SMSOF - Earnings call transcript Q2 2021 | Samsonite International S.A.

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Operator

Good morning, good afternoon, and good evening, ladies and gentlemen. Welcome to the Samsonite International 2021 Interim Results Conference Call. Please note that this event is being recorded. I would now like to hand the conference over to Mr. William Yue, Senior Director of Investor Relations. you. Thank sir. ahead, go Please

William Yue

you very everyone. Half evening, morning, and Results much, you for Operator, Thank First Call. good joining Earnings good Thank the XXXX Samsonite

Gendreau; have We remarks. today us. Thank few Gendreau And well, much. Mr. our begin as ado, with well further you have CEO, Reza have very Taleghani as we opening Mr. we -- without the CFO, our with Kyle Mr. presentation

Kyle Gendreau

William. Thanks, Great.

what And we’re So half, page with we’re down I of quite the down lead in will compared quarter in we reached move better first with, and in shy has starting improved XX% into and the QX versus in down. that just seeing -- business recovery Sales XX% just very than down QX to or second on four, in June, XX% QX. as July in the recovery the and encouraged strongly trend of in into we in XXXX QX. continued up the start that’s particularly, to XX%

other month a very the us EBITDA. EBITDA pivoted $XX in for profit of starting that of strong delivered that million $XX is EBITDA with a July. an of million down $XX.X positive again, but for positive for July trend strongly really $X.X And with continued in The to May June XX.X%, and sales million we’ve then story of our a quarter really that’s million north very

strong the growth focused to improvement to get this margin business we’ve So dramatic a position this all in the doing recovery. profit on. that is been position this of Fueling really been a gross a very work is testament -- we’ve for

normal $XX was relief And and to as moment place recovery. seeing positive for continues relief, cash that liquidity, continued I so a July, we strong June, back heading that is paid XX%, will tell in which QX overall will our rest with the normalized our gross in our the savings testament raw gross far particularly tell for the meaningful recovery, positive bit million of will a we after the to moved repayment you for And and on know, we’re a QX cover just business really million cash had feels a to inflation back we’ve for and across run you’ve gross margin the left see margin in B decreased us -- year. along And plenty not EBITDA XX.X%. $XX chart taking We business that get costs And really to code have debt, of quarter. business $XX.X us. are up of have million margin. and of -- us had we that our zip we’re a look liquidity supportive in what into messaged from bit XX.X% you which longer the in can how QX, in management type And in burn sales you to business month change the as message, for As August on the items $XX towards interest same positive two lenders, our our second as business the gets a really I to dramatically go-forward for the with -- XX.X% that down lender anticipating through rates July our and and EBITDA, year material gross page even the low we’re profile basis. of worked last costs initiatives covenant And continues. its on in $XXX down we’re it’s million quarter. have have next to with achieved this down the we’re for of our April reached QX for refinance Term on of produced reflective five than is cash really those seeing June QX, Sales XX% is and the you seeing of in what territory pandemic and navigate here our globe. as controls and the seen the a moved all-in that’s before, still month XX% in very quarter general QX year. flow margin flows. in And QX for sales said, group help we’ve and in significant recovery XX.X%, cash really I annualized We’ve we will that’s versus the quarter we the were expense challenges is billion, covenant as recovery, I and debt, in breakeven which and further the release shipping down we’ve the and this the I we we We with of right in that of Loan million we the last last We’ve that and across the withstanding pressures down now for seeing had. $X.X press produce be so quarter the during wonderful July. margin am

so XX.X%, of July, U.S. down the so catch really this business really recovery. Europe, the moment this seeing here North -- and July, So And strong, really America XX% up to we’re the trend by down month continued America, very Europe’s fueled in in was in at Europe down American month XX.X%. down that’s was into was in to And of starting Europe strongly move XX.X%. trend the And North North what started recovery being June, continues. where in

that this just snapshot much six, page good go two a on sales, the So If here the trend trend are improvement. on gives regions importantly, we’re recovery EBITDA we these right of really to of but now. the driving seeing

over as of in stepped a ago, million. the had pandemic QX, we we again, EBITDA in $XXX so, And loss an year

You as progress initiatives. to EBITDA June EBITDA The happening slightly along the can see of get mostly seeing month tied of million was July, to July, different QX, positive, $XX positive, covered but we world business starting at the in that. the over already, and of and or month And get teens the curve slides tied $XX.X some recovery May I and EBITDA EBITDA to around sales the a to right the strongly rates, few but we’re for again, we’ve the made April of I’ve July recovery, negative, but what positive just margin month shy XX%. travel have down on margin million XX%

the about the flight, daily nine, page of the and another U.S. this the back domestic seeing is May, this blue and is recovery a on downs to And is of And India number line has travel the little the had then into we as would and travel India, India to you weeks steadily is, nine, it this line in and page has of ages quickly see So it lines domestic XXXX we XXXX. performing had in here the and is really so second the the a it, Japan the on is is up I I is a just rapid driven story. was planes am of past really the really is orange page, to U.S. in on view But can see Year, flights can in busy. is on cover travel down will line I’ve this but red of XXXX, the U.S. is ups this XX%, year. over travel. And U.S. lot meaningful New in market flying, a blue just China, you you which just happens seven is U.S. in again. in dips, to we small in fairly is And Chinese that then numbers and had this see the can April, the on page. the the we right I same is can U.S. domestic of like domestic in and and bit. Chinese down in XXXX see page goes And move amount what around -- -- is and been slowing increases you can flight been you still see lot China of of and of and actually a get And slip China describe travel, was particularly level very There dive we close domestic to QX the we’re deeper and February, far then driving the the talked XX% the in have go trend and start stepped some And same QX the U.S. way back the as and a traveling Russia every month starting as levels line almost few improvement speak March, June, as for then Brazil down which weeks, in July, really that the improved. see some has -- markets domestic really had a much XX% there’s next last as direction quarter. couple strong time, that And in go Government back can that have improvement kind the continues on China dip it the QX, Russia today China better. a today. improving, in from as that, And and

page And business, driven so, this EBITDA the with in QX. positive really by the that we we’ve really we’re seeing. been achieved on the It’s recovery XX, coupled that taking in actions so

sales now positive in EBITDA QX XX%. So on

I XXXX last if XX%. EBITDA said, really it’s recovery said, clearing strain get margin as our the the -- month so we’re move in half generating under as move as continued, EBITDA forward. and of I as of year, said loss for also really push and approaching of to positive July, was And we now is the QX know, down story, margins the and as million of and XX% earlier, cash. important just was as ours, back we’re reducing been business year-to-date to kind our first And EBITDA approaching again, was was July margin And and a were we June XX% down July and you I some half The an XX%. inventories as of we this into year. alone, Our $XX I low-teens

at June XX%, raw as we’re margins are are managing in you looks increasing this about seeing price having XX% with Here and And costs approaching material QX managing rising. year we’re renewed where we’re GSP to success up increases, versus our a against to costs back need U.S. we at. be and July -- and same. very know, despite we to inflationary in pressures being those, the as and this manage freight its is move both suppliers so business and we to meaningfully traditional in strong yet very the we seeing, margin the with the which managing QX are And good not this XX% company, the margin levels,

actions of doing the stepped the in you we’re say, we month quarter, annual or run closing cost savings fully still getting on taking and year those we generated manage to continue some We the million cost side. the in in are into over benefit We QX, as I as But in QX would we’re realizing we’re we this work the had of benefits. all QX quarter, and $XXX get into second rate those of of know, structure, the initiatives the some full cost stores.

advertising We’re that manage can and to we closely are in But very lean numbers. allowing advertising that are again. to starting into continuing see you move markets our to

the to of lean as all particularly seeing starting moving to starts pick moving Europe for us in business, dollars spend brands in in North you’re And in advertising Samsonite, up starting more really Europe, we’re well. portfolio. brand brand to Tumi our gets there both the our spend advertising recovery, our as and up America So in

