SMSOF - Earnings call transcript Q4 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 Annual 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, ladies join the to for and call tonight. gentlemen the taking time Thank

We to us as a our start are as Mr. few CFO, Gendreau pleased with, you Reza have opening our remarks. Taleghani very will with Gendreau tonight. Thank to Kyle And have CEO, much. well

Kyle Gendreau

Thanks everyone William. Thanks, joining us. Okay. for

numbers. are to excited be We reporting some really good

Page tremendous ‘XX. a So, note and on have ‘XX I do into step on high momentum ended we we really as X. am we

Our through quarter cover challenges played they with out into a – of strong what clearly which results, in we of were would. way our We good the the stepped much are we second I’ll start that last evidence saying working. year efforts is with the really ‘XX thought In momentum. of through the have real the pandemic to line navigate business at

market as positioned are continues will margin operating years the grow really fundamentally well stronger ahead. share We the recover and in a we to to business have

we do expect what and our by we travel seeing. and region of seen travel, all the down, a its we Really, moderating cover really off on wane bit of seeing are restrictions, back effectiveness are countries of as to across of regions. recovery effects have continued including the we’ll COVID-XX we start So, vaccines in just

are in ordered shipping stock are as replenishment that and can delays, play demand by investing Europe and step ending and aware lean our you goods we and the and but driven some are has of And position coming QX. strong particularly imagine for challenges into America. all working we more we we out are in We seeing year capital are fully a America Latin on products, as really with in North well and we inventory are

our end to the reduced of position, $XXX net ‘XX. dramatically have compared XXXX We debt million at

generating cash. meaningful are We

cash the half the strong that cash in this generated QX, flow. second tremendous In cover QX, we second. flow generated of You of generated is I’ll year, cash. the saw in a for million we $XXX business And

really quite the right so perspective. there are products business flow categories, done and well And have And the set travel on diverse platform, the footing back amazing a we we excited we complementary And are brands, have recover. of really continues benefit cash leading on to global with what to we get we region product this positioned which preferences. each tailor to as

that’s And so you. some for really tone to set

Page indication with On a thought QX we real start are give excited. I quite X, I’d are to good We of where trending.

sales our adjusting XX% improved So, That’s out. to QX Speck XXXX. down to

in kind the ‘XX. you That’s of down from QX. So, improvement up have versus underlying XX%

you see can improvement a from So, QX. really meaningful

that’s XX.X% Our gross year XX%. XX.X%, gross to QX from continued in margin, and strong very QX XX.X% and has in QX, of was last was XX.X% QX, improve, margin all

we So gross margin as to presentation the will headwinds in the well. our despite we back that historic levels have cover moved effectively

EBITDA, adjusted EBITDA we I So in QX, up QX. are that’s happy We million there. had $XX of quite $XXX tremendous am where from with in million

XX.X% in EBITDA margin QX. at Our adjusted is

I’ll seeing kind adjusted If this of okay, a net the you cover results, year and QX income net is adjusted in important. is the of million income, that’s the moving are margin disruption. the been full of year, we adjusted a business have end This second. net remember navigating positive clearly are for half for $XXX the income, business in talking teens that we in profile at real QX and Positive travel upper and up the at we and about half of into mid QX.

products. on inventory But that’s in that’s now is for our QX, a million some QX. $XXX working strong accomplishment. of $XXX that from of think huge up million capital in I demand cash Generated and

For flow XXXX. at cash million end of this the of $XXX the half, generated business

can significant you imagine. have liquidity, as We

$X.X up QX. billion that’s of have of the So, we from million liquidity, $X.X of at liquidity end

mode just just we to XXXX. liquidity for as On exit year So, a Page perspective, X, full we are a give a sense. in generating you

I’ll So had the little and driven really and an really XX% just domestic XX.X% vaccination sales talked travel second open go, That’s a as about half. in to accelerated recovery that and but in over starting seen increased starting moving continue the a international and rise. the increase to you marked $X in travel to slide XXXX, billion. travel we show billion, have step in up versus levels a of of We to ‘XX saw $X from we more with down year prior and we recovery rates really international a see, restrictions, up of it’s second, plenty vaccination by an

million second first our so sales the And half the to compared half by increased $XXX year. of

billion $X.X are up through margin you Gross just XX%, XXXX at shy – So, a height profit really in the from pickup of see just the the as dramatically XX.X% to of in second of for full the in year, XX% can that’s increased but shy half of levels sales. navigating sales, historic XXXX. meaningful pandemic we

margin. or teams appreciative X%. and us, EBITDA I started the target a I XX% with year, really in to set we full our get I what for by that EBITDA EBITDA adjusted to with which year. were think for we think $XXX margin Our to And highly expecting am at line team, this When for came adjusted had the year, was really a of achievement the the and achieve I everything remarkable million

adjusted compared X of underscores the over actions decisions the really impacts positive million and to – the Our our $XXX that this little of business it XXX and made members get all the years a over improved to position. XXXX team EBITDA by last

results a half $XX of XX.X% $XXX year, in measure, this think was the of margin because of half the up important compared EBITDA strong really okay. margin, first second but was to the I second a QX million an EBITDA an is million half to of loss

$XXX So profile this place. profit into isn’t to you the we rates – year, see I generation right it last would in of think generated say, actions off can vaccination scale, have XXXX. that year. I than move the higher and the would dramatic the benefits of generation which really the taken And delivered for full number, of improvement actions. flow the And in the XXXX, very income we number, for I for net from last business kind as all just was for ‘XX the of positive normal half we a what in that’s positive year, be, important our full year an $XXX cash an said, second cash full And it’s the adjusted income, million, but year was The XX% biggest of the down net year. million strong cash again,

really So slides, we cover are really but will we I recovery. a in for are wonderful And perspective. position a few then the a from cash ready generation

continued new We develop products. launch have to and

We are continuing to evolve our products.

We prioritize sustainability. continue to

amount and I So, with that, before we our am talked have driving I’ll we X, on of tremendous really revenue well. adjusted attributes that I Revenue, responsible cover finish about meetings are have and which trend. products and launching as really about journey, sustainable and continued past excited the a EBITDA Slide we in

you the we obviously in the the kind start of and middle kind can positive how the see year. QX. quarter captures which second the fast are where impacts, then QX chart the this the this started but adjust ‘XX, time a sales of is page, our in we and think can to dollars pandemic of of EBITDA quickly get mean, see I the how to we of to improvement negative exiting by are year. point we I the rapid that to the dropped seeing you And

scale, ‘XX, million it’s but of million $XXX million just not plenty page of XX.X%, less for recovery Just sales, scale EBITDA, QX $XXX of the for go. and to still $XXX perfectly, on sales,

same get the We this pandemic position allow of XX%. we margin back place are generating in an really fundamentally of where we this today. us and to better work EBITDA to million and And profit have of really done and EBITDA, business through through the navigate the $XXX profile close are a off is the to

as spot. different a we are ‘XX and give are So way. regions can I all to because thought we achieved a tell, into how seeing have are we regions strong X, stepping trending places. color, in excited What are at positive you Slide with some we what On now you really in are are clearly

Some are a little ahead of others.

the impact challenges experiencing upper mid trending of continued and you America, from just And probably shipping be our can so North if a see in kind look And biggest to QX. sense look U.S. QX in goods improvement. And so you of some getting in. the at to down, teens of somewhere America you year, of we in is particularly North the the to give QX improvement rapid to this sales

tell would are sales. some we you I So missing

So, be full even the year. of inventory these numbers would we stock in if were better as stepped we into

in which talked down is Europe it’s from encouraged you for saw last XXs, it move of we have middle to of Asia the trend taking QX we it’s a in started QX recovery the in to this a a Asia, little to with QX. I for the really sense pole, And I to as of with like longer we continuing the a what have quite recover. improvement quickly year, just long what very And in mid quarters am we recover encouraged so continue but Asia QX. looks will ‘XX. trending as through But about QX, year. and seen give expect two

down QX. to looks So QX mid-XXs, in a you XX% down down And can XX%, to low from be of in see XX% down QX QX. XX%,

direction. to have the really Latin right rapid we a continues America. trending in be recovery this then in So, had And

in ‘XX, the XX% and there Chile almost in of breakeven was Latin up America, in X% QX QX the was but we levels ‘XX. year. of which to half are as to unrest exit some So year, first was down the high

