Samsonite Expects 2012 Asia Sales to Grow Slower Than Last Year
Samsonite International SA (1910)’s sales in Asia, its largest market, will increase 15-20 percent this year, slowing from 43 percent growth in 2011, Chairman and Chief Executive Officer Tim Parker said.
Sales in Europe and the U.S. at the world’s largest branded-luggage maker will see “upper single-digit” growth in 2012 as the European economies show signs of recovery, Parker said in an interview in Hong Kong today.
Economic growth in China and India, Samsonite’s two largest markets in Asia, slowed last year and this may continue in 2012. Chinese Premier Wen Jiabao set a 2012 economic growth target of 7.5 percent on March 5, lower than an 8 percent goal in place since 2005. India’s government predicts growth may rise 6.9 percent in the fiscal year to March, compared with 8.4 percent in the previous one. Still, Parker said Asia demand will become a bigger part of the company’s business in the coming years.
“There is a huge demand for our products” in Asia because of the increasing number of travelers, Parker said. “China is growing really fast,” he said. “People are getting disposal income. They want to travel.”
Samsonite shares have gained 15 percent in Hong Kong this year compared with a 13 percent advance in the benchmark Hang Seng Index. The stock dropped as much as 2.8 percent today before trading 0.9 percent lower at HK$14 as of the midday break. This compares with its IPO price of HK$14.50 a share in June when Samsonite raised about HK$9.73 billion ($1.25 billion).
Profit Beats Estimates
The maker of backpacks, luggage and travel gear today reported 2011 net income of $86.75 million, beating the mean estimate of $76.6 million from three analysts surveyed by Bloomberg News and ahead of the $64.2 million forecast in the company’s June prospectus.
Asia accounted for 37 percent of group sales of $1.57 billion last year, Samsonite said in a statement to Hong Kong’s stock exchange.
Spain and Italy have “flat” sales and are the biggest challenges in Europe for the Massachusetts-based company, Parker said last month. Most economies in Europe have begun to show evidence of recovery in recent months, he said today.
“What’s encouraging from our perspective is that people in the States are traveling more,” he said, while “if you look at some of the European economies people are under a lot of pressure, but they don’t want to give up their holidays.”
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