June some again, One, raw we’re increased can and you year, XX.X%, I margins here. QX as working page on last XX.X% pressures, we at we’re done. was costs, container moment. the that margin, on story, at I the QX into actions XX%, gross us pandemic of And costs, we the really here. last to of material because against page a as was important year On really really very see a of meaningful year and lot work QX stepped I against this the we’ve I And XX. labor seeing that. speaks are inflation, we actually, where today thought we’ve it am there’s on general needle that manage moved is said, substantially at have we freight -- this the and is taking limited costs The need to availability margin

seeing We’re right now. in goods we getting challenges where need them actually

And been And really we so impact the first half we’re in that so seeing ahead that. GSP, managing shipping and of of delays, it’s place ahead of $X and our really strong the we’re you’re million we’re a this around we’re and numbers as staying congestions, really seeing that gross to closely order continues but margin. of very that sourcing ahead had the delayed curve, fully be so are business pushing anticipate our and the of non-renewal teams will port teams get managing The renewed, the that we’re an against in recover. to which impacts

that our that with our the forward of weakening really benefits moving strong And until dollars we’re as gets buying are that the cost impacts manage many in see U.S. of Asia on increase. dollar. a to with cases, we U.S. we seeing weakened The on in well. relationship leveraging dollar, suppliers in longstanding manage the collectively to working impacts the we’re U.S. vendors So will renewed, as

avenue maintain what be say for sure us. make looking is, half the we’re gross effort year, margin, an into back it I will significantly really is to we’re very what for ongoing historical regions. cost a that and that all of we’re this manage will When So And business next this is continue top over every be fixed on I into in $XXX not here -- page we positivity this QX levels. structure look is focus continues, and savings, at would of large our here with on for the being in very, actions reduced are that This And margins very the adjusted all closely. to and at decisive us, XX, momentum strong achieved. is building in business million really EBITDA we our fueling it,

be looks our CapEx and positive. flow that advertising capital and be I We where and cash it will I Maybe items flow like temporary cash as continue said flow earlier, cash to manage these but and to of yet, maintain savings all said July our working to like back haven’t minimize July from burn. cash we’re And efforts. today against sitting positive looks

think pandemic. reset of side. we as capacity -- to in with products in I SKU collaborations We’re the We on very robust business talked debt. billion group. business. with We’ve initiative with really very sitting our success all of are we on we’re of and drive development, and I also the those liquidity brands managing to product rest in or we’re liquidity, recycled said of launches about the kind enhance Term playing call, development. gives continued materials margin on to with really the with ample our structure with which through us story of invest the And product and a -- manage simplifying bank exciting in investing the products repaid to And $X.X a top the management our of into performance last Loan inventory very, SKUs we other supportive And our We And refinanced capital B. covenants. earlier,

perspective the picture sold a And of industry our read report all and ESG and sustainability Speck. haven’t May well we ESG behind responsible what our you fully because for move of We’re I recommend, we’re journey. perspective to needle and teams front July our that if from this lastly, published just doing to wonderful sustainability are in on the and strongly business, an trenched gives in We that. with it transforming it, leading committed a

the years business a on American was core and focus So really Speck. took that, it, we profit side decision and sell North on allow top business that, to a a our Speck the to it the of a we ago And acquired diluted few and on got North enhances overall as profile slightly America I’ve of and the business business profit slide of was Speck top and of on our business. on its

So we in a business decision took to sell that July.

a in our the big really this Singapore, I hub and background, regional the established history call as follows sourcing XX-year headquarters Singapore Another it, on development will in -- plumbing new is in and Singapore. really our on and builds piece, Asian brand Asia we at Singapore business and and forward the that us. our a location really we where the was growth, areas the globe, business taking of across basis It our we’re followed global and determined best study looked for where a we’ve

a We as American and American administrative also for Latin will and hub business. provide North this and it East, and benefits sourcing Middle the for will leverage sourcing Asia the

business. in rights the European go-forward global really world to our as IP we’ve from that in the Reza leadership Singapore the of and in tax cover to Our structure well as a to the basis to on go-forward Asian also evolution business our is business rest create really Belgium business drivers economic is to shifted -- as midst in this continues aligns help a Samsonite Asia -- growth moved sitting to team drive Asia, midst Luxembourg moving of reset economic hub Luxembourg, and with sustained from is as and drive to Singapore and establish sustainable really on perspective to the Luxembourg we’ve later, of a bit IP, and an really the basis. which sit get a shifted In the the a of structure in rights well that, and our will the our

divested America All to on business we in was sustainability it ago. end we it of said, reaching non-core for And focus a already core was that our we pandemic, $XX our North us team We at July. brand completed as million XX, June. four we committed remain that to driving about the and a U.S. I And did, and really despite page This years the of allows sold Speck at milestones. on the business. acquired

getting will and was that reducing the a highlights you products, labeled our our responsible supply supply journey and we carbon actions business. the and in we assets It’s that about we’ve talk of better chain start on I teams, focus journey second, best with suppliers, know, As and our carbon really and innovative to people four engage want how engagement a thriving pandemic chain as key one our do is which our started. footprint, in our focuses and our people

great in So XXXX our be to the far almost of of moving attributes. business, work incorporating have from or to we the that in And are continue compares half half captures sustainable of we lot report to on and the how meaningful, focused sales really if full of kind or be our to XX, XX% XXXX, will the were page that as continue here first here the products to needle come year Again, first -- of products the products significantly sustainable a we that XXXX. story build that ESG first glimpse, X% using attributes, sustainable are in products materials. our sold on we we go to develop there. a And more this continue you here around XXXX

can coming, come XX%, Tumi you of X% XX%, every more business core and XX%, American fifth an at as already that and very will well progress with Samsonite the a in the and take and sales year having industry. ability amazing approaching see really be to is see right, drive sure this the hard see brands, and at on more into page of our front So year on brands products position its that kind our Tourister and I So can are sales my rise. teams Gregory of forward focused. this you position the leadership recovery we the of to will for pipeline and And and of percent this to our next innovation XX, really, launching to as and of continue continue our impact, end will

the either are I have past product material shell producing last and which hopefully talking And see post-consumer that in lining, by product during we’re recyclable, water our set think, the inner post-consumer are a a of outer linings call. products This XXX% this fully and is which is launched material the can was Eco, the made I RPET six polypropylene. all that waste you’ve amazing about out recycled Hungary over as Magnum that’s inner months, the made Roxkin, really facility shell, We bottles so then or particularly out seen now, the you with waste, outer of well. is using post-consumer,

about changes think way in up opens into you XX, point IBON. two ratcheting space side less product is takes and This the makes wonderful it product single interesting deeper this case, is a really you it innovation. what has the it interesting system. case, open the more this each can frame product stories product space, So with it’s page is a middle. a quite when of where way On pack of quite really the a of with packing, opening And interesting an in really

product from now, about then, been and exciting secure fascinating a So it RPET product the out chance what’s you a is within you and as get to with out had but of well. collaboration product with for recycled Inner perspective. really a this travel if can material we quarter made really launch a very see lining in a And there really case has McLaren. a successful

that well within Last more anticipated. across year, we against have products, a collaboration COVID carbon and that we and how fiber our the knows incorporates have spirit regions the is But received course. of And those we took fourth the But Tumi better in than lots year. launches and this XXXth coming of around we’re And interesting sold. and have colors been had kind business it. exciting we’re then, silhouettes racing this it’s we so excited been has all for a and been clearly We capture here navigate off it’s for that’s lastly, plans. while XXXth celebrating to quarter

and commitment a We’re in at really a sustainable Reza to back this it excited have will open will the we highlights to future business. then with as we see and to travel that, end. And some I over for financial I come starting turn

