Samsonite Group S A

Good morning, good afternoon, and good evening, ladies and gentlemen. Welcome to the Samsonite Group 2026 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please note that this event is being recorded. I would now like to hand the conference over to Mr. Alvin Concepcion, Vice President of Investor Relations. Thank you. Please go ahead, sir.

Thank you. Welcome to the Samsonite Group first quarter conference call. On the call with us today are Carl Gendro, Chief Executive Officer, and Tom Pizzuti, Chief Financial Officer. Before starting today's call, we would like to remind you that any forward-looking statements made on the call involve risks and uncertainties that are subject to the company's provision, as stated in the disclaimers in the company's press release and earnings announcement, and that actual results can differ materially from those described in the forward-looking statements. I'll now turn the call over to Kyle. Okay.

Thanks, everyone. Thanks for joining. And I'm on slide five, ready to roll. So we're excited to report net sales growth continued into Q1, despite the conflict in the Middle East. Our net sales were up 4.1% on a reported basis, up 0.4% on a constant currency basis. Net sales growth across North America and Latin America improved sequentially relative to Q4. Europe remained positive, and Asia grew despite a challenging environment caused by the conflict in the Middle East. Importantly, excluding Middle East and India, the markets that were seeing the most effect from the conflict to date, consolidated net sales grew 5.9% on a reported basis or 1.6% on constant currency basis year over year with sequential improvement overall versus Q4. Net sales growth for Asia, excluding the Middle East and India, was up 8.4% on a reported basis and 5.1% on a constant currency basis year over year. We continue to see success in our D2C and our lifestyle bags category. Our D2C and lifestyle bags outperformed our performance. Our strong portfolio of new and innovative products supported growth in our direct-to-consumer business, and our lifestyle bags grew as well. Lifestyle bags grew almost 4.8%, close to 5%, and our D2C overall grew 4.2%, with our own directly-operated e-commerce channels growing over 11%. Our growth margin remains strong. 59%, reflecting disciplined execution across all of our brands, channels, and product categories. We're focused on elevating our iconic brands via world-class storytelling. We're increasing our marketing spend, as we've signaled in the past. We spent 5.7% of marketing spend in Q1, up 40 basis points from last year, as we invest in delivering sustainable growth. This supported successful new media campaigns such as Samsonite Nexus launch, covered later in the deck, and also 2D Mediterranean Escape, both very successful launches in the first part of the year. We generated very strong cash flow. We have a history of generating strong cash flow. We're up $68 million versus the prior year from a cash flow perspective in Q1. Tom will cover that in a bit more detail in his financial update. And we're poised for improved net sales growth in 2026 overall. We believe we've managed the business well through the current conditions. And as we execute our strategic roadmap and strategic pillars, we expect low single-digit growth net sales for the full year. This is important. This is since potential effects of the conflict in the Middle East do not maturely worsen. If we go to a look at the brands, all brands delivered positive growth adjusting for the Middle East. You can see Samsonite sequential improvement continuing Q3, Q4, and into Q1, 1.4% growth. That was supported by sequential improvements in North America, down 3.1 in Q1 versus down 6 in Q4, and positive growth in Asia and Europe and accelerating growth in Latin America helping the Samsonite story. Tumi continue to deliver positive growth, down a bit from what we saw in Q4, but still positive territory, up 1.1%. Asia is particularly strong, 6.2% growth. And if I adjust for Middle East and India, Asia, Tumi up 8.8%. Europe continues to grow, 5% growth. And Latin America, which we've seen accelerated growth with Tumi, up 14%. We saw North America down slightly, 4.6% down, largely due to the macroeconomic uncertainties impacting consumers in the U.S., particularly impacting retail traffic that we've seen across our U.S. business. A couple of reductions, and I would say a planned reduction in wholesale net sales to off-price retails within the brand as well. I'd like to, while I'm talking about tuning, take this time to acknowledge and welcome Luciano Roddenbush, who's joined our team. I mentioned him on the last call. He's been one month on the job, and I am confident he will help drive global to me sales to its full potential um as he settles in and so welcome aboard luciana uh an american tourister adjusted for conflict grew close to four percent sequential meaningful sequential improvements what we saw on q4 um in asia particularly where american tourist is a big driver if i adjust for india or middle east um up almost four percent um for the quarter as well If we go to regions, I think a similar story is what we see from a growth perspective across the board. Asia, as I said, up 5.1%. We saw meaningful growth within China. And sequential improvement in China, up close to 8% in Q1, from up 3% in Q4. A strong trend carrying into Q2 for China. And Korea, another important market for us, up 8.5% versus up 5.4% for Q4. And overall, Asia has terrific momentum. It's the one market where we're seeing the impacts largely because of the Middle East and India, where both of these are reported in our major. Even despite those, we're still delivering positive growth for Asia. You can see the sequential improvement in North America continuing to move. People are still moving and traveling in the U.S. I think they're more cautious in their spend. We feel that. The other thing I would point in our North America business is we saw a nice improvement from Q4. But within Q1, if I exclude our wholesale e-retailers, our net sales growth was 5.3% in Q1 versus negative 1.7. And that's largely impacted by one of our larger wholesale e-retailers changing their inventory position. And so if I adjust for just that one e-retailer or our e-retail business, our North