First quarter 2024 consolidated net sales increased by 4.1%1 year-on-year driven by growth in Asia Continued expansion in gross profit margin and Adjusted EBITDA margin2 during the three months ended March 31, 2024 Continued balance sheet deleveraging, driven by strong profit growth and Free Cash Flow3 with net leverage ratio4 at lowest level since 2016 acquisition of Tumi HONG KONG, May 14, 2024 /PRNewswire/ -- Samsonite International S.A. ("Samsonite" or "the Company", together with its consolidated subsidiaries, "the Group"; SEHK stock code: 1910), a leader in the global lifestyle bag industry and the world's best-known and largest travel luggage company, today published its unaudited consolidated financial results for the three-month period ended March 31, 2024. OverviewCommenting on the results, Mr. Kyle Gendreau, Chief Executive Officer, said, "We are very pleased with Samsonite's performance in the first quarter of 2024. Last year was an exceptionally strong year during which our net sales were fueled by the resurgence of travel following the pandemic, leading to unprecedented demand for our products. Even against a very strong first quarter in 2023, we delivered solid year-on-year net sales gains as our strategic investments in marketing enabled us to continue to capitalize on the ongoing recovery and growth in leisure and business travel, particularly in Asia. Our profitability continued to improve, with gross profit margin and Adjusted EBITDA margin2 both reaching new first quarter records. Notably, for the three months ended March 31, 2024, our Adjusted EBITDA5 and Adjusted Net Income6 increased by 8.5%1 and 13.1%1, respectively, on net sales growth of 4.1%1, year-on-year. This strong performance reflects the increased net sales contribution from our higher-margin Asia region and direct-to-consumer channel, and clearly demonstrates Samsonite's fundamentally enhanced margin profile." During the three months ended March 31, 2024, the Group recorded net sales of US$859.6 million, an increase of 4.1%1 compared to a very strong first quarter in 2023 (the Group recorded year-on-year net sales increases of 57.4%1, 7 during the first quarter of 2023, and 30.4%1, 7 for 2023 overall). The net sales growth during the first quarter of 2024 was driven primarily by Asia, where net sales increased by 7.5%1, powered by double-digit1 constant currency net sales gains in China, Japan and South Korea, year-on-year. First quarter 2024 constant currency net sales in North America and Europe were about even with the same period last year. The year-on-year net sales comparison for the first quarter of 2024 in North America was affected by strong first quarter 2023 net sales growth compared to the first quarter of 2022, driven by certain wholesale customers beginning to buy again as demand rapidly increased ahead of the expected robust summer travel season and by strong sales of the Tumi brand supported by improved inventories to meet customer demand. The year-on-year net sales comparison for the first quarter of 2024 in Europe was affected by a high net sales base in the first quarter of 2023, primarily due to the resurgence of travel driving strong demand for our products, as well as accelerated sales in advance of the implementation of new European warehouse management software in April 2023. The Group's gross profit margin expanded to 60.4% in the first quarter of 2024, driven by year-on-year gross profit margin improvements in all regions, and by both the Asia region and the direct-to-consumer ("DTC") channel contributing an increased share of net sales, as well as ongoing discipline with promotional discounts. As a result, Samsonite's Adjusted EBITDA margin2 expanded to 18.8% for the three months ended March 31, 2024, a new first quarter record, even as the Group increased its investment in marketing as planned to 6.1% of net sales, a 20-basis point increase from the first quarter of 2023. The Group's Adjusted EBITDA5 increased by 8.5%1 to US$161.2 million and Adjusted Net Income6 increased by 13.1%1 to US$87.1 million for the three months ended March 31, 2024, compared to the same period in 2023. Mr. Gendreau continued, "With robust profit and prudent cash and working capital management, Samsonite's Free Cash Flow3 improved by US$67.9 million year-on-year to US$6.5 million during the three months ended March 31, 2024. We ended the quarter with a net leverage ratio4 of 1.48x, the lowest level since our acquisition of Tumi in 2016, as well as substantial liquidity of US$1.6 billion8." "As we announced in March 2024, the Company's board of directors has authorized management to pursue a secondary listing of Samsonite's shares. Advisors have been hired to begin preparatory work, and the process is at an early stage. We will provide further updates as and when appropriate." "In April 2024, we refinanced our term loan B facility, taking advantage of favorable debt market conditions to further enhance our financial flexibility. We used US$100.0 million in borrowings under the lower interest rate revolving credit facility to pay down US$95.5 million of the more expensive term loan B facility, and we refinanced the term loan B facility to reduce the interest rate payable on our term loan B borrowings by 75 basis points. We expect the refinancing will reduce our annual cash interest payments in the first full year following the refinancing by approximately US$4.9 million." "Looking ahead, growth in global travel and tourism is expected to remain healthy throughout 2024, sustaining demand for our products. In certain markets, we have observed customer traffic and net sales returning closer to historical trends compared to the extraordinary levels witnessed last year. That said, backed by our portfolio of leading brands, unrivaled global sourcing and a strong distribution infrastructure, we are well positioned to continue investing in product innovation and