Reza Taleghani

slide Thanks so we’re Kyle. much, And XX. on

to overall, the So, really first But as half XXXX. in half in results, of of to may XXXX said. basically second in the little that full our quarter, be bit pleased of regions, obviously, actually so very sales you to be Kyle we see out this some the were to quarter similar starting recall, a we’re interestingly kicked and in seem seeing the first sales we’re heading and pandemic reverse the as now swing

that of those recall of the million. split sales half, and for and you million $XXX did $XXX QX, sales may reporting the So we QX $XXX million

trajectory The $XX which story QX $XX is So we QX EBITDA, the had negative -- is million, EBITDA positive $XX negative that improving. million million. of really around

total So into of that July, million adjusted continuing Kyle noted. is and as negative for a EBITDA trend $XX

$XXX.X we if you last back the in go at of year, were million. EBITDA, quarterly we if of So were negative looking the evolution QX time,

income into the will We on we profitability around. shortly. turned sales EBITDA do Net million $XXX we of it’s when down. it’s still we well, feel adjusted that really we would net that half. environment territory income, of loss and with good EBITDA with is an full further as quickly And materially in expect sit really, positive the a business again, flow this through get expect $XX about So million, once how here so

it page the little margin slide around touched comments bit, gross point on it margin This which I the as you at details the between gives XX, and sales improvement I as do well quarters, bit really split the two gross a quarters. a as EBITDA, a is the split will on in really the between Looking little is I earlier think well. bears and that mentioning, have the a

that seeing One trying is the and we’re good manage in inventory have are been and terms of market in gross levels all very the things up now teams so low demand of margin picking channel right the is very profile. of the the to in

So as of improve gross well well. trying cost that margin that’s happening, see limiting the as the pressures discounting as in terms we manage to and

at coming the XX.X%, is gross margin in maintaining July pickup Kyle improved June page So we and XX.X% And we that a very that that mentioned, had in in and that terms the and good forward from I just On financial greater well. detail. has into QX. which are that’s bit XX, hopefully sales, -- been has as in recovery Obviously, that a going obviously, the little of highlights to going. recap of then get will it covered how we’ve in further

we of EBITDA by cost million a the Adjusted aggressively. and breakdown to of subsequent and of the had are regional negative sales into on million, $XXX $XX even power very year will flat We favorable slide. that early get prior that taken that’s really the though cuts

in leverage EBITDA as really the of we’ve actions forward terms of down that to operating we very for pandemic going through QX SG&A is is actually flow began, even seeing Fixed And that the of the taken. improvement material. that the all the sales -- that I are every EBITDA flow think to in that adjusted net pleased of we though continue have through in aggressive since quarter are expect first adjust expenses, positive well XX.X%. can We’re something we total all sales down

annualized cost savings. rate obviously, run million $XXX we fixed talked about So, in had

again, still a seeing flowing these $XX results. in million there savings are temporary currency some And through. on basis You’re reduction constant are a still that

something count all So planning leaning expected is on year, for of those can we back budgeted $XXX Advertising than advertising million permanent the that position going little I And our on we sales of pass $X.X that a levels a SG&A to long out. prior we are little going into first as of we return well base to spend advertising run page an the billion. million that improve savings debt adequate But forward. had forward fixed lot in $XX on as think net were lower the is of begins. On over we and get the XX, as we expect recovery as quarter, the spend.

cash us we subsequent and the evaluate on sure better that sales adequately revolver Term $XXX broken $XXX the well. did year -- approximately is cash in feel piece of $XXX cash burn going levels. plenty a will are continue million some to paid QX. $XXX $XXX pretty Strong about we make the cash of $XXX our beginning million cushion. We around getting in, debt. are we’re remainder good make -- that next B-X, Kyle And $X.X Term feel we equivalents year down into debt cash about of million inventories expensive the million As which we was of cover the of year. to of the down position end really and due liquidity our of coming with of and Loan of we Really to just to see also Loan going the slide A, down the has again, million about of as most that in the can over million paid cash billion, $X which as and repayments mentioned, billion recovery have as burn, And and of we we

also was and by the the LIBOR XXX Term XX the pricing Loan XXX floor plus reduced from LIBOR plus to down as was well. refinance basis points We down brought debt, B-X

the instrument. growth of Again, we emerge X.XX% better improvement about of pandemic. on company profile from it’s as the margin credit that the So of the reflecting

we cetera. make run run adequate you rate. the pressure, are million is our sales debt $XXX keep feat. by of have we as remember entire inventory Kyle what we that’s store really was burning low very to XXth capital have an trickle July. we through environment of the around couple approximately over last been in being June the little aggressively net to compared of remodels, north we things Net as is $X that inventory There earn as improve million million. next our to ability $X With rebound. an trying sold year $XXX will spent mentioned reason we’ve also end year. the feel relief lower by asset-light $XX million covenants, of it. disciplined it’s doing has been approximately for line really further again, is the working year. the normal talked you a But up as cash has et we about sure that prior of as to cash compliance have CapEx, we bit around those Not think year. capital a need On an proceeds as which company than see, the the what we CapEx that’s about build million been one were the improved secured at still that the levels, Cash of and some again, page well. to compared $XXX model you our we’ve that half, end out of can very And to under of and burn and burn sales as also sales levels, if in And to XX, we last of which very, million, ensures year. managed calls working Speck last from if a easy June that The numbers that need and when reasons one in cash We

an business And potential that. And profitability to do higher you basically there North it. So consolidated a the what aware to of from allows should be was so America and that America us North loss is to both EBITDA is us business transaction components removing we’re Speck the for accretive a making on this focus the results is losing that and that well. as

So it business additional we overall proceeds, which to the be of further some profitability managed will to and improves the secure delever. used

this should well in quarter of result you So as a pay expect as happen million in down a should debt that transaction. approximately $XX that

severance. half associated have about XXXX, first we the restructuring During million $X with of charges

we we edges million driven July, SG&A Even there of what XX, Speck charges, of end that can largely you Speck. when again. compared as we and to message On overall to is region, the an huge look to see that is, the Europe in SG&A, not was to by starting that at will is I to in total continue and quarterly into asset held all year. we’re due numbers think $XX some sales in looking think are broken closed sales terms on So, related manage the But saw around do focus why the starting I regions North the continue of restructuring was to at moved there you for CGU to by out to [ph]. get that. charges which non-cash And impairment about some back $XX also you looking at impairment have America though come you we transaction. how the and a of And million, Speck were page feel we breakdown, for better the that’s impairment see half start sale the perform last

America, you’re whereas the absolutely about perform behind very to both is although, to Tourister, in North we to that largely American as quarter about And very, by sales is it’s about India cylinders, on terms a QX, both America seen really China that, trying all in started, Tumi, until starting the compared the is a well. everything half, driving right in North North of America Asia Europe happening now it driven we to Samsonite, have thinking Asia bit well you’re as business. brands, recovery, by India, starting recover hiccup, last what’s If year, really think of really see we a and firing and had have

have haves not. there Asia, and still a is of tale

So still be. certain countries needs vaccination lockdown, isn’t it the are where there’s rate in to that

will starting well. And Tumi this across to America see And as China Asia come perform well starting is performance across numbers as later to and so as you well. the performance, region, the the largely again a is driven Latin as bit back on India little around

So we recovering. were includes in very pleased the positive into head to and driven Chile see America, as business that Latin we all largely of the by regions territory are July back back that EBITDA -- basically

bit mentioned, sales, North here to XX%. you of going a down detail, -- in as So were progression the page just quarter-by-quarter can business, compared QX, of show July greater down XX, you little down of almost -- as from America XXXX, XX% to see basically bit you on a north as in just the I down the little XX% and

So, pretty sales sales point -- back that and start meaningful people really travel move, when pretty, come recovery, making quick. to when do the

it’s a Delta behind. the got similar numbers Asia, looking of and sales. last about happening July we that up good did their there is on India little we recovery, North bit we well, in -- stutter a because as India’s quarter albeit -- then the just as in a of in the at really less a we entered time the bit expect been step recovery variants And so Europe, and middle a You of impacting well. trying a again to we America Europe, be it’s The news done you’re pick of together you will saw that aware it a if have we put ex-India