Latin step the little growth bit for we inflated. close rate is breakeven a But as versus ‘XX into So, number QX, America. to

profile Latin America and as strong So profit really change really for well. amazing

world demand the continue chart travel, its on the will the the products restrictions effectiveness move vaccines where the the a we – an world talks me, increased ability the slide next can for for is you we can to the to sense really which is as considering to move my trends on And and we high off demand of in see give where And see a about moderate as to our travel. starting and And for you which So, and rates, forward, continue really for in levels. see, considering trends vaccination you vaccination side, recovery. continue. and view, are to the will

we clearly really benefits countries vaccination to regions And and high the starting in so levels, to we seeing are are gotten where move. things have

have the a and I and slide before – obviously really on a We Ukraine, been because I in this situation. will has end crisis emotional challenging

added have Ukraine outlook. And ‘XX our in to business and both as Russia know. some We uncertainty it’s you

where X headwinds Just years. we we in of our of be there Ukraine are to we sense businesses from think you the our are the headwinds. over sales, last now, of a give Russian are some about really not But a European and for X.X% X% that additional will as those our to collectively business. rest And do size, seeing

this bit talk well. Ukraine so little COVID this continue recovery are looking headwinds hopeful really at that you just are section closely. And will that and just the continuing as travel by recovery we watch very domestic in red really the seeing my top. world February, in above of the the seen the disrupt are driven at started trending Page doing levels the downs, we we end some timeframe, levels about amazing has a slide from as travel, see. our see, uncertainty get you the a at Russia to of of to we the materially can the travel. the is saw domestic in lot is of And by And ups On line in because I really really and markets vaccinated, are kind the in being which – Russia this what will are have ongoing that levels. of created really we March if vaccination variants. And before, us here, to to There got travel, I a numbers and and recovered this drew closely And of some not we really, in ‘XX and improvement line international will improvement XX, to this to kind levels rapid was I

dip. Delta Markets Omicron, When that a Delta itself of we’ve seeing Those restrictions. we to like as China, You little can where At year, get little see in a we with some more close are we to all a time in Omicron bit dip. the maybe and to intense start travel of and domestic then talked, kind blips March. to to are But travel. came, bit very correct starting this start see the seen shift but had the down kind last lockdowns travel a of of really And all, level international has getting this the XX% started big up. in to the normal. continuing QX, that’s of kind open we domestic reached to but from causing improve, of

to for And traveling Reza been so scale, our around markets. and just have I

times, Asia to been have We a few a times. few Europe

all our week last We team. are in of America Latin with Chile

restrictions as plenty you to see get to and I really but think continues QX move, again, And will into And open fuel this international seeing to as so we travel. come continue vaccinations of go. you recovery continue are to to QX and to start up. And recoveries start improve off, that our QX, as will traffic international still

XX% we this are we is seeing. a a XX. overall generally kind do think you go think we ‘XX so data my give I with sat for the to Page be get are trend just a baseline levels our as think ‘XX if demand recovery world around And us, But the where and for us the use really would clearly is obviously this of end page, perspective? line reality but the might on recovery, takeaway expect. is slightly the There we source of watching the with And about closely I is this same. about are will is up – trends global And year. outlooks outlook from because up. we scenarios I is is there that outlook you moving excited as better This our to And have is than travel. would the of to middle, the this I

be to we as we will think historic getting I very exit ‘XX, into levels. close

Our in from full to XX% year normal. down be is ‘XX to sales XX% for expectation around

a into would sales historic recovery business, bullish are close do levels X. are few think step to things show a right margin, back. way back all where moment as some this of But from to domestic are, historic gross travel think sense really On we So our we for we a said both before, the we not doorstep the ‘XX, on where that so we trending, that I the I I in of the on a half, think give Page in gets are XX, I you own we perspective. Page just get starts but have it to have on as levels

You we can again, that XXXX. in mean, see the XX%. journey at I exited had ‘XX we

at ‘XX headwinds. exiting are levels meaningful We ways many historic against in some

pressures we have we inflationary board. there that pressures. So across have are know, new inflationary Inflation, the as you headwinds seen,

all costs dramatic and pieces that. seen have increases duty freight real the and in of We

had a there not the be will It’s been program yet. have We We that renew GST in think treatment. U.S. retroactive We renewed think will ‘XX. in

but So that also promotion levels. margins as increases to, quite of needed profile price pressure get managing levels expect back And us. to we with pressures, you will the really historic with for on cover against in demand, product historic have we discounts these on lower costs the have helpful be would to margin moving all to and where back to been

our we to are through navigated off have with I are our we say working are This of that supplier excited this. would strong are. matter is And team the we navigating relationships we myself really back margins I as where suppliers. really back so and closely that And

we of plenty in have will do But the ‘XX, We are start here work them clearly ‘XX. in to to this. right keep of

We are XX%. with at we where are trending in ‘XX right line exiting around

real and of be I sourcing manage think control, this So, supply on teams through. in another will but are we well to year challenge

in dramatic margin. increase So,

arrivals. We shipping the impacting it’s timing seeing delays in of are and product

we We really almost say, managing products to And for with across for dramatically out our business. each it’s thing. help through regions, are of which the to a flow ability function of margin us XX average, ordered X the out on will the ordered with would shipping I quite months one delays.

factory some today in seeing because right China are challenges Omicron. now We of

on So, we really will forward you sourcing, don’t can by right we take some all some but us, like will you’ve the moving but the and those and to moving progression lockdowns our see impact all teams direction. the constraints, we on managed within action. of might kind are closures China. has impacts be news, continue to seen in seeing well shipping in some our impact short-term and And think That just

for We are gross the laser-focused at It on matters margin historic levels. managing us.

increased and are have effect we on factoring place. of cost, to the labor raw we will so will our that working team And suppliers our all materials, material be and in is with at prices oil we are sure make watching up, that right margin costs, a higher there manage lag

page. – taken the and next here flow. also the actions another the we deliver at think just that to is up it’s to Moving margin cash move on clearly And look EBITDA, I key and page, show generation flow EBITDA cash but really have cash in takeaway this

so in cost the business. actions the you took as of And we know, really structure ‘XX, adjust aggressive to

carrying We us. which million had ‘XX, savings annual savings helped over have We in in $XXX cost in. fixed we are have that temporary

achieve this QX. will but at will to of of We end falloff, us we really the that’s savings. the margin to plus strong million are seeing EBITDA some of $XXX but those fixed ‘XX, carry not start lose into allowed they And

XX% QX. in still sales close So, to down

EBITDA. an million carry historic on will Meaningful sure. into generating actions cash margin flow. and ‘XX, levels of EBITDA at for are $XXX That We

So the ‘XX know, generation the as in mean, – of all business. and you up showed the in we rains grabbed and ‘XX I cash in really that ‘XX,

And strong so XXXX. liquidity were in position, in the we earlier, in where full we year, cash really we hundred $X.X QX, this are for million And from a $XXX million, QX. generated we and even than million, of dollars I did more said up couple in

in is tremendously XX% to the I we in are strong, to will overall position. North on being brands, year the Samsonite some back almost trend brand paces XX% all of that well. recovery versus only that So kind seen around are, we slightly XXXX you look section with our balance of the Brand net kind look up down perspective, XX%. of or to strong very and at recovery America, can Tumi Reza in where is sheet debt well if of And cover Tumi, held trajectory and From bit of business. our ‘XX, some up sheet our are seeing balance a as moving you we XX%, if last so you inventory. at line see ‘XX by others. was across control continues a which But are than different have at versus last up XX% and year down

few American well right other business. in noise, includes roughly a last transition to flat perform XX%, And number a Gregory line, that’s for a shipping is down delays with America perspective, has brands line to that, Speck trending year continuing points some you this that bit, U.S. us with very within XX% in strong exiting really From but even in just continuing product the are here. why tourists momentum Speck, with within other perform other overall this a touch us. holding do Brand back year, and like largely So, Tumi. just well the which but last up North to to but With brands is that’s clearly to a see

continued to have We innovate.