American business trends are actually very strong, you know, almost matching what we're seeing in other regions in the business. Europe is steady. When I think about markets that are feeling the impact of conflict, India and Middle East, we can see it, but within Europe, you can see some of the impact of consumer sentiment, but still delivering positive growth in Q1, plus 0.8, and there's plenty of pressure there, but the consumers are still moving. What you see in Europe is maybe inbound traffic, not as much, inbound traffic from the Middle East, inbound traffic from Asia. We've seen some fall off there, but the underlying consumers within Europe are continuing to travel. And Latin America had a nice rebound, plus 4.5% growth in Q1 versus slightly down in Q4. Nice rebound in Mexico with business driven by larger wholesale customers that started to buy back in. And a meaningful shift there and a new leader in Latin America or in Mexico that's doing a great job as he starts sending the business. The next slide talks about, and I covered this on the last call, and I have a few slides to talk about what we're focused on as far as strategic pillars. These are the priorities as we think about how we push the business. Even in this environment, we continue to push the business against these pillars. They're the right things to be doing. The first one is around amplifying, elevating the awareness of our iconic and consumer-centric grants. This is enhanced storytelling. and leading in with advertising and spend to continue to drive all of our brands, and particularly our three core brands. Our second pillar is around being the clear winner in digital. I think the word the clear is important, not a leader, the leader in digital, across all of the portfolios that make up digital, all the channels that make up digital. I'll cover that in a second, too. We're very focused here in driving further support of not just our digital business, but the whole multi-channel effect that happens on the businesses. In Pillar 3, I think there's tremendous opportunities in this business in the lifestyle bag space. There's what we call white space opportunities. It's a huge market. I'll give you a view to how we view the market and what our market position is and why we think we can continue to deliver. As I just said, we are delivering here. This was close to 5% growth in the quarter and it's continued to outpace the growth in our business as we execute against this strategy. And the last one, and I think how I described it the last time on the call, is you would expect this from us. But importantly, to continue to win with products that resonate globally. Parallax is on the page here in the picture. We talked about that last time. I'll show you a little bit more update on Parallax. It's a good example of when we get behind global collections on a global basis and focus, we can move the needle. And we'll give you some examples of that and what we're doing as we roll into this year. Importantly, I'm on slide nine. Importantly, as we really advance our first two growth pillars, we created a GMEO, a Global Marketing and Ecom Office. That's off to a good start. I would say a running start and working really well across the organization. What is it focused on? It's around strengthening consistent global brand execution with local flexibility and driving high-impact storytelling to elevate brand awareness and perception. And as we lean into the advertising spin against this important aspect of what we're doing on the marketing side of the business, we're seeing early signs and really laying foundation for really tremendous forward growth. We're centralizing the digital marketing coordination to reduce duplication. That'll create efficiencies in business. But it'll also enable regions to respond faster and more effectively to local consumer needs against the backdrop of a well-supported global marketing and e-comm office. And lastly, as we lean and invest, we're embedding ROI-based decision-making performance, transparency, and stronger oversight, so increased marketing investments deployed with greater measurable impacts. The likes of MMM tools and the tools that we use around the business to properly evaluate and lean in in telling our stories. Mediterranean Escape on slide 10. This is a good example of, on the CUNY lens, around how do we tell this story. This was introduced in March of this year. It introduces meaningful newness that customers can feel for Grand Tumi, a color palette that's exciting. If you haven't seen it, take a look, but I'm guessing you've seen it if you're following this at all. Across luggage, women's bags, non-traveler lifestyle bags, really doing amazing work. It brings this sense of travel and joy, and this is around the storytelling. This is why it's under Pillar 1. There's a product piece to this, too, which I would say is part of Pillar 4, but it's around the storytelling that we're able to do in an elevated way, and I think the team's done a great job, and it continues, and it will start launching across the globe as we enter Q2. On page 10, this is an exciting campaign that we've just launched in North America. This is around elevating Grand Samsonite in North America with new media campaigns with Olivia Coppola. And it's Chocolate Mob is what it's called. If you really look online, you can't miss it. And this is part of our overall campaigns within the U.S. It's not just a bag. It's a Samsonite campaign. This is off to a great start. This is a colorway that we've matched across our three best-selling collections, Outline Pro, Elevation Plus, and Better Than Basics, which is effectively lifestyle bags that tie into these collections. It launched in April. Tremendous success for Loraleo across all methods of distribution, and it's a fan favorite of my house. My family loves the collection. Usually the temperature of something's off to a good run. So very excited about that. Lynn and team, great job. The second one is on D2C. Okay, and I covered this at the start, but D2C is our fastest-growing channel. D2C, directly operated D2C, up 11.3%. Our direct-to-consumer overall mix moved from 38% to 40%. Our overall D2C sales were up 4.2%. D2C e-commerce, 11.3%, but our retail increased by 1.4%. On the back of 11 well-placed company-operated retail stores over the