QX QX July XX% and in that were almost already XX% we XX.X%. Europe, see down down in can you down then So

continue a meaningful So in basically of quarter. America a that the similar July in fashion. should just the seeing trend end is from that you’re recovery And Latin

quarter page that et of just and between do the travel little the continue So, well. speak there, to it’s as to we season bit non-travel. cetera, we will that as And back-to-school probably helpful hope the and I get give by mix into a some around think flavor trend XX, as well. of channel On

year. half, terms you’re saw similar seeing basically channel we of in last terms the by So what performance of in

of by if about well of QX year, pockets open. again, some shut was and of strength are Although, North compared generally largely you’re the most as in last wholesale basically has open obviously, this America of as so there’s retail are the year, retail, Asia, wholesale restrictions. the all in back most when still thinking But doors started the QX, speaking, everything in business, outlets stores to driven where the to come areas, there’s

driving greater a And channels. in so those that’s push

very very, been during In and has Asia. us course terms non-travel of especially in travel mix, performing for non-travel last the well of and the year

As we -- split about XX.X%. this the XX.X% travel non-travel QX is now, think of and is now XX right year,

XX.X% to up numbers compare in to XX.X% year. from that it last year’s travel QX Just is last

specifically. basically been those and margin to business that are XX, luggage get to side the So On cooped gross that trend about bit. what opening up, really driving people of continue really you a starting desiring well, we we’ve to is to so have that’s see up and Europe, expect out little as in geographies and page now right move that the talked

margin of XX% see just I think we’re in of you is in June, XX.X%, and number breakdown QX repeating, it QX bears well. August at to now July as can part and sort beginning already gross the to the into and XX.X% that up continuing

GSP pressure inventory this point We is have compared million to It $X about last an is obsolescence numbers this of year year. not lower that either. important in these

hope so drag But we’ve retroactive benefits there. and taken little of specifically. it do fully that numbers. that well, gross headwinds renewed that renewed negative seen is with we’ve We seeing as GSP XX, this we margin obviously, us the has page hope a that gets the a and the for us. been that of a that bit upside proud in America bit give On So gets in we’ve really it despite this actions of very message is improvement you’re North SG&A, on the quarter could

the the presentations, rate always previous that taken in and benefits what are. actions run So we’ve outlined we’ve

year, $XX we’re they’re the prior see as in about better. can of compared result, the Here million XXXX, to lower XXXX, SG&A $XXX that up fixed than showing million you not actually even expense

year. talked half just about run we rate $XXX benefits million, Now, obviously, the this north is were that of

here still well. So there’s some benefits as through that flowing are temporary

right SG&A bar. point now you so guidance one play about On and see the same that that So on is, benefit or you’re specifically, is that I the red see in rate definitely think a reporting. out expect just a code we’re numbers XX, of have EBITDA into here by note run starting improving to fixed page the $XXX zip that given we million do we’re previously that

and So benefits of out fixed you base. we’ve in basically terms gotten EBITDA the reducing a of this is basically giving bridge adjusted cost that our

the keep thing The say for currency in sales period. constant mind, the first that I’d is,

half. higher lower We’re $XX.X million of have by offset we gross that comes $X.X do what then profit we’ve margin our have sales currency that. million our half managed and in we multiply And if margin to to that decrease from XX.X%, that sales is the sales, to gross percentage terms constant of about the from you of $XX.X just million of

So that offset gross that we improve million $X higher. our to even have have sales to would pressure, and been though margin managed even we’ve

more variable had recovered spending means have the of we would all sales coming it So that that we SG&A are if GSB bad than renewal. back. not thing, is Increased a

really this million So And gets to that really of come advertising up. and just is rest SG&A story then flexes sales of of little between fixed the of bit $XX the million down savings bridge $XXX of about up the EBITDA. improvement, a SG&A us for which million $XX

in terms little terms QX, sit we managed build of we expected right more inventory between a XX, Where QX. burn to better we’ve every have of to between actually keep QX QX. bit cash the In cash now, cash on slide than quarter burn even burn

out. due is part as And so inventory it comes goes -- fact and that it in, to of again, right I the think,

So…

Kyle Gendreau

Yeah.

Reza Taleghani

sales capital we benefit … of that this is basically lot get. the driving a working

of you I of these a earlier burn. these million, and on inventory cetera, the trying about working talked benefits to the levels to adjusted the to as terms benefit sense et at EBITDA about cash both driven gives cost $XX.X feel the we net the on and we’ve cash still try numbers as we build but negative then mentioned of the you that it very some build cash so quarter-over-quarter terms little of terms happened a XX, anything burn Page cash of EBITDA adjusted in be about well. and so by position, in burn don’t all good reductions to And material. levels. really It’s in bit looking expect that’s QX, our capital going and we’re think us

the million positive adjusted driven, think building would if this as in be definitely weren’t of cash you is we That just resulting inventory, get in $XX.X we to largely I of territory. this QX cash. EBITDA positive year,

spend is think and good terms that concerned about that a we’ve And in of of very EBITDA we’ve the this both a in had of something impact little change Luxembourg. an nor taken cash minute -- liquidity. feel we just bit the overall Kyle so earlier, alluded that On page overly terms I adjusted terms XX, selling from message the I actions not of the will to the is business because in perspective, tax where economic it’s the stands of cost from rights we’re

the moved so significant And First that in brand That’s that to would to makes Asia felt global we review We have availability that a Belgium, that Belgium IP the of growth the support in sourcing in the to there. a Belgium, to IP Singapore. been up sense that remainder, place place talent has created Singapore, best so have in given good we’ve our in European from and hub brand been the of to a That’s did that set the of locate business our be Luxembourg. of Obviously, Americas have to we and now. and Singapore. hub. been operations that sold Asia has have economic rights it

that that result sheet, employees been And order of very been careful should support from of ATR we’ve few to forward had. to XX% our can historical we’ve anywhere As within past is, items Kyle had one-time years, Singapore our well. think, managing terms we be terms large around that and level net-net that we that mentioned, we’ve of of debt. the this Kong as the cash Page relocated range of what range. excluding balance to that we expected is going over in the XX, a the remain actions, a expect tax the I in and means typically that as these of making the XX% the tax rates has to some And effort from the ATR effective between an perspective benefit in to Hong support net

$X.X So debt net to debt the had obviously, repayments. at June, billion, in million $XXX the we period down

point we of since better relief it. covenant a on relief to so individual on a last but $XXX and we’ve earnings part saw we other will down covenant that will and recap Term we press through I get the got XX, Loan that The we On page basically, releases which additional of our could last covenant paid I slide. us thought, everything. touch the secured year B. But through, note on sure million, we you am our time These think all is release, the transaction, pricing were beyond. had question subsequent headroom as just that obtained next on

will now I so cover be in way just the that to to is, this the EBITDA, right now going we’re calculated, is our try So EBITDA sitting we it have deemed QX of year.