We to develop continued exciting products. have

I products to continues products. are get We year. grabbed end so see tell are a demand you, starting launching of few we ready of pieces to to we travel would And just really as these of some recover. to capture the the I as

what active taken the have assortment in last an SKU This there reduction of offering. we XX a the very is quite process, is are we over business Just months. against

right which So that chose count, page. successful basically. with made launching of SKU amazing now Recyclex we fabric really reduced recycled as of Ecodiver, a recycled is interior product of assortment technology. or XXX% water dramatically product that’s we I incorporate can our in This products Paradiver, with exterior the fallout you which recycled bottles tremendously the see to has been really but out and is materials. this PET is material a are still This

bag a really collection, It’s with beautiful are year. a to very wheel. suspension the It’s some of full recycled. indication is which as just the and we of has material get a real recycled into amazing the all that the though back component commercial past it incorporates really is waterproof I travel tremendous an half we this got out inside might launching fabrics. It’s on minter what which launching So, product material the stepping of and components. our collection, product. is There a product interior say, again, non-travel And on,

can the U.S., have You in Elevation Plus. we see

the team. interior incorporating for collection and Samsonite of many bags CTS convertible that the extension ongoing we U.S. features. that this materials, eBags best have U.S. really the our products. it’s playing collections are customers through the XXX% even both of excited launched story utilize of exterior like with recycled one the the polypropylene really here, like and which and and the quite really interior in we this is to eBags, out brands the features, an see really launching of interesting in allowed like We have with market. design Again, amazing team eBags eBags, product aligning launching And of This kind to about eBags excited getting from recycled are

so and one So, the convertible now of really a terrific carrying even like backpack, these bags exciting is quite really collection.

it’s homerun Tumi. really Bravo start sense from of and innovation a it’s amazing popular, Abrams, real Really a are Tumi a collection right has here, seen a of And the Gracie a innovation. of really product huge relaunched gate what modularity powering again, and launch give add Alpha to out. life of at really, is sustainable, it been And this to exciting. over motion. you to of the launch of just out deliver this Norris much really kind amazingly yet, the to for with continues this the you songwriter, campaign haven’t we Lando this forward and decade what’s So, key it’s it, ‘XX. a It’s following celebrity recycled endorsements got And really we check pieces can so kind product of is the If features exterior the it’s of on one launching, durable made collections for bag. from interior materials. of these to

this as to off ‘XX. we is terrific races and the into is a launch it step So,

in We our journey. have responsible prioritize continued sustainability to

to We our the journey. are responsible off reacting. all do across the ability And have within industry this our of of taking this aspects tons think energy really we consumers the transform I business of and are

little are products. testing snippet, Just of circularity kind one we of the

in and This successful. tested turn-in effectively those the So were the to XXX take Netherlands, going in turned and we partners and we recycle offering with are our in. tremendously a customers was launch, disassemble Belgium voucher where of Pretty year, bags small forward. and bags the to recycle program, end of to at recycling discount use working

doing the our to you of of small about of level give a We sample look are circle full And think just the we products. continue will to here this. to work at

focused As think expand what continue we will innovative products we material. ‘XX, on? about We renewable are using to recycled to

on the we Scope greenhouse emissions are a it going to for to full taking level. To first all gas really the front. our get estimating across You next of are our more increase see meaningful details, this time, X brands into of the

at assessment We business. that climate our we have and to and risk for conducted looking a are continuing the push recommendations business for formal the

develop have we this our anticipated. teams quite and and and was to this of And have use for launches and taking product our now all the we culture work create excited very and teams of we Actually, the one this And our we’re inclusion things footprint how around can the teams business, it have life than organization lifecycle I this and into weeks would and We vision us the survey Gregory sustainability really from our We product me, on expanding do globally. and started ago, the European of a carbon world. impact feedback about did are for the diversity our but our we gathering we of looking conducted cycle really for products interesting We whole on thinking the our development, assessment. at is early us full the higher design are still continue tell structure. in our amazing this have tremendous, diversity, is anybody that of focused in and focused first few results, from we employees. it response is, inclusion think to kind how just

have some is we last continue We the just to you will journey. see I structure organization on as that created And and I think response focused back the to imagine, can wanted whole our highlights. Ukraine. and enhanced here. end concerned. governance things And exciting in are continue we with the deeply crisis on a And page I come you will at as

both really We We Russia weekend challenges the emotional we this have distributors partners week, in and through for of have all and employees, our said, highly Ukraine as or and I through markets in thought either teams in activities suspend families, took our partners, commercial in We focused our Russia. action customers. the this our to impact to our our really been employees, on us.

our we stores. So temporarily have closed

site. e-com have We our closed

expect. advertising of shipments further investment all to Russia stopped and We into both we products have all stopped within you and as would

We we what’s going watch temporarily have as there on. discontinued really all operations

We our for our teams. It’s team. are challenging us. very challenging for with Russian is This close

watch and operations our to continue We continue employees our teams out as and very there the for to well-being of to close suspend stay really well.

have to we I the made as decisions And have on I European so this And spent a we teams of continue work. right think ton as our have. time

finished literally it yesterday We have humanitarian donation. large to effort. We made a the

think a this responsibility has I everybody front. on

made UN Relief over thing luggage have million as right and $X we I’m the important, pieces So exactly of do. Fund, XX,XXX bag. to to Agency a saying here Equally donation a and

to bags the moving are We crisis.

with and will I’d we imagine here that impact that can to can be region the the we bags sure You refugee and there. have will say pieces we XX,XXX as This backpacks grow. crisis it are that number bags moving really very higher much have than quickly. And an over excess making

continues on if from it’s we this an our we the quite And Russia And of Europe it just said as and navigate moments It’s impact bit create will of kind in I taken look the many move But I X.X% fronts. a and The in have best sales. will it impact disruption. But we to uncertainties. a should of crisis. recovery. just X% we at dramatically in can. pockets piece think the the helping Ukraine. have watching I what right It our don’t have not to to across might earlier, this through response. years seeing Europe, scale with I will covered X and we excluding the last So, think and carefully reaction the of as reality are I our earlier, is world biggest business. not this some direction. is It we right this

close staying teams. our are We with

to our very and keep And safe. touch family. staying colleagues. with following We interaction staying with with up in are of our I Ukraine. Russian teams both have are are part They where are daily – very we are they closely our in we they partners are

everybody over there. If has participated, the think we years, last team about you been where have our including X members

our reaction. that’s So,

end, where we the there at are maybe on that’s think questions but that. I

so I outlook. with come end to turn with right will back, I the that, at Reza will And and

Reza Taleghani

we Thank you so Page XX. much, Kyle and on are

to story and leading Kyle adjusted million. adjusted of percentage is I margin really EBITDA of progression. on strong the of little billion, just a the over So, numbers, recap net income with the to But gross finished of the Gross half, as year, results are million XX.X%, noted, second a final $X.X billion $X very margin think $XX here quarterly in sales. the of $XXX

you adjusted quarter that breakeven. quarter proud it were XX.X% were So to at QX, $XX.X million. are made and in million We we were looking we EBITDA, QX. $XXX $XX of now in if on QX at very EBITDA by million negative it at QX, we

year this number where like have QX, been not especially which we income but well income, we the for weren’t results out big million same in net the trend cost say a at were have stead. QX, that, bar in and from fully slightly shifting positive coming this is in had profitable. $XX.X we net cuts XXXX, little for start basically had bear a in net but really here a positive income forward QX we that little may while just us is sit as will waiting of as resulting trajectory baked year thing so with that around now in year you a means territory we for, the So, look into basically look And $XXX.X real I X a pretty strong good what number when and territory. We that it profitable pandemic, rolling of of was are the to we mind, million, negative it what

with that very, are happy very we result. So,

to so Going increased by Again, for will quickly of questions. through relatively some time to make prior sales to this go is through XX, it of the the XX.X%. highlights. Page some year I Net just from repetitive, go

were QX from that Adjusted million. a compared if compared shifting the looking quarter have loss that’s by was a sales we of progression. after quarter the We but improvement $XXX at of to by $XXX down are consistent million, various net to got how into EBITDA increased regions QX spread XX% XXXX. XXXX,