last 12 months, and a slightly lower... same store sales growth, down 1.5%, but modest improvement. We're seeing improvement as we step out of Q4 into Q1 on the comp side as well. Overall, very happy with the direction that we're going on, not just our digital piece, but the overall direct consumer piece of the business. On slide 13, when I talk about digital, and we tend to point out in the last slide with focus on our direct consumer e-commerce, but when we talk about being the leader, it's around all of these platforms. Being the leader on not just our own sites, but mobile platforms that allow access from the go. Wholesale customers that have global reach and presence, that we're deeply involved in making sure that the way we show up matches the way we show up on our own sites. and we're properly supporting them, and importantly, across the globe, partnerships with leading retailers. And the scale of our business is we touch the entire globe from this footprint. Anywhere in the world where somebody is digesting digital, we can execute relevant to each one of those markets, but with some central coordination with the GMEO that I think is going to deliver amazing work. And so the teams are very focused there on the great results. On slide 14. significant white space opportunities in lifestyle bags. It's an industry that's sitting in 2025, around 67 billion, growing at a CAGR growth that's similar to luggage, 3.5% CAGR growth. Over the next five years, it'll be almost an $80 billion market. And we have a 3% share here. There's tremendous opportunity to move share here. And let me tell you what we're doing on that front on the next page. We're building a really market-leading strategy. We're focused on casual and duffels. That's kind of natural for us. We're expanding into women's lifestyle bags. You can see Voyager here in the middle. And American Tourister and all of our brands expanding beyond travel, traditional travel bags. You know, when you think about travel, you think about luggage, but the world and the consumers are moving. This is an under-seater picture here with American Tourister. It's a huge driver in Europe, and it has reached across the globe. And when you think about it and think about some of our most successful collections, the picture on the left is EcoDiver. That's a top-five collection for Europe, and we continue to invest in that. Next generation of that bag is coming out in the fall. Voyager, and you can see here the Mediterranean escape collections in the middle. And Voyager is a meaningful piece of business for us. You'll see a full relaunch of that as we go into next year. And as I said, Take to Cabin is what this is called for American Tourister. We're partnering with advisors. We have deep know-how in-house, but we're bringing advisors in to help us properly assess the market, assess what the opportunity is, assess what the playing field is, where is it distributed, where is it different than what we do today. Things we've been doing, but I know we can do better. So we're really leaning with advisors to make sure that we're executing against this. And we continue to evaluate acquisitions that will bolster our portfolio here. I think there are opportunities here. You've heard me say it on other calls. And as we lay more foundation here, I think we can continue to deliver outsized growth in this space. If you look at slide 16, you can see the growth. So we've gone from 36% lifestyle bags to 38%. As I covered, it's close to 5% growth across all of our brands. And we continue to be excited and push the needle here in the non-travel space or lifestyle bag space. You'll notice we've made a shift. For a long time, we called it non-travel. We've shifted to lifestyle bags, but I think it's a proper representation of what we're actually going after when we reassess the opportunity in this space. And then lastly, on the pillars, continue to win with products that have global resonance. We get scale benefits to the brand and to the products that we sell when we get products that touch the world, touch a couple of big regions, get behind it, support it properly with advertising. We lead the future in innovation and sustainability, building on our 150-year legacy. We're focused, as you know, on lighter, more flexible, durable, and sustainable materials. We centralized product and marketing coordination to enable global consistency. It's a little bit of a shift. We're really empowered decentralized organization, but we're putting our minds together to execute against this in a different way. And we're broadening the assortment in the adjacent categories, lifestyle bags. And here's just a few examples of products that fit that bill. On slide 18, this is Nexus. If you're in Europe, you've seen it. If you're in Asia, you're about to see it. In the U.S. as well. This is a collection that launched towards the end of Q1. It very quickly became a top seller collection in Europe. This is an amazing product built in our facilities in Belgium and Hungary. It's next generation hard side. Designed as the ultimate future-proof travel product. It's really an amazing product. It brings material leadership to life. showcase strength, lightness, and resilience that is bold and modern narrative. I think when you see the campaign and you get in front of the product, you'll feel exactly what I'm talking about. And just lastly beforehand to Tom, just another collection that's been tremendously successful. We talked about it at the end of last year. Parallax has been a home run. We continue to push it. We're back in stock across the globe. We sold through this very quickly at the end of last year when we launched it. We're launching new colors. Blue fog is really an amazing color. The coordination of color between travel and lifestyle bags, you can really start to feel it. So that's launching. And coffee and copper, another fan favorite at the Jendro House, launching in the fall. really an on-point color palette. And when you get in front of this project, the pictures on the screen doesn't do it justice. It's really an exciting product with technical features and packing features and sustainability features in this collection that's made it one of my favorite products to travel with. With that, I'll come back right after Tom for an outlook, and I'll turn it to Tom.