is number QX the number. So a deemed

add lenders we the deemed were able as this will be should and is -- the treated then so an actual and number will that, savings effectively about as with of comfortable our $XX.X run savings structure. actual in achieved. another we’re have permanent as get each to SG&A be and will number aggressive improvement add to that the have that be is and in a QX the -- numbers quarters we numbers. release banks their repeatedly what basically is, $XX.X -- the EBITDA covenant these the -- million so able numbers do million What And around the rate of logic result their talked those back we to be plugged to And that got be that the historical

million divide you able periods. have as so X, $XX.X run that $XXX million a on if by to deemed basically those we’re rate per you benefit And and quarter get

exist financial but the In addition than to covenants unchanged. that, that other remain the -- so existing

a so of little we’ve from ratio, channel So our page the to times the two B-X. getting obviously another is where Again, result is very which quarter, for this we $XX on million. The you $XXX breakdown that have that to reason that going million basis sure able as are had, that repaid to very covenant shifting and X back down in by into The it’s this as the back as of our we’re $XX managed significantly in as be ratio, additional we’re on we’re million, at On aggressively good where we’re make continues -- we’ve to leverage We’ve is down, we savings liquidity just working to net on that. than really the to quarter we base reduced and net-net of inventory remainder here. an top. the points entered historical cushion improve this this to million needs we’re well pricing our sure have a of Term result get feel net-net make levels, lower this this Loan Speck than greater the our instruments even of because want that be paying as that in that we down less products, coming that coverage XX, covenant least trying X here year to also source we’re in we good there’s secured efficiency really X.X capital management, there the which to improved sales interest a And than again, we an is, of needs the at and capture been. all times. sure look tight debt though transaction. are sale $XXX actually fact next of factored. year, -- is capital note go-forward are environment the I working inventory we and to interest not inventory levels include and and position, net cash about sales a Again, rate the if working getting make capital we to And $XXX by of close anything, our of million once stepping burn, think level, down does been be times

Kyle Gendreau

Yeah.

Reza Taleghani

this couple $X.X in bit very a $X that just in around of tight QX, all-in-all, more a good very, QX, was million little touched remainder terms that. story around management CapEx, of a So, the again, million of on CapEx, points earlier, in just very we And that.

stuff but tight or bit doing, that very we bit we’re little a a other store have ERP as well remodels, very, of of EPM than it little overall. We that, as stuff kept

turn outlook. So, will Kyle with for that, I the to it back

Kyle Gendreau

Okay. Thanks, Reza.

One, for U.S. recent improvements a extremely positive outlook, as couple seeing see and very same the Europe. July just sales, we’ve and with do in pages. as I happy and to into EBITDA it’s of thing. And an looks for August in get we a we’re the So our we’re we’re QX particularly strong as going encouraged to started, really stepped start exact QX, to like

Delta point. we’re to as all kind and by With pose So this at the in recent we’re know, continues what really, COVID-XX, the seeing. challenges, globe of surges said, encouraged really cases variant, that we across

slower with markets Some vaccination rates.

the half, earlier. I second seeing we’re see Europe like vaccination see but and some behind markets of a at strong That of been and pace in some will vaccinations as Nonetheless, encouraged moved. next we’re -- the recovery Europe which in one, U.S. and U.S. vaccinations of delay Asia, QX the the probably these will Korea, recovery in kind we’re have go -- year, we are math of to markets. the into it, And really of has on which to So our where country-by-country, level. expectations big bit seeing, more Japan approaching look continue covered in Clearly really mark key very and QX we

now. stores seeing open We’re

many seeing down, markets locked like other moving. that our within more really had markets are Germany countries We’re of major than opening, Europe really been

that recovery a really resemble will what And seen so QX. we’ve U.S. in in we’re seeing maybe half the second

QX, in helped markets really we In we’re there. almost encouraged amazing will fuel India, an the then India for Asia, of Reza So XX% XX%. recovery close down took and a really drive think, in a XXXX level and was and we XX%, China it’s within see what story good said quite like step And half what we as a July I for down up had QX. will year. story. earlier, backward QX India, we’re said, seeing this to ended to as and which with to QX lot really our Asia and back of India, get

like and China QX. a move big the kind has Latin prop South think, in and bit the Asia bit has I these for as up, very strong of QX started again into we July slower. for well Korea, from XX% QX see, And was and And America to in rest really some time us, range in then stronger down levels move India will of with the and year. July, the I pace Korea into been where half the back where was for But XX% recovery up Chile, as can example, of down Japan, that and a a markets take will vaccination more Asia of particularly in as that move will other markets a vaccination little all little fuel

important And in as is So Latin will us. all have Latin for positive regions was positively along EBITDA for see quite Chile really which America business overall pleased I moving, gets benefit EBITDA July, we America. That a have stepped with market our to as big of into territory. our

we’re seeing all the despite regions. optimistic we’re So challenges our quite across with that of what continue,

manage But and kind margin to ability gross job like global strengths amazing significantly the not rising. our under material teams with remains of up freight real year-over-year, the the teams and are earlier, things and of organization I one GSP costing. costs doing costs As sourcing particularly is an and renewed, our of raw said this really our our pressure,

moment the their new can brands. an those down shipping We that on is achieved sourcing historic amazing with QX, to team to we might continues the task with increase. and of But I the positioning to just now see bringing getting teams really and have one to inventory challenging And and July, what just a as take we make manage can brands are of We where And we’ve continue price side. position really industry-leading June sure -- gross manage have you into stepped margin and levels. back our deliver. the cost say done challenges really job this to in

with challenges impacts are timing on seeing these and products. having of We container are with shipping port congestion delays,

and of And as Reza risk. that. in in. so, bringing that remaining to in, but prioritizing as drivers nimble order of in are ahead the out our in quicker teams this fast making inventory and get really so we’re of some said, And benefit taking we bringing get mitigate decisions to sourcing it’s And going full of that really that as forward what it’s coming actions products we’re the and shipping business are

it’s full I hand for and well managing a we’re though job in again, sure. through think, so, time And this,

We’re managing cost product increases. the

managing action taking we whole to. as same and spot point The under every -- far as We’re need that. where through pressure so everybody’s and industry same pricing moving is exact the in the

to spending disciplined this and everything very, temporary helpful. staying As end said on which on as everywhere diligent to year, through manage. far not very right the that the continue costs, but controlling really very what we’re really only benefits, on and fixed where in can can has remain discipline -- may the we’re we been have of those, completely mode we CapEx presentation, as stay during we we expenses, Reza going manage tight, we his

certain expense, that very at and we’re marketing. marketing move, we very, of are to we forward manage on pushing as starting closely. and biggest We the marketing we see, to But looking It’s one markets levers continue have.

those move lean profit out be still from comfortably you into start And as to us to so starts kind move, markets start below core messaging our will advertising the levels rate well and run territory an on we’re to the story But spend. to in historic see our we of market want brands. with

lean as So in see to that you us continue on will well.

what forward front back few innovation. we product pipeline, sustainability and of and have next We’re strengths look half with in we excited year into kind products efforts really will be I as as of offerings step of highly and year, quite I a real a us at the products for our said, our innovation from sustainable committed and from to we am story. what our perspective our I and about the And real of deliver one a

So to very that on excited more collectively. a team we’re as and come

We have tremendous liquidity.

$X.X We’re billion at of liquidity.

just of projection, XXXX I stepped the to slide, biggest at trends on side travel feeling do and what to end which we the And just other were a into of through full this disruptions the the IATA liquidity of and is are. $X.X where And how forward picture way is a last of to business really confidence look billion need imagine a get we trends liquidity. And and kind that’s this, the all an am think we business at kind story. and might we which gives what travel moment one about this the you we’re I navigated in the I could at gives captures sitting me in think XXXX. position a of that of I

okay, XXXX, sense far at we as for So passengers right as XXXX pandemic that be into what we’re or kind X say you a that we in what is we XX% level billion, year XXXX, from of which gives global would tremendous to see, this think in we’re the will a went now. seeing around recovery travelers, whereas

always of continue. even think, back would out, this historical travel So disruptions history all come recovery tell will I’ve said, you get out our comes it as when I And way you, stronger. you the when and -- views

travel And growth so of where my the end view see really step were numbers the basis start we you XXXX ahead to before we XXXX, and of that get to pandemic. and get is on will in forward

business. we’re lines kind And what as profile year and of changed with are, up next profit of expectations you XXXX. into know, this of think we’ve all so as into the our we this lines up with And get I seeing, it what

on these we team stepping that to comes profile start a we’ve were get levels, should really as profit than So out out see focused and the of XXXX laser that. what into we stronger you got

we last is that’s on My slide So what Q&A. have.