advertising that million this negative we have to are and in XXXX we’re And of in year EBITDA have think component as still but of tight of levels, least previous we million quarter positive fixed all having of invest we territory million QX we and on have quarter. lower million about temporary this as was after you $XXX we’re Again, to forward, $XXX continuing we this the that roll improving QX to half quarter-after-quarter at at that than savings in of of cost again, going forward. Obviously, as enter well. at we that I matter we I if are calls, told $XXX line $XXX with on improvement as hope just we savings X.X%, includes year, a is what have fixed SG&A that look the the expenses, are as at guidance well. the in in calls, and went relatively holds of budgets that guidance there through. Fixed some and should then at a and are of investing looking year So, there that’s we’ve sequential back talked Advertising XXXX. historical advertising, as had been spend

page, the million On Kyle that net the of position as improved December. debt to next $XXX mentioned

of total of I sheet that. and We have $X.X million million a the will of slide of repaid $XXX balance I $X.X billion debt. cover on cash equivalents, cash a specifically where have borrowings. We

million where about quarter well of another $XXX of to the $XXX the $XX the credit million of use of spec B, well. So $XXX credit them facility million as revolving term had pay the proceeds million term facility. loan at disposed revolving pay we’ve last down, we down talked and loan this A the of We as

in very strong balance are We position. sheet a

$X.X it’s over of liquidity So is good which as as billion, been.

tremendous as we’ve that dock. due somehow available in And everything that we’re to and inventory quarter We more have when – build largely had the generation. as build Every the team together, to sell we the $XXX fact it under soon well. to net million have revolver comes as expecting working and to gets us some off the get that’s capital cash

continued. has trend that so And

cash So again, invest but generation. that great this try we business there to building February, of But continuing then sit levels. in generation we here January and the is as at as quarter well. we’re stock this trend I enter back say, terms some in CapEx, cash and is of and cash year, as to inventory via will into the looking really of

on Again, the end XX% in Net net this and in XX.X% at almost is $XXX XX. On Page ‘XX, stock an the capital That’s year-end. lower was next million have working driver of inventory capital the working with December the at issue. we last of the delayed efficiency capital working from net year. than replenishment primary of point. Reduction slide, improvement December

inventory end taken So really in the there isn’t channel. that the as And much arrives is consumer customers here, well. by as soon it as it and

get and to recovery into that to of selectively stage QX, that is going expect stores starting yet. levels very again, we haven’t is well build But So CapEx. in the which $XX.X have recovery, refurbishing levels. we look a the have for At the happening of very we’ve that in of as year below course inventory the some CapEx XXXX we now are back fact especially we and should some of not we’ve rationalized during we while, some delays CapEx, extraneous been and chain fleet. million, normalized little we’ve been touched making even this was at CapEx on historical still been that that tight, supply trend focused don’t the lot sort that basically sure a

of that that that restructuring course XXXX, brand total XXXX talked happening impairment the During Singapore taken net the as taken restructuring well. also our restructuring to have that And that IFRS previously on then the names had we’ve well That’s do calls, impairments we as to well have of prior – as the $XX up as accounting is just related valuations $XX.X impairment we did general it to charges had. setting we about Due that we in that standards, we And of hub due to in of million. store some of as we charge million. basically have we well years to IP of of some in had reversals our as initiatives some trade development previous basically reverse as as we some some we have did of cost have the assets.

some and here. Page currency in XXXX, into that $XXX not that million, compared America by for I terms Latin of some XX%, year, Kyle and would and the to growth is really, highlighted just the in flows delays. strong region North month, by Going that mentioned North contributing those on of $XXX QX Asia some North seeing shipping we’re million. America the think point Europe if were is America the the think happening number have at XX. currency probably of progression, really month shy business. for $XXX the we’ve is this it higher of I again, really growth, even But million you’re performance. still important to down delays $XXX numbers, the been All constant America, year Covering million, the it looking constant means

already covered of Kyle the reduction most both cost year America QX XX, we won’t in well, On down go the strain go it’s in of the at strong, this is again, we at trend ended terms look quarterly that to some to that in the page. as and we XXXX. to on really the some regions. as sales countries the the but that strong – bit well summer absolutely QX, As the compared And strong regions, of so X.X%, by due regions, little up the channel each recovery strong due XXXX. with Latin in next improves that, I really ending had, of have but XX% the Asia Europe, as environment down And the under starting a America, in year, to this really as We more of to through mix hope can Latin Page larger continuing in in breakdown coming XX.X%. there. they And lockdowns the compared shifting. Page government XX, primarily other the

the thinking the retail. in and at compared We you’re shift of sitting if towards do open we now QX, back have are compared about fully are and fleet QX of wholesale end our now. were we seeing stores Obviously, we a year where to

retail back looking stores overall from the shift year. course different buckets, – picked growth on e-commerce it’s but in have is but will the the the really, So up – half that of you really the see all channels, still the significantly at percent over towards between the split the just when year, of the of there you’re

obviously, fleet to million has the our there brick-and-mortar the to travel, travel then bit channels, other nexus to so course. retail each and been a you’re would wholesale in of So with then sales but the delivering terms a anticipate, again, looking greater if those e-commerce at $XX.X more improvement DTC exactly non-travel mix little starting the you retail And mix million, is an in products. shift of $XXX as over $X,XXX.X shift and at

be and So do open the up performing, locked we for have revenge as this if been terms of non-travel. a to going terms started in at are is going looking markets into travel the after there and people summer more are couple compared expect products of even backpack we to that in you’re that that in years, see of travel performing the to SKUs already

of fixed you in we we This it. Page we XXXX to also there cost variable that very it are our But than proud to highlight SG&A could QX QX $XXX every also had we the is component is just the the ended number. Overall, if of if of in specifically, lower at million were on trend. I’m Obviously, the look improvement, And what course looking if is story quarter, that Moving are at still of terms as something benefits we’ve some I XX. – year. single $XX over The relates the better focus we of terms SG&A. base. million at it

increase, cost with number. sales. commensurate But variable expect We that to obviously fixed

And that get making cost through at. into that. concentrating we fully the Yes, that we’re this But are etcetera. And historical to to half we’re to expect fixed the to everything look the those fleet, trying levels. EBITDA year, structure. may years, on back go selected that the do very, in we selectively entering course relates stores terms above some we the back fleet to coming cost over our look we we additional be – percentage, that that into that we if maintaining which it are come as of maintain sure So the even will so of benefit improving will disciplined advertising, disciplined actually at over very the that’s admin, trying will on very the the year, process you stores well overall, of margin. about there And and that

advertising we’re we to if back as get like as be thinking would low So Xs, to the a that’s can of high in back of half if about terms it Xs, we maybe percentage year, even where of this sales.

at pressures job that XX. have customers the covered increases margin inflationary of some in gross in remarkable come that what make teams Looking on by maintain disciplined, we done we terms whatever at terms end Page Kyle sure offsets improvement that having making looking we’re very remarks, our very a price, of promotional the in well passing deferring face. it sure his to The as that have in that we’ve limited the costs price of activity as to had.

that’s adjusted the $XXX And margin, of million the gross the that, our from to we increase profit the as impact over gross was profit do of So bridge the improvement the then EBITDA. million. higher from $XXX

fixed large doing course is SG&A. improving been business what component the the it in margin over as profile year. of gross benefit the a sales the our we’ve to of as of So the relation obviously, on And of well

$XX overall. roughly some So that we of decreased fixed million, pressures the that other felt SG&A offset of

gross repeating million business. $XXX again $XXX generation, of terms in are XX, sales our as Page and cash in generation of and million the on proud million of quarter it QX, QX. just this generated of cash top alone. when in the bears $XXX That’s $XXX million, very discipline SG&A. we is well about around back from to On negative So margin on EBITDA largely basically going of as the adjusted improved

helped of we’re disciplined Again, you, cash as QX. If already, February, you reinvested at hasn’t terms that’s terms and think and $X well. than about we We even are, the us billion in being think can having of levels SKU QX $X.X of very this sitting we’re that about yet compared sales to cash inventory yet. did XXXX. results level in in billion, are do reduction, more where January But generating some we expect seen tell as I in the business reversed here we

these won’t Slide be there’ll we’ve really, both again, I XX, the Slide inventory sequentially too be points to out I net year. but of generates open the issues it, as we generation Kyle note. So really But of some won’t and start sort some covered like sheet with so on well the – that. as has that think build over strong levels. debt the flow that highlight of same as this chain the course supply soon at now, expect do up, the enjoyed improved one, spend for On to is has to point. let of comes point A couple the just of on cash that On really XX. I’d cash time balance me EBITDA much as

looking we the over of of So ended with pandemic at December increased if by $XXX $X.X course here, of net the you’re the That debt debt billion. columns million. XXXX net

page. billion of on net the So $X.X that’s billion between difference the $X.XXX you the that see debt the and

we Over million. by year, of the reduced $XXX that course this

So billion. debt with of net we’re ending position $X.XXX a

shy going if Which just a we’re what impact on of de-levering about If hyper debt been we’ve business. add net I result. obviously, you those months. we’ve I in focused – this in through, very, very think XX two that’s sales think together, XX is $XXX numbers So gone of And the months, our strong million.