marketing and to outpace the market, and we remain focused on delivering profitable net sales growth." "During the first quarter of 2024 we saw notable net sales gains and promising consumer trends in Asia. In China, demand increased during the Chinese New Year holiday, which helped drive impressive double-digit1 year-on-year net sales growth. This growth helped solidify our view that there are substantial opportunities for expansion in China, supported by continued enthusiasm for travel among Chinese consumers. Similarly to China, travel in Japan and South Korea reopened later than other markets, and we saw double-digit1 year-on-year net sales increases in these markets during the first quarter of 2024. As travel continues to recover and grow in these Asian markets, particularly with the ongoing recovery in outbound travel from China, we remain positive about the region's outlook for 2024." "Our year-on-year net sales comparisons in North America and Europe for the first quarter of 2024 reflect the impact of exceptionally strong net sales growth during 2023 which was driven by the resurgence of travel and customer traffic post-pandemic, and we are seeing the effects of both returning closer to historical trends. That said, with consumers expected to continue prioritizing travel, the upcoming 2024 summer travel season is again expected to be strong." "We remain disciplined with promotional discounts to sustain our improved gross profit margin, and continue to invest in the business to drive net sales growth. Our investments are focused on product innovation and sustainability initiatives, further expansion and upgrades of our retail store fleet, as well as in marketing to support new product launches. In addition, we continue to diligently manage our fixed selling, general and administrative ("SG&A") expenses to drive positive operating leverage. During the first quarter of 2024, our fixed SG&A expenses increased by US$13.3 million compared to the same period in the previous year due to the first quarter of 2023 having many company-operated retail stores still operating with reduced staff and temporary rental concessions, both of which have normalized by the end of 2023, and the total number of company-operated retail stores increasing by 77 year-on-year. However, fixed SG&A expenses in the first quarter of 2024 remained relatively flat compared to the fourth quarter of 2023, despite the net addition of 14 company-operated retail stores during the first quarter of 2024, reflecting the Group's ongoing discipline on expense management. As a result, our fixed SG&A expenses, as a percentage of net sales, were 24.9% during the first quarter of 2024 compared to 23.5% in the same period last year, but 480 basis points below the first quarter of 2019. We remain focused on managing our fixed SG&A expenses to drive operating leverage." Mr. Gendreau concluded, "In mid-April, we published our 2023 Environmental, Social and Governance Report, which shares some of the key insights, milestones, and progress we made in 2023 on our journey toward a more sustainable and responsible future. Notably, we refined our governance committee structure, further strengthened partnerships among our teams across regions and brands globally, upgraded our systems, and conducted a new double materiality assessment to better understand our impacts and risks. We believe that sustainability is not just a responsibility, but an opportunity to make a meaningful difference through our entire value chain for people and the planet. We are committed to advancing Samsonite's 'Our Responsible Journey' sustainability initiatives and leveraging our scale to lead the transformation of the luggage industry to become more sustainable." Table 1: Key Financial Highlights for the Three Months Ended March 31, 2024  Expressed in US$ millions, except per share data Three months ended March 31, 2024 Three monthsended March 31, 2023 Percentage increase (decrease) 2024 vs. 2023 Percentage increase (decrease) 2024 vs. 2023 excl. foreign currency effects1 Net sales 859.6 852.1 0.9 % 4.1 % Gross profit 519.5 494.5 5.0 % 9.1 % Gross profit margin 60.4 % 58.0 % Operating profit 149.8 144.7 3.5 % 9.3 % Profit attributable to the equity holders 82.9 73.8 12.3 % 18.8 % Adjusted Net Income6 87.1 81.2 7.2 % 13.1 % Adjusted EBITDA5 161.2 156.4 3.1 % 8.5 % Adjusted EBITDA margin2 18.8 % 18.4 % Basic earnings per share –Expressed in US$ per share 0.057 0.051 11.6 % 18.0 % Diluted earnings per share –Expressed in US$ per share 0.056 0.051 11.0 % 17.4 % Adjusted basic earnings per share9 – Expressed in US$ per share 0.060 0.056 6.6 % 12.4 % Adjusted diluted earnings per share9 – Expressed in US$ per share 0.059 0.056 6.0 % 11.8 % Results for the Three Months Ended March 31, 2024The Group's performance for the three months ended March 31, 2024, is discussed in greater detail below. Net SalesFor the three months ended March 31, 2024, the Group recorded net sales of US$859.6 million, an increase of 4.1%1 compared to a very strong first quarter in 2023 (the Group recorded net sales of US$852.1 million in the first quarter of 2023, an increase of 55.3%1 (and an increase of 57.4%1, 7 when excluding net sales in Russia7) compared to the same period in 2022). The Group's net sales increase in the first quarter of 2024 was driven by the continued recovery and growth in leisure and business travel globally, particularly in Asian markets, including China, Japan, and South Korea, where COVID-related travel restrictions were lifted later. Net Sales Performance by Region  Table 2: Net Sales by Region  Region10 Three months ended March 31, 2024 US$ millions Three months endedMarch 31, 2023 US$ millions Percentage increase (decrease) 2024 vs. 2023 Percentage increase (decrease) 2024 vs. 2023 excl. foreign currency effects1 Asia 340.1 329.1 3.3 % 7.5 % North America 285.3 284.3 0.3 % 0.3 % Europe 175.5 179.9 (2.5) % (0.5) % Latin America