to it William, excited And will coming As travel quite we’re I go seeing to back, coming see it is we’re back and you. over back. all

very anybody questions happy might have. answer are any We to

William Yue

much, think now for very from is Reza are Kyle Morgan for on Great. open your Thank I we you Dustin Wei Stanley. And presentation. one and the And Q&A. line the first

don’t So, the Thank you ask Dustin you. let question? operator, why

Operator

first from Dustin Wei you. And Sure. Please with [Operator you. Stanley. Thank question ahead. Thank Instructions] our Morgan comes go

Dustin Wei

for Thanks my questions. taking management. Hello,

to in called, only I really versus So of learn the, having is variant it’s positive especially July first think, stay. given down XXXX August and learn XX% Delta sales, a China. sale really to question positive that quite that so lot that just But is to impact, related also trends

is the demand maybe past you guess, travelers kind situation have the the from went that maybe number the a last we for luggage offset air decline just remember year a look second and this I do variant, data U.S., I bit I got decline call, of little still by of plus But is talked look past the third the see picking actually is second dampened from half, for in few domestic we down, just the second So sequentially? weeks, if about the but you the and And the when travel? half sequentially, the the few in where up on in U.S. XX%. a kind question, China, in despite that not weeks. of Delta in sales August we at the pickup the if over at Europe U.S. XX% quarter having TSA also the of the growing

fourth be of quarter? of recovery also if is lot domestic decline So And year XX% about rate the full we for in or should XX%, of that if we that equation assumption that the to the will remembered, what’s recovery look on look XXXX, of the full the XX% the at international travel? next depends the of Does look Kyle, for the to XXXX, year XX% your I of sort XX% to versus XX% the travel. XXXX management recovery XXXX mainly a travel talked the international still need down at the versus a of behind like of equation still decline hold, we light and

sort and the So got one the I this have last question on side question of on the sales the… on

Kyle Gendreau

of mind. Dustin. On so back, don’t just don’t lose we will you your Hey, those we come track if questions,

Dustin Wei

Yeah. Yeah.

Kyle Gendreau

Because of lots there.

Dustin Wei

much. very you Thank

Kyle Gendreau

with Yeah. start want Yeah. Do you to it?

Reza Taleghani

Yeah.

Kyle Gendreau

sales It’s you’re the get China QX, China code. year Dustin, let’s -- start last down zip at to -- your you sales it’s looking yeah. compared When if and so QX question. XX.X% with same the

XX.X% where down So China QX. we’re is is

that So the and China EBITDA already to important the mid-XXs, about cuts again is, have it’s the with the cost happened China power realize there. that’s thing in in teens down of margin

So the realizes it terms that through well EBITDA as of don’t there. happening flow sales about think benefits only in

There be in as China to without in So started is just weeks. all bit blip of on a the know and travel to of for was there’s couple a any that domestic now. wane little in China continuing know. little again. some back certain that was this you there right I area is China a provinces international of And where COVID

travel That pretty with China of one… the EBITDA but in the first feel XXs level, no kind still we good teens mid So being margin. even business, the down upper being international about was mid-teens,

Reza Taleghani

we seeing Kyle, we’re Yeah. look And I of August. think, kind and when clearly at July

be story The well. strong We’re clearly seeing kind of to Europe very continues continuing as to U.S. build.

quickly wholesale kind there’s ordering base of wholesale large in customers a are customers, the the very in. have We U.S. where of

of which the the So we’re continue reopen getting some categories of kind to that will benefit into QX themselves customers as QX of and luggage start us. for

will that growth. fuel So

us everybody variant but And markets maybe the the is for gets and chapter think trend weekly really for in travel, everywhere move, repositioned are we downs continue continue kind kind we’re and think be India really that’s my as recovery on more of out. I and so I was into ups kind QX in take to think and China But a saying think continue stock, think, there. we -- that’s starting comments before feel that some Asia impacting here. move. going noises of might you of playing will will I QX seeing. probably I the is fuel of a see Delta as will I kind they to take into concluding bit what other I yourself better countries of to see lot movement do to these But

results remember QX we down So team code XX%, is zip July, number XX%. right, next you seeing down it can what start better we’re August. I if will in just a Asia stay in maybe energized the really is and for seeing. North we’re is achieve as of to the probably trending as the just This get America continuing is a the QX about year and bit in into see

perspective. big next will of we I that period. of travel starting largely plan the we in it’s in an to right as going for year as we think or guided probably made, I margin as my as to weeks XX% go to I’ve of Belgium the when chart, you that and what XX% so back of a and October, bit kind us before of the timing see were QX Asia, year last at on is year, which think -- I into kind down out I low-teens you we’re of of going half expectations to middle into. I for And there, a to it’s really do will into growth question start weeks really summer the we get will that be get a will Asia slide XX% zip will not seeing XX% down by see the is and as of some to that is and be, the today. September, holiday see think this we was but you sit I for QX last IATA up somewhere borders and I showed we’re two November, because be It’s story XX% think of XX%, am levels. due the weeks we’re that’s profit of QX of move two outlook that’s the see as were a which which untap of far we our is travel important talking can what into stuck starting kind Asia as think, end below there. U.S. we down And the kind full we -- borders And really the get down view some be kind and in international what to see kind that, international improving But will my are. XX%, continuing moving off next from reality so to It’s code producing well. Asia that’s for what XX% and kind in to view And move. international moving best had and you Italy still be fueled know get between if well what close travel will on to not I the we year from we the Reza And going. I the of still into to the get longer normal of that more. domestic bit Europe, ago clearly think three view already bullish

I am for will Singapore trying just, to the think think and take to going October I bit get play longer get I of that’s to in to to a just month we example. And out.

kind move. at of historic to the It’s that of moving start just pace can not levels. You it’s

side. sales net the that’s So

ask can your like. if you So next questions you

Dustin Wei

the Thank Yes. for much all so details. you

details non-core So Speck, could have so on little for just sale so the more the, brand. lastly the of a of profitability called, we

rationalize something terms three of further overall than going that margins the And lower we can’t improve to just forward? generally group’s core then they there were the brands in So profitability? is

Kyle Gendreau

was Dustin. real only Speck the drag,

brands shifting other as The you the adjusting. kind know and other of been we’ve

but enfolded so during in perform very other performer dilutive not really brand up that’s half America. Gregory brands tier, And we performing margins into fully as I It as on think -- profit when business third-party which making get and to and probably brand now I the the in about our that We because as well. would and code into as as American talk business smaller North a a just about very the and and the and the business will line business to year North right best size America zip amazingly again kind performed code and on into half talked continues is we North business, a what pandemic. nondestructive. with we that well think here kind in a like of the portfolio eBags which called is of brand America our year in And folded of zip team. the same a a high is in only I brand, the it’s back we call, that’s core other at folded see well. North last Gregory’s eBags is rationalize ago into the performing a It’s

that and So the trends really kind really following outlier business. everything followed Speck in our were us. for more industry with different, non-distracting wasn’t the distribution whereas non-distracting. kind because to just and they’re phone devices, different really was line similar up is core was else an it really of launch of channel and lined It us it of distribution had channels in

small the small which even quite our very folded and we’ve is we’re is territory with but fully with And So we for brand our again that there in very into offering. and is team happy strategy profit them. Lipault, core French brand which us, line Lipault, have in reset product is and

the any perspective, that So I see from on. was rationalizations, was us And Speck think, one kind will move I has… Reza obvious don’t for other of but an think to you EBITDA

Reza Taleghani

-- Numbers yeah.

$XX.X get for Just before December $XX.X XXth tax sense Speck December loss for was numbers, million. XXst net so was million. the the negative Net after-tax loss year, as a of you so last or Speck

you of $X.X around get it, just for to the year-to-date for Just million, you Speck give $X.X a X/XX year-to-date it, so sense were million numbers numbers a negative.