So to happen. as cash this continues generation

this proceeds cash the the to We’re going repaying that you’ve applying this year. to debt. seen continue debt, went over with and of to is Speck, repaying that generation And course

at capital, definitely a The almost Page we’re line we covered looking have XXXX. for a days are, On bit de-levering a working where if were is inventory I’m where XX, in of this. with in fair So us. strong we focus we

of used inventory XX that which XXX almost days, the is we compared the to So as at have same XXXX. capital level XXXX, are working XXX Net in in XX days end of to XXXX.

here truly exemplary managing of And job done sheet teams the management, and the I So balance of think this we this sheet terms balance again, have beginning as sit truly, in working think in capital. trend a Page And terms XX, the at I the of year, sales environment again, is as things. continuing December, Inventory December XXXX than been on decreased well. year-over-year. very disciplined. the Inventory days $XXX despite XX at end CapEx, by million lower turnover just we’ve on of of

X CapEx for both following would the If XXXX at $XX the time, get XXXX at really CapEx us been $XX million, business million now. starting been the is to you and you million have of for years to most you you’re those in just right some full year, We’ve why $XXX for look be now normalized number the running – around and into of a recovery. in That’s etcetera. we

will, up business about back, that make pick flexibility. will sure You we past. that we what dial But we’re the we number which to our making because to see we have And the want in good in again business. up investments is right do if need the thing we’ve is this done

outlook, with So up that, will Kyle turn then to for the I’ll we over to about talk it it open questions. and

Kyle Gendreau

Okay. Reza. Great. Thanks,

seen step said, we So our and as in what results of back ‘XX. the half really strong start, to and as ‘XX we’ve I into ‘XX

step had into this great, for ‘XX. into and as year I our think step share, a of both kind we profit fundamentally to impact have we clear in profit have as market profile, in recovery, cash momentum ‘XX, business, operating gain generation, that great actions we meaningful And clearly, higher positioning. our

caution, We are ‘XX in are seeing a COVID cases. – seeing we just ways of new

of But as Omicron I I travel on think strained. closely. to under woods will the markets last the continue, of be the BAX. to So we is continue propensity through the couple latest the to not that we’re as we is saw continue what’s in days me the COVID recovery start, that some that Which, clear again, and Omicron think, kind will see we and And here. to news

QX positioned looks said impacts a a as We that. will business. uncertainty ‘XX, in we’re into think recovery we’re And I of recovery again, momentum, we’re clearly for think, but well additionally, it, has will about into continue to on degree adds in China through in Ukraine overall play think, I outlook prices And but to talk continuing Ukraine, continue. to despite COVID, the really despite stepping I seeing. I and like have lot stepped some as covered that And I new are think But will our where that to our that well. to lockdowns manage I QX, and we out it’s as us going

dramatically margin degree to we maintaining as I earlier, our focus, the of increases that teams at have across levels. remain through manage those suppliers work with said to at as And promotion we gross pricing and mitigate challenges historic been and globe have all discounting costs, on our increased, a we the that continue closely confidence well really levels. good margin pressures. work our far this, As shipping but the has our And very we cost to our focused gross really, continue to inflationary historical do very maintain to will I with teams have which able levers of been and cost, freight, around

careful. intend do to the spend, we year stepping into increase said, we’re Reza marketing As

we So we’ve where QX and and of at QX that to right recovery up increase. ambition in as here have we’re will ready spending QX the that well. we very we’re were back as start historic as lean I it’s I But stayed this do in to think at pick of moment the particularly And bringing the And about to see end an see the expect recovery, to be as you should do the disciplined we levels. year same levels we at XXXX.

SG&A. see And doing. with because outlook it And disciplined on keep the SG&A and of on that’s said, that. uncertainties that up our you’ll so what guard our we and highly But remain management ongoing, teams our our and fixed are means expense we and

Reza opportunities up you’d making teams core our capture are cost improved Europe will are And make growing. to make there sure against production we’re plant making functions, investments as for we and as as team investments on in new an expect, We’ve are a that We see expanding really our select e-commerce said, started set in really in decisions equipment structure. demand and and disciplined purchase also we in we pushing, to some but to CapEx, started India. we’ve new capacity in

we levels to year, years. expect creep the back the we half are should the but get for And this want and so moving we last as back to here, of be we forward CapEx very year closely said a spend up to but historic from will in X CapEx to very managed tight start

position, really ending a starting driven Latin strong in America, really to things. Demand really inventory We’re two very Europe, in in has the lean Asia. been by pick up U.S.,

so within shipping bringing forward. The selling But And are we’re through in the goods of closely in, seeing our Generally, goods our quickly. we’re are suppliers in also freight. production ordered are so as on recent very capacity. real But we lockdowns constraints far okay. we’re kind China, watching

do sustainability, up that QX. in my and through help inventory, in should that a innovation, organization position. are our in you really we leading we product and to we are forward. I long-term the will orders, some the we team out coupled step be that then pre-COVID teams most function brands, positioned amazing and list, industry. And commitment The have best see – be and in ongoing in rest view, the and of with And our well doubt and some well, into industry. we plus as QX but this said, which will are as the delays. we development the and our months could we of will And our function challenges recovers, this there’ll travel of of in the really really Reza I will X regions, the strengthen way, navigating new chain said, positioned as catch as I As but on should really balance play build across any best it’s And we’re often And we’re team have levels, market control but we and well sheet. really competitors ahead seeing be zero for year. supply of our good

meaningful have We liquidity.

cash. generating We’re

where some need balance sheet forward. started to move go We to net what’s we the reducing debt repay through business navigate And the the debt. We’re sitting as to to recovery. we’re exactly left I think with we on

So with that, William, I’ll I it questions. think we you. can open it up back turn to to

William Yue

Thank Sounds taking And can operator, Kyle good. Great. Reza. you, and questions. we start

Operator

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

Erwan Rambourg

about operating how full the great you can of notably see us Hi, there. just wondering gentlemen, lot bit obviously leverage cash developing, on Congrats, moving year the tell and quite you results, impressive. a on a parts. if I’m

stronger. this you But how would XX% to you implied see think be think trading quarter quarter, far? by that you do below differences of are a I level And you XX% seeing XX% half back year. could so probably the see how the I we that implied

question. So first my that’s

adjusted be price question and prices then you year base? eventually cost oil how are that with margin. about how phenomenal you offsetting last impact think derivatives? how does Second your that pretty with would EBITDA And high-teen increases? And you lastly, a And exited oil do around

mentioned you should margin for type you. this the you Are around still could higher a margin with in for this level XX% you we ‘XX? mid-teen hope year last I QX that comfortable hope for year? time or Thank think

Kyle Gendreau

Great. Thanks, and thanks the compliment. for Erwan, Okay.

can happy pretty with tell. you are as We the numbers

year what So development year, at what the that’s than we’re saw better is full of start we the seeing QX. in a trend slightly

March running So bit improve. you but I Omicron XX% with and we then is February down a will had think, seen in kind where we’re as expect, could a little of of step January stutter we’ve range, be the

QX roughly for I will be trend. sure, exiting of think improve kind down QX, so QX, and That we and XX% And will in really QX.

