Samsonite International SA 01910

The Pandemic Has Made Samsonite a More Efficient Company

Samsonite's revenue and earnings growth over the past few years was severely impacted by the trade war tariffs and the coronavirus outbreak. While both of these factors are outside of Samsonite's controls, we think the company has taken the right measures to position its business for a post-pandemic rebound. On the tariff front, Samsonite has already shifted the majority of its U.S. sourcing out of China into Southeast Asia. Over the next few years, we expect U.S. sourcing costs should come back down, resulting in persistent gross profit margin improvement. While the COVID-19 pandemic has wreaked havoc on the travel industry, Samsonite made good use of the time-off to have a deep look at its cost structure and identified USD 200 million in annualized permanent cost-savings (representing roughly 10% of its prepandemic SG&A). We think a more efficient cost structure should result in persistent improvement in profitability for the business.