Dustin Wei

Okay.

Reza Taleghani

Yeah.

last year million. year-to-date $XX.X negative was for and So

it was negative it. and so at a and it with we looked some biggest all of non-core, us, debt out get repay most, has amount as, of for we for the one EBITDA drag was So the it’s decent brands can that that the it

to So it. very it logical seemed dispose just of

Dustin Wei

you this helpful. Great. detail. Thank Thanks very That’s for very much.

Kyle Gendreau

Great. Thanks, Dustin.

Operator

you. Thank

Jefferies. with Ling Anne Please from you. comes question next ahead. Our go Thank

Anne Ling

XX%, management XXXX, to covenant that fair margin, question cost XX% exceeding have the EBITDA we EBTIDA been which follow-up that it be to decline you a or back -- just that in assume EBITDA on Hi, adjusted is able on we to assumption assuming done?. versus should XX%, estimate, of adjusted So even around year we doing Hey. have XXXX topline? we mid-teens, XX% savings the is are year go if that And XXXX’s -- year margin, team. the just given Dustin’s to on the like so mentioned

Kyle Gendreau

Yeah.

than -- we for off better U.S. us, working into XXXX be will tariffs we if So because the an year you remember, the was business. had

Anne Ling

Right.

Kyle Gendreau

And will better. so we be

really to. where is time at get for been the thought mid-teens, into could I’ve move I’ve that starting Samsonite, that having always comfortably be recover. still long that’s of business we to kind the territory a to doing And room here this will territory We

taken So that’s say, surprised levels there. we’re at of something the business have where the in and what be like that. or exiting the actions same XX% us we’ve moved I us as kind XXXX at down, you QX wouldn’t saw let’s

it. So it’s see We EBITDA the play -- margin into is to it year. going can next for definitely

right looks July now good. it pretty and in pacing of kind We’re

Anne Ling

Okay.

Reza Taleghani

you probably even in the and then seeing the to margin already to and should profit already continue so expect that mid-XXs You’re gross improve.

Anne Ling

Okay.

Reza Taleghani

should And margins get to the then, to cost mid-teens. given actions EBITDA through to that flow the the

Kyle Gendreau

Yeah.

Anne Ling

Sure.

the the the GP still price, material about, previous regardless in your of for… So like, in terms on maintain you margin mid-XXs of rise raw guidance

Kyle Gendreau

Yeah.

we’ve and There’s to margins. focused to very coming but very had on at we do able the that lot and We’re been manage what we’re to on a clear need periods pressure we’ve manage increasing of group, that.

it’s good. So of we’re a lot but work, feeling very

very continue We’re closely to that. on working to with our teams deliver

Anne Ling

we and sure clients second Euromonitor market we looking is were environment. other The my these why of data reason the and at stage the competitive about like got pace or this like this more of market stage, Do am in whether the like somehow share at at than the some they we the ask are data in has markets then we the we are -- are years. that share interested not to is share maybe Are I or follow for -- then they’re U.S. market players it’s group, like correct key number whole better or this days? like loader company I is And Great. some that, -- like focus the like, stronger. of market are lots some not for Do focus? it couple we on, market past not Samsonite or do look -- off question at the like, that if know, need whether is the these Right. recovering, recovery, like whole

Kyle Gendreau

I focus, build our continue I will right? Well, leadership it’s And on concluding to think is, way always my a we the described statement position. in

Anne Ling

Right.

Kyle Gendreau

innovative kind We’ve portfolio and to amazing of much business. of the bringing we’ve move out. scale business. Many background drive during really the able been this that to competitors We and drive in to pandemic products our invest have continued the this we’re haven’t got

in team business in So inventory we scale we’re at and now advantages products I that, is, and my have to with selling to call share bringing driving one this gain last expectations and bringing the so sustainability pace the continue not to and intention It’s competition. this all in. the around placement with us, from just are our Many story, get of every have gain what’s moving and we getting just to not sheer and is, on have a where our going of are. that and gain others competitors been able amazing the for have with advantage And It’s we our to matters forward, we’re challenging. I we example, bring will product products U.S., are will share. better struggling wholesale customers customers as trenched in navigating. we’re many nature there amazing supply But we’re of be share still. as probably, back to the even by offerings it’s of and a really said off move

ahead good. continue or slightly line So across the share expectations we and of am we very I we all I should And be scenario business my -- that in will gaining would drive in I markets -- trends my as overall that to well. expectation. feeling will growth the in be are is say

Anne Ling

Okay.

Reza Taleghani

advantage obviously, factories suppliers. relationships is of the leader our being segment to as on, we And deep the start come with have back

get So in typically regard. we treatment favorable that

We factories. have own our

a environment it’s peers. we’re to turn to as an with factories our very where get in a compared our hard help And own position, supply, actually on in that. thankfully, can So bit little financial we good to

So should continue. share I perspective a that think market from

Kyle Gendreau

Yeah.

Anne Ling

I see. I see.

of was better than see as we do So market half, the industry? even gain share first

Kyle Gendreau

going clear. Well, be to I am

can we it. think sense I

to the we perspective story the from gain, wasn’t We’re cost recovery, of the move with really sense our in open, gain drive not it should like things their just placement get whole, is like when vendors. from sitting edges to and to management. get relationships. here vendors we two we really we and we and strong on we’re this starting kept relations share in our perspective going Europe during vendors we kept studying around an and months. studying we markets case be paying That share really We’re both inventory what this And can the turning But and markets that kept we recovery weren’t really, as the last market our a well-positioned see business. Many our right? and forward. It’s capacity clear hear very able suppliers

who partner And so, as will with, turn they when it to do be want said, things on, us. Reza

Anne Ling

Yeah. much. Great. very you. you Thank Thank

Kyle Gendreau

Yeah.

Operator

Thank And you. ahead. you. our question Instructions] you. Thank [Operator Please Thank with from Rambourg comes Erwan go next HSBC.

Erwan Rambourg

be see a teams It for would to Well congratulations. done. and the there, Hi, profit. relief a

year are next wondering given this loss profile I enjoyed if are products with I tables fair close I low, were assume if So go so to on your you for year, year? a things on. am willing HX power pricing inventories Secondly, Is it being you or and existing And you in wondering Thank can you very full just three thirdly, any in discounting brand you’re increase understand clear I to am to any the in going there’s low-teens there’s that very to had, market? am exercise. have then, sustainability Are to margin on you able year. given of I that? should targets you the on really by July. X% some the different able just margin that if and I full less where internal for slight for you. just X% share or wondering the and the brands prices between

Kyle Gendreau

of year, way along get margin was the somewhere think, year into what for the I get as that I this think business XX%. the had overall ambition business was for. start this said the of in we to X% to an the And kind pushing So, to I probably I try I

still we be we for full saw of I what But QX will because business and the of the the that, digits of think we Erwan. start year. be think in QX, mid-single I we short in will stall --

I do X%, X%, for end expect you X%, you say… So math, your on the can range And low somewhere think maybe full the between year. let’s what of is can the

Erwan Rambourg

Yeah.

Kyle Gendreau

it you better for week, we really be I’ve a And next exit So a sets improving slightly we’ve that. team senior that If can us does right? what it of… call for and of the trend got up I on were just think meaningful year, this indicated. means And kind than for QX kind will really QX, which story

Erwan Rambourg

Yeah. Yeah.