year where kind And I I’m with am we so start this the be if the slightly to XX% and thinking. XX%, think I in a you somewhere of think will of code about I trend, down where of at think the improving

a recovery QX, with kind kind in of clear move to markets went But as but seeing we on it’s Asia through be levels. aside, as do as start to to need long we constrained. bit then more I I’m to that can those get starting I And You to open. look clearly of Asia markets still it Asia. But and QX, watch And math the QX, get a in regions, a think, said you step-up to will the China we’re the call.

with Our teams Asia. to in are now able travel

lag think I really that’s so of of And effect indicator the good Asia.

strong think I will North a really continue America trend.

travel said, Europe as strong very really And America, think positioned think is I are Latin we a I in summer well. performing trend. we well will have

maybe you if blend all together, cautious that we’re So fairly guys.

we I but there end bit be up. around Could be cautious. Yes, will better? think is that where we us that’s want tad enough to a uncertainty we

watching QX at go, our As that deliver really, historic far And ability prices our in and costs levels line say, trending I across of the margin this, with been all for pressure on the would as board, in right? the oil particularly There level. we’re to ‘XX margins tremendous historic is is and business and gross to in exit manage year. ‘XX right

So the on will everything have quite past And we’re not and remember, tremendous but mix. maybe to costs material impact. are meaningful, you freight component from of it. percentage that It’s pricing. think discussions, I often But along a oil we of its goes labor with our and as the pass be do managing will else well. able

So we will be watching that is that. lag There closely. of a effect

So it takes a bit time. of

other so but ordering of watching will to work pricing, in Erwin, The strong, if come we on forward well, you be I there’ll moments think pretty be through benefit and But will ordered I the we increases the pressures there will because pieces get where our be manage have supplanting were and think on think will think we with itself. offset, I correct will that. shipping the

mid-teens. in Maybe the So high adjusted inflated. like just a as tad like high I it. adjustments, had XX%, the very but some is the that was EBITDA have And it margin, caution confidence navigate – is margin XX% us underlying probably why little full about think I to well. QX that would of allow to high, margin it’s is will way of adjustments bit year, in I blend looks We but little this gross better a that number then well. margin inventory XX.X%. the a more slightly think gross reserve That’s

end So together, blended the QX you year right – which see the in of kind Blend it’s exited of strong is place strong was why that’s XX% indicator, second be. we’ve to code, half use that QX, margin. margin in very the that it all zip XX.X%. of And Erwan, for some if that gross a as you

up well. And quite so it’s

really bit be QX but sales carry volume just this because year. of the we’re numbers lower our through QX, a seeing As in our of strong you know, a QX in

what So year. a for think better, maybe for set and we’re clearly delivers managing. story on that we’re up I we mid-teens tad a disciplined very And the remain

think managing So control to number. that of in I we’re really

Reza Taleghani

Erwan, just color. a and to for points to then couple just add of that

higher thereabouts focused rate which is exactly that freight is But just about like go the either. a important on or worse the give region, Kyle prices. you’re think depending portion of sense directionally it this the the that today it. be point FOB for and America If it. freight far, FOBs, So those the to that that’s North It’s out so we to improved much in so you very very far year, were to but I out X% and fully locked ordered we on. of ordering, so not getting have And business is rate made we’re the that end hasn’t

managed margin well. North all basically is the – that business gross of creases So been and America has remarkably The managed.

passed And so that’s been on.

Kyle Gendreau

our advantage our of this. scale one is to Yes, advantages manage

a our you can in competitors bit of a maybe if spot. tougher imagine So are

matter and is to does in this win our manage numbers. ability scale our showing it’s so in And our where up

Erwan Rambourg

Great. lot Thanks the a best for And luck. color. of

Kyle Gendreau

Erwan. Thanks,

Operator

you. Thank

Thank comes you. of question Louise with Louise. from America. Li Bank next ahead, go Please Our

Louise Li

Thank thank my taking you, management Hi, for you. questions.

although exciting hear latest there So development trend. Actually, seeing improving my are is it’s first we very still trends, question about are so moving many our parts. to that

in see is And second crisis, like first. the So check March, to any negative GP like that impact, in particularly would Ukraine is the markets just the this is don’t we from even on So correct? European margin.

still high the a QX, So, XX.X% with the before even quarters, very level COVID. excluding previous in the compared is one-off inflation

so raw current year in price you second also QX did – this and in the have did to this – chance My pre-COVID? challenges about – between is question hike? in from – China. I is the And So, increasing here between do difference this is we or what do So, materials, we year, OEM also, impact the do if of sorry, think year is second talking my what in we third last question my last we because question. any the to price the related hike key see part a the key incremental mean

So, the shifted from we outside about talking have China. China been OEM to

China. the question So, just check is latest about balance I third would like to percentage My sheet. from our

– mean So, in the you. the do pay continuously considering what to down initiatives? Thank debt upcoming interest cost to is I So, our we quarters? the plan

Kyle Gendreau

one. Reza, the can think I Okay. One sure, last for take

We trends, QX, softer. is really than blip I earlier were said is bit better what QX. a was our a as running and So, than in saw better QX – mean we in running in and January a this bit our I numbers Omicron so saw January

of had with also do timing shipping. to Some of that

in that going we the the at in of it’s low-XXs saw. caught shipping down a which that’s But So, XX% looks is improving like delays blip we carried you into in tell you, kind bit down to the – kind year, March for the was of when January of up January are trend trend XX%, seeing our I And be roughly consider a heavy March, end okay. February. would that with exit Omicron

the of than an said QX. gave our Europe the continues a versus I continues. and of indication other way, And as Europe Russia-Ukraine trend you the I So, trend think maybe even business, trend to have in do in I rest of impact good the

quarter holiday season. think summer trends carries coming think this really the that effectively the travel kind for I So, We were into the do okay. are of into propensity

building we I see a will story So, QX. think in

only and back shipping the Our good I historic are numbers, think will challenges. for be hold our QX us numbers

And better Those of so goods challenges. have we that in the are in shipping coming seeing even through in. in some numbers would of delays back some I for QX about from the been numbers talked that

going I I And will looking business desire the and drive they will navigate propensity marketplace. what these looks to think is out. on continue. and continue travel the some I it So, uncertainties, in just knock And think wood, are see I uncertainties don’t to despite we forward are fine. to trends the like think do are people’s to of there But me, them it able

is comfortable the paint picture I like are we whole what that watch. will today, We very from and to is spillover uncertainties of can because world if things watching see we see whatever. there Ukraine managing, with or we feel that. what But

we for As reason is even far the selling. as very reserves. products had gross And was strong, against, adjusting is reserves because at been put XX.X% we so that high reserves margin the goes, are really the sell-through QX adjust have

get seeing the ton start the done way That’s XX%. teams have year. about And effectively of where right work. are so of think going what roughly work of to That’s margin that. gross you we an comfortably of amazing the forward the benefit But is reversing at amount the the

market. feel taking that team. there against to think clearly We action pricing the off able industry whole we do have we will you effort the should to for But action be But with year impacts. from deliver and know are I will and to watching take Again, the shown are the if do for expect a margin gross of of lot that. how historic ‘XX, we

made as far a of and from have really from As tremendous kind shift phenomenon, is here. progress the we China shift China, U.S.

XX%. I think Yes, went to from – kind something of it it’s for XX% U.S. the XX% like or China. from

taken the But So, it’s really not an U.S. over it’s amazing last and important. journey that few have the that team years. China Moss the here in not is

China to sourcing China, from are still watching closely. within very Europe are from Asia it we We and

is, so kind there And be or those in we our watching the were of affected will more plants lockdowns some of view recently, there. But temporary. shutdowns are

and dealing with and they XX the those over are temporary We back. months are last already come

tremendous have on we but – So made the U.S. progress

that need reversal, have said some in and I turn retro a far GSP carry U.S. off because pressure well us renew this take as sheet, balance on we then so renew are U.S. will our the benefit to on to it expecting business and through I will also business we to allow as well, a As year. earlier, GSP to as sometime will that Reza. And the the of the kind to will as pricing

Reza Taleghani

Yes.

that as generate obviously, So, debt. the sheet, use to is the we balance really repay as cash, of it relates to

been we on levels. good have billion, obviously, looking hyper about really are focused at When that. we We feel liquidity $X.X

there we course you us little to some that about were think I and some a of was Every pocket of take pops So, we that should repay though of time say of so gun-shy expect bit the over that, that the up, year. it. cash uncertainty sort

we over over sense very as it year, liquidity whittle that. it’s I it regularly. billion, for normalized back fair for of course down is of isn’t the other Kyle and we credit So, paid we this the have focus generated us, the will the things. some only to there disciplined that questions acquisitive that. going comes I get – kind up is finish the our something summer up, to repayment been billion relates about, are know and this $X.X there to you time carry with of us has just But the $X.X there of course every is Right of about terms even we and of now, because and levels that it which with the quarter But to a mean think one But I levels be billion, assume discussions to in maintaining $X.X debt makes more negative monitor amount that profile. oftentimes liquidity and cash I do months.

