by stronger demand in China and South Korea. Excluding the Middle East and India, Asia’s net sales jumped 8.4% YoY (+5.1% constant currency). Thus, while geopolitical conflicts remain a headwind, the core business is still growing in most major markets.

Margin improvement expected in 2H26 – In contrast to the resilient topline, profitability was hit by geopolitical disruptions and higher distribution and marketing expenses (up 10.8% and 12.8% YoY, respectively). As a result, net profit dropped 33.2%, while adjusted EBITDA declined 14.6%, with the adjusted EBITDA margin contracting sharply to 13.1% (compared with 16% in the same period last year). Nevertheless, we believe the increased distribution and marketing spending will support long-term branding and indirectly contribute to topline growth. Management expects the company to maintain similar sales momentum after 2Q26, with a clearer improvement in 2H26, such that full-year 2026 net sales would increase by a LSD percentage.

Cash flow and capital allocation strengthens – Despite the NP drop, it generated robust operating cash flow of USD85.4mn during the quarter, a significant turnaround from USD8.5mn in 1Q25, contributed by disciplined inventory management and tighter working capital control. Net debt down slightly to USD1.07bn from USD1.1bn at end-2025. Moreover, management announced a USD50mn share buyback program. Underlying cash generation remains solid, providing ample financial flexibility to support shareholder returns.

Our view:

We expect Samsonite to deliver stable revenue growth but weaker margins for FY26. Near-term margin pressure poses challenges, as higher oil prices dampen travel demand and put further pressure on global transportation and raw material costs, pushing expenses higher. Moreover, Mgt estimates that distribution and marketing expenses for FY26 will rise to 6.5% of sales, up from 5.7% in 1Q26, aiming to amplify brand awareness and fuel future growth. A potential secondary listing in the US can be a near-term catalyst. The counter is trading at 9.0x FY26 PE. (Research Department)