Kyle Gendreau

delivering really kind question a still we’re there to … is Because control cost full out gross its of is need manage margins, pricing all your side and coming business has which with next we around that recovery the that make that and plenty question on and will be structure power. can play way real power. to pricing low-teens of sure the let the that we margin in of

and seeing things real, we underlying will affecting of is, prices. there’s inflation cost be labor inflation increases. Tumi industry. and the We and very Samsonite around affecting It’s is adjusting said so will We’re one increases general general materials. always is this entire whole seeing be prices It’s industry everywhere. I’ve because were not price adjusting this And -- the

in our brands, power just operate positioning. the pricing also margin challenges raw cost a clear shipping challenges of smaller and we in with increases significant there’s space are profiles, our labor you decent it’s within profiles often power narrow so profit but the along imagine So and have with and pricing materials small can competitors very

kind will that that those better actions. we and manage much be of We to are taking

that there to And start sure and on like needed of is actions will as So right did maintain regions things when place. that. shipping all of to adjust the take where will all that with we power that to our But settle costs the moments taking make in then there’s of brand. out. we that the are starts I margin we advantage be that and be We within that and adjusting we lot some power uncertainty won’t a across think

our XX%, profile margin on that XX% historic June and manage July rate right to historical is the look run The and which we’re touching rate. this now. in run that in is real of code right zip will for We kind business

Erwan Rambourg

Yeah.

Kyle Gendreau

these pressures and well actions positioned we we’re into lot as of A next carry and so year. really into and as costs we’re as QX, get into the QX QX speak that internal and taking as stepping and we And will targets… far for QX,

Erwan Rambourg

Yeah.

Kyle Gendreau

… the scale introductions of I the incorporating am for and within innovations it. growth am over still just are brand’s we’re teams story for working be of seeing new products core that seeing with will clearly I XX% just that one kind of It components. sustainable anecdotally the on of a

at as we’re not of products XX% Erwan. of the But continue where we to we to will little future move far a is, know to that And will But far to ahead it north do is a our little off a forward, that play real and continuing if can so so, XX% grow is you Tumi math direction, the moves of thing pace is that’s more in we if Samsonite the at that’s a incorporating bit Tumi take this good that out. example is time so how unreasonable that and not Samsonite of continue sustainable Tumi XX%, and materials. brand can the is it move. need question

Reza Taleghani

a Erwan runners to you products And have that point are selling. already obviously that of we better that know have the base been global

do how that’s sustainability those for So you it. introduce into

Kyle Gendreau

Yeah.

Reza Taleghani

the others, driven that have and to new when more you And that and existing products coming some -- the lot trying look you then going Magnum of so product when weave in sustainable you’re of have lines is you in, mix towards to it a Eco essentially. the but at obviously, be

Kyle Gendreau

office… So my I have in

Erwan Rambourg

Yeah.

Kyle Gendreau

I the all if to but fully you would we’re starting around zippers zipper on material. using work wouldn’t made that …and have and a tapes to way inline degree know components we if you’ve that into for get I polycarbonate the made it change this don’t we’ve luggage liners Tumi, And and from the And change post-industrial through and for shell been incorporating runner inline playing and didn’t moved now away mean, and we’ve here tell we’ve I recycled a inline that’s material is polycarbonate showed an me you right before. product our there. that across that RPET. -- shell an change you, maybe real away to the post-consumer, But right that okay? be sitting have XX an and from this Tumi shell recycled liner I incorporated perspective that’s of you recycled of can get And will lines. right with I a many

of a packaging ton is a work story. make that sure to packaging on maximizing all kind on going our have We of of sustainable

lot and it couple you’ve last say here the in on and heard over organization think the of whole it So going I has there’s me calls a engaged.

continue So wonderful a is it move here. to to just naturally in going direction

a which deliver our on durability, products, products. last, that always stuff giving but going on our our that’s longstanding While been to really second then everything we story, purpose really has sustainability delivering materials within quality,

really the to starting we products. We’re of do think circle and how recycle full kind about

recycle. European next… be a wonderful the full the of and doing back circle things of interesting with parties story will team we third and over do is a take think work our on so kind that I lot And And how fully

Erwan Rambourg

Yeah.

Kyle Gendreau

years as too. continue move on front we that to five …

on here. lot a there’s So going

Erwan Rambourg

Yeah.

Kyle Gendreau

where excited I we’re about am going. very

Erwan Rambourg

Okay.

Looking forward care. a lot. Thanks it. to Take

Kyle Gendreau

Erwan. Thanks,

Reza Taleghani

Thanks, Erwan.

Operator

next Bank comes our Kong. And from you. Please with go Thank of you. Hong Li Louise question ahead. America Thank

Louise Li

still questions. for on first the year. my next question you second trend Thank Hi. taking expectation our is my on the half And in

guidance think right So not I last that situation I time the remember we this gave now. that COVID when is severe

current anything miss partially when here? margin, to very is So maintain this like we to secondly just So GP won’t from comeback. because I expectation GP did about the situation? they channels, the this so is stocking have margin our market mentioned given we’re still confident the that improvement due up inventories our So enough

about sheet, this so is you. margin debt in half expect my case do market level? this the the when the so balance So the within So we a pay proceed the second to Thank GP is to remains other we last can if down plan any have can stable relatively question improvement year?

Kyle Gendreau

Okay.

think, So It’s from across that’s cautioned challenge is around still a confidence about concluding everything COVID us. markets. perspective, I also here. still a my comments

do take time like some on so our I’d we’re of Board, these markets we’re that U.S. but more roughly and about factors And think seeing. forward we’re caution views. we continue and the Europe all continue But take those is and Asia to ranges that seeing going kind that I into cautious

where place the So good base also would off world’s different very so a but pretty I I the trends and we’re the feel about sit guidance, today I I caution in we today that of it think seeing.

off aggressive but We’re expectations. being in our super we’re reactions not of basing it

it we’re have against and that all and be the what better my But of saying thinking. structure rather we’re that flow. together. just and cost So over manage the we’re say deliver models it’s own I I’d what to could tending cautiously. manage like watching and kind I than is reality we’re that’s think the manage cautiously this

levers, to vest back but managing in there. need particularly plays cost to and think CapEx seeing it So to year is the of still as this cash we’re But will close we as with which as as I outlook, managing to going go feel out how far very half our we’re for flow -- Again, everything next good see be far I just we’re and cautious. year. why said, do manage comfortable pretty I what feeling we’re see, the

as end with goes, from of in. kind normal around gross people levels of As transition inventory happening the do customers was at anything to to kind driving really back done the year, don’t to margin gross and we’re that marketplace I and the of artificially getting in a margin up that think from story margins. Gross in that’s buying really is has selling last in perspective way not being flow wholesale margin that’s rationalizing some discounting just because so far

into it the reserving of as sale the so, want where we and normal on so. But that $XX last -- I as function side. what at pay in that really are lot off that can get the kind there’s the the going course. we’re probably QX us we front. half, they some plenty to further of on start inventories should pay ideally a again, year, probably, get really of So the But and to kind debt now ourselves margin A million I of really I on we’re where liquidity. of around down. getting far into it’s on basis. codes pressure on think, back would we sitting get so was for something said, that I into QX get step of year, moment feel more position, next what guided the as assessing of very we you go-forward in of we But coming gross into And we’re obsolescence a closely, debt the because it see stride next be expect we next a be margin year good before and margin or we really we taking goes, first -- to in managing fully to starting to do, aggressive zip lot a year be sometime stances manage will we then on right and Speck Reza obviously will really will decide

Okay. Hello?

Louise Li

Thank you. lot. Thanks a

Kyle Gendreau

Great. Thanks. Okay.

William Yue

dialing call very the much, to the Thanks time. if usual, Kyle again to in. Thank for questions, this point I feel you and the us. today. for reach for good to out Reza have everyone, joining free and is as Thank further presentation. for call. very you Reza again, think a you And much, your And Kyle any Thanks Great. us for conclude

Kyle Gendreau

everyone. joining. Thanks, for Okay. Thanks

Reza Taleghani

Thank you.

Kyle Gendreau

Bye-bye.

Operator

you Thank you. the concludes conference. for Thank participation. This

Samsonite International (SMSOF) 18 Aug 212021 Q2 Earnings call transcript