Louise Li

you very much. Thank

more the price incremental see still so raw cost plan quick or we further side a we on just we margin raise if have any do to do the follow-up GP chance? So, material pressure,

Kyle Gendreau

levels. to maintain margin at historic our plan gross We

that year. if it’s directive action combination margins actions, the some by this pricing with to So, a our the to, be But team. might that That’s the need will historical maybe we were maintain we working this really for will benefits what we directed level. and offset other if And at that’s see. will, we we of do suppliers,

a We action. the very where closely to are tools able just to manage get gross kit, And that pricing the it’s we to working I all at not year confidence got historic as we margin level. in a this be have really high to continue the team. will to With

Louise Li

very you Thank much… it. Got

Kyle Gendreau

Thank you.

William Yue

investors very Great. have of And we Thank online. a from you much. couple this point, at questions

on, for The is first more any XXXX? one there are guidance CapEx about concrete

Kyle Gendreau

million are I to range think year, the be in going we $XX William. somewhere full million to the $XX for

it managing are We closely. very

We the are starting start year. cautiously to

made QX, we So, have think in see will will and some year. the back you refits number, the for the store to some commitments but start equipment think we in of lowered I do I half purchases,

the zip up code end we probably $XXX that think $XXX of level. short still million, historic well kind I somewhere will million William, So, in of

William Yue

you. Thank

are to away The cost how second we ‘XX of question, going savings temporary in go did expect? our much

Kyle Gendreau

we real QX can are why which are permanent north we that’s think I we what think, are the back to and focus you the of QX, have half year, as we into little And I I think visibility trickle time a we savings, always off. million, those. bit and of the think cost still But on fall a good the the William. to fixed seeing by get temporary $XXX – little will we

are I think with in well we control those.

that’s think about it. way the to I think

back long, will again off see we to QX reductions wane some will of the wrapping certain little able but towards benefits that the There benefit above will You maybe so up compensation QX. things as they the kind half are largely or that is a of we markets, in year. start of be we like step only into as in start bit SG&A year

William Yue

going at again? paying a looking question, when dividend to The we are Okay. last start

Kyle Gendreau

guys. not Well, probably year, term this that’s question, a longer

this I leverage on year think focused liquidity. will be we

the kind can historic of will get think repositioned, EBITDA levels, to we debt we get think and I I back there. as get we

it while place about So, leverage fully our I the really profile the we chance a very get good I business in think would right think in could like ‘XX, to we recovered. but get

to less business crystal Board think think be clear we might are is get historic a profile, So, ideally that’s would But not the I to of far a of generate right think place back this of the ability I not or think couple be so and if us be generation should don’t consider from slightly our leverage a know but better to to Xx probably I get margin, away, I what is higher cash clear, But kind handful is historic the away with for and for operating I that I footing before move that. the priority than that. able away, think William. we years years cash solid to

William Yue

to And much, very sitting get operator, back line. you let’s Kyle. the in Thank you. callers Thank

Operator

question Thank ahead Wei you. from our Please Dustin. Dustin And next you. Thank Morgan go comes of Stanley.

Dustin Wei

questions. Hey. my taking Thanks for

First regarding GP margin. is the question

because need for you fully ordered your sort for of would a little if by what So, that market or the I think that quarter management inflation just guess could I almost like concerned quarter. on talked the so you XX% and to based projection, you just that aggressively reduce America you the some cost out full promotion to third end the is in increase increasing about will update And the that ASP for ASP, other am provide North the year, X% be. of of finished regions? about

price if sure raise will the get again, affected. demand to am If need your not you I just

that’s question. So, the first

The regarding supply chain. second the question

the the the help? underground could what’s little China. information Just the in would go sort of the challenge will or terms to please supply I sort short provide that still of In the high U.S. is and very more costs a in colors know continue is freight to bad the congestion some cargo, about of still that the port you the chain or of production, like of

much. what U.S. for of whole now, much sourcing factories our for own in is there lastly want this is group guess perspective, still this I And that mid-teens sort India if in year. Europe, like to top and flexibility it. group, China the just to group, account about of about but for case to the EBITDA the uncertainty, margin? I So, from just either whole so how or kind of From sense management you a like Thank for, breakdown has very margin to get terms from how the market, strike SG&A line trying the not the like know much the some in of GP

Reza Taleghani

please Why we don’t I go. start as in off Dustin, Kyle, and chime then

so I just should the So, that missed got know out. anything regions, margin, but point your if our GP most written just other one think there, I North GP about for America of we questions renewal GSP has of I coming customers The you North businesses the basis a thing margin covered is obviously, down, group. the But back, America North a largely that that the lot would for well. XX margin so be of about wholesale if comes as that on ask the impact hold aware GP America.

been is happening. has I regions highlight The when and for specifically, one talk improving lever, price all am that sure make looking what’s would it North business, about there around you I the the if margin driven GP in So America of a the of thing in at that for have that. is overall. price to that just increases country Asia mix we The question is trying compensated very terms

India because largely of the present that fact performing versus of regions, example So, different and the give Because India. India had India the sell shutdown. have versus will that other has is one you mix been and Korea of that a Japan brands profile historically margin I that in we some

starts because are are All which average of a markets that it a margin the GP start of to and you see shift sudden, closed. of to which performing

because, in – the more better normal performing. different a have you get terms improve get are anything, over historical that and different time world that only of back level the only of should opens, the countries you that mix could the in that brands to So more if the

So, over that will help us time.

specifically is were already about increases. of of little a There bit asked through. QX, of certain markets most You in increases not in gone done QX price have but Most, Asia, year. price those all left, if the last

quarter anecdotally that if at year of are of you in has a I every all so And or are if demand. been impact you, you products, into And has luggage. most store there you every travel it’s of not looking zero like about a to our a on and negligible just think tell been again, if will products, piece going buy

on will that’s And take so were only won’t the $XXX, store frankly, expensive, show where a a product, – bag. everything last now point normally available bag most the that consumers they and in is is more take And even there is an because to what’s they environment whatever remember that’s price to available. cost if the $XXX will they buy $XXX inflationary it and shelf available. one what it time And up and consumers a was

price way basically in thinking you that’s the what’s So, saying, are a our to haven’t seen think relationship, long-winded if demand, price we increases, about that gross overall. I helped which demand and great, margin off due to drop is

Kyle Gendreau

port As supply congestion. there look, chain, is it relates to definitely the

are due before So, great news on result. in were get is would and to met to to operation. season in March are America, Initially, is sitting back-to-school ships North recently back-to-school Latin are had We up a them hours the tell that, about of strong actually those results, if getting you February to am in XX thinking that But regions the at still as a delivered get can off, finally back QX, actually start looking end has happen there if most. you, a month. thinking the say port, Angeles would and I because just I especially impacted the whether couldn’t congestion. supposed went the about we backlog year were all shifted have And they you if that Los actually the of The are offload managed which definitely here sales I there. there February that time season. good a all America packs to very nervous to that

least little is into So, the replenishment that right we are things a very is which that now, moving. not But to it, at channel that we in but bit to. much want it still not the problem thankfully, we able is way are do love time just with the really the

As soon customers. as are through basically to and selling it things we arise, delivering the

Reza Taleghani

have come QX. think hopeful – able about I looking that’s have and It’s And and one with replenish am we to is we where and of that. are to are will thinking QX QX half get to the here. be – been upsides a there in think honest going our are of we the moment wholesale to so customers I back we would to replenish you, be probably that Dustin, that we to

because carry just will catches there on a our some will is doing that where moment the into – wholesale So, today really and are it what numbers up upside selling so side. be we through

so it own in XX% to XX% here to on typically do and we factory in India. production, Europe are about our As a of relates production

we So, have three plants. the

there production to various is some to able The we there. can the But are remainder and in so speaking, Hungary India additional have the to capacity boost India. We of lines of we capacity and is have generally we about, for have XX% try talking What ourselves. Asia. plant specifically, we added some be so the about I you tell CapEx that Belgium, then some warehouse additional were increased countries mostly doing

what’s In partners And terms varies you by have on that of we All used. I tell open. the it, honestly, it’s is the will depending it mix of brands. historically same

So, the that even basically, extent was same to extent people production Indonesia, to we that But working earlier have to with. the the Luzi. shifting the from that it’s been are question we

happening necessarily you in right give are so I isn’t trying is, what we will example, China. do as in what’s terms supply And which an to chain in just Tumi now, of given China,

in trying supply factories to – that are to to demand to meet it the order boost have our We we the side. capacity that on have able be source

or obviously, If there us happens, else more one obviously order help they are Indonesia renewal to that’s will end is in, first more are news to example, accommodate kicking the different are to offered in, about within GSP if you looking do is thinking a that countries. do ton And in of is generally countries looking extent being us. producer out but somebody various Thailand, production available, we top is the typically us. they to about lines that capacity The Asia, good were So, available. up are to

little impacts we the good So, industry, demand. that’s news. but production a entire but also less the It us have more so, bit

that’s So, there.

have one You Look, advertising. The also is levers. we SG&A. asked about biggest always

we would were talking If So, have about first are that boosting the some we to now headwinds, advertising. we be that on. thing back

that have but environment are aggressive You don’t the being are seen we in anymore. when that’s we not shy need I think that be, about to we

Kyle Gendreau

think at we I are managing same levels, Dustin. SG&A the

our of aha at in we closely. for think of SG&A I will Reza There not on managing probably delivered to because have big is advertising that. managing don’t But is But have are think teams a year. go I we there closely levers. is the So, start right, one the the

We throttle clearly recovery the forward only happening. will when see we

we So, to able well. that be will discipline as manage with

continue to So we we managed SG&A the – close clearly to manage but and on best. the side, very that have

Dustin Wei

Thank much. you so

Just on to the price follow-up margin, GP the increase.

So, for previously American the you that think for ordered you North I of mentioned full America. the for the year the market, products North

for North the, hits, the guess the inflation even you America. affect probably then wouldn’t So, GP cost margin I

you what’s for other? the well So, order for other region, ahead the do I situation also just wonder

Kyle Gendreau

line, inflation linear least at and partners. Dustin, months nine whole business not there the a for suppliers our if because or is perfectly forward. Yes real It’s

And so manage but helps with it work us them, we that.

good again, – you are side. we in control of on we the well so can made. margin the we And we where I in very And see think are are progression

attention of But sourcing as ahead paying where out I stepped actually of teams There and moment is pieces. this in all have our be, a would a moving ‘XX, have we thought team that my aren’t even working very of I little to we up. geared presentation, We the hard. so said isn’t maybe

our strengths. So, that’s of always been one

historic XX manage deliver. the to moments Probably to turbulent kind levels. And in of most the If are today. we that kind of margins here ability the ZIP take history them the different our in you that’s world the to no back of look the we have code be of company, last XXXX, of we at out kind and where need months, to

I a in degree manage of So, confidence high think our ability that, to I Dustin. have

Dustin Wei

first again, that for months margin company increase reduce we nine unless pretty is is or that’s So, promotion the prices change task need in to the this the year, of GP safe? environment, there fair like retail if probably for a year? to the is And say dramatic much quarter then this that fourth actually, of

Reza Taleghani

there Yes. But just realize is seasonality.

expect trying to mean don’t I the GP margin. historically with is, business look So, what are seasonality QX out, be QX the obviously, yes. margin to the if model the you it GP of

Kyle Gendreau

with Dustin, world what I in a you say is the place today. different agree in but

costs it’s much sorting historic what than more all fluid been We It’s up the out. seen past. shipping That’s levels. have Xx in

am that. you So, we actively But is saying on as have just in I And as it. telling it’s confidence this simple I in our teams level have not very working it what deliver the tremendous to we are bag.

that So paint bag. it. – to this don’t it’s the to just in is but, on got try but work some we have day want There front, every picture I

tremendously not are with pressures a We relationships The suppliers. best closely very, the vacuum. very It’s board. across work them the on have strong. the We

It’s oversimplifies to don’t the – question want are work, you answer but real you an the statement do just work. So, made. give I the we you or to that going just

Dustin Wei

That’s Thank very so hear. to good you Great. much. you. Thank

Operator

today go Jefferies. you. from Ling question final with Thank comes The Please you. Thank ahead. Anne

Anne Ling

Hi. some competitive Thank gaining Kyle you, Maybe with share environment, how the part. I operating in highlights of Could you couple terms market or here. and we on us what different questions are of like is share in current Reza. this areas? like mean A

from XX% the the it’s target the I that and would to – for in add material, sales of freight raw clarify, like Lastly, is all on structure, cost of quarterly related? much Is that of for structure us quarter, quarters, others? that is like about be XXXX? expect just very so the at cost that the XX% the how level. this example, terms Secondly, that of How which to much show to the cost like call, beginning – you XXXX’s you that around will the much. you first year are year you expecting it like mentioned next XX% Thank versus correct down few

Kyle Gendreau

I market opportunities I said presentation. think a From real share we as Okay. in my perspective, have

But if floor imagine So, pressures you the on products to are there, put can clearly and I the specific. have scale out that we on front. are the winning that to tremendous won’t against so get ability

think have to And opportunity we share. gain will I to so continue

year, get share on think I we the the and are of real year as focused and the trick maintain teams our very that. it to gain next and is end into

products. an a and amazing would we are So, matters, see launching of assortment for you much say, to products, we and products as that we against leveraging the scale are company is and launching scale This that new I are won’t innovate with sure. of marketplace continues that that against

really our into gain because really And out next am our to will highly play out think year it’s back the but confident year. that ability see modeled in play are. you really I teams it share today, And half will so of I

As maybe have wll you with detail as probably because that don’t I level want the I follow-up of far there. William cost think structure, we have you

on us you get let back that. to So,

So, front William just of take but for it if have I don’t that me. could me, in you

you I kind one other you in that And but right us. we because front want of don’t question? give I percentages, not So, to of did think it’s just have get arbitrarily can

Anne Ling

Quarterly sales.

Kyle Gendreau

somewhere will And think it the we we guidance again, an QX. full is get to for XX% the said sequentially I so have sales, better. continue quarterly of be to you for gave kind down indication On will XX% year. I

said it is we better step can the be got cautious for there that’s tailwind, have bit XX%, can In with I of that. are opportunity. better than knowing real think guys. to everything we as an have math, I bit improving earlier, think January, the as with somewhere a range and do clarify, Omicron. bit a it’s that year, a be you If stutter XX%. we said little full us, for for have We trend. would QX, that around QX than But QX, And just a a I the in down I saw I with XX%, But what

So, into sure. March an for we are improving seeing trend

but QX. I will the QX, I see probably you very the because again, better an let math. you ‘XX into is map of way QX will historic a improving trend, – out and a step better better kind a to levels think I getting clearly So close will would do And I think it

get I have would that And I to numbers the ability we will think seeing – uncertainty everything see. we how should think that our that around teams range, but out. enough But so in indicate be to too. There are is and world and it we the plays the

Anne Ling

Okay. Thank you.

Kyle Gendreau

Thank you. Good.

So William, thank you.

I other are to go? ready questions any think

William Yue

for today. you I you, Thank Kyle everyone, Thank the for for Reza, very presentation. think it much, be and call. doing the will joining that

Kyle Gendreau

Great. it, everybody. Appreciate

Reza Taleghani

always. as you, Thank

Kyle Gendreau

Have night a Thank a day. you. Bye-bye. great or

Operator

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

Samsonite International (SMSOF) 16 Mar 222021 Q4 Earnings call transcript