Samsonite International S.A.

Thank you for taking the time to join Samsonite's First Quarter 2025 Results Presentation. We have our CEO, Kyle Gendreau; and our CFO, Reza Taleghani with us today.

And Kyle will begin, will start off with a few comments. Thank you.

Okay. Thanks, William.

Thanks everybody for joining us. I'm assuming you can see the slides.

I'm on Page 5 of our deck. And so, let me start with just what we're seeing.

And what I would say is, we're confidently managing through market uncertainties with agility and focus. And I would say across all of our teams globally, as you'd expect, particular focus in North America.

But everybody's very focused on the backdrop today. We're seeing a macroeconomic environment that's a bit more uncertain, that's not new news to anybody on the call.

And it's risen considerably, I'd say worldwide. And the tariff situation in the U.S.

remains fluid. Basically weekly, we're getting a sense for updates and that is impacting consumer sentiment across our markets.

And our teams again around the world, are managing the business with real agility and focus. Real track record for managing through economic uncertainties in a really strong way.

We have very strong industry dynamics. They continue to remain in place.

So we're seeing softer consumer sentiment. It is affecting our business.

I think it will continue to affect the business in the coming months. But our business, as you know historically correlates really well with travel, which remains a priority for consumer spending and is expected to grow both in the near term this year.

Travel outlook for this year, 4% to 5% growth and long-term still stays in place. Additionally, we have real opportunities as you know, both in the short-term, but particularly in the long-term on non-travel, which we continue to grow.

And that's a market we've been under penetrated, and we continue to have good success there. One of our key strengths is, or our key strengths is ability to navigate challenges.

As you know, we have a strong record of navigating. We navigated through the pandemic really well.

We came out stronger. My expectation is we'll come out stronger on the other side of tariffs.

We really have confidence based off the back of our really consumer centric, iconic leading brands. Real importantly leadership and product innovation and development.

This global platform and scale advantages and nimble sourcing capabilities really allow us to navigate through this really very strongly and with confidence. We have a very strong financial position as you know, and that continues to be super strong.

And we're very focused on driving profitable growth in the business. We main focus on profitable sustainable growth, maintaining cost discipline, and continuing our strategic investments, to drive really long-term strategic growth for the business.

So as a backdrop, I wanted to start with that. We've definitely seen some impact in Q1.

The macroeconomic uncertainties impacted the business, but our sales in many ways, have held up quite well considering. So we're just shy of $800 million of sales in Q1.

That's a decrease of 4.5% to last year. But just for a reminder, last year was a record Q1 for this business, both in sales and profitability.

And our Q1 numbers came in line with what our outlook was, when we were talking about the year end result. We definitely faced the toughest prior year comparison versus last year.

So if you remember, our Q1 last year was quite strong. And so that's off the backdrop of a strong Q1 last year that's impacting us.

Despite the softening consumer sentiment, which has impacted demand, our largest core brands, Samsonite and Tumi, have performed relatively well considering the underlying basis. Tumi down 2%, Samsonite down 2.6%, if I adjust for a larger wholesale customer pulling some orders into Q4.

And American Tourister is down a little bit more, down just shy of 11%. Really off the back of consumer sentiment impacting the value conscious consumer a bit more in wholesale customers.

American Tourister is largely a wholesale brand, buying a bit more cautiously in this space. But you know, a takeaway that Tumi and Samsonite, really down just a few points considering the environment around us, is a testament to the strength of the brand, and the strength of travel that continues in -- as we came into the year.

Gross margins held up fairly well. We're 59.4% for the quarter, down slightly from what we did last year, which was roughly 60%.

And I would tell you it looks steady in Q2. From where we're sitting in Q2, that gross margin continues to look very steady.

Our Q1 combined SG&A, or distribution and G&A expense was flat to Q1 of 2024, despite opening 64 net new stores in that comparable period. And so when you look at our combined cost management, to be able to manage cost flat against the business that continues to invest in growth, is a really solid testament to our ability to manage expense.

As a percent of sales, obviously it's increased a bit. That's just off of a slightly lower sales number.

And our Q1 adjusted EBITDA $128 million. An EBITDA margin of 16% down off of a record Q1 of 2024, but again really managed well.

Being impacted by a little bit lower sales and a slight decrease in gross margin, with cost really well maintained. A view by region just to give you a sense, and I think what I would label here, and I'll give you a little bit of a look into Q2 here, as we're talking through.

But the business really, is sitting in a very steady, or stable position. Our Q1 numbers for Asia down 7% very similar to what we saw for Q2.

We're seeing a slight improvement into Q2 of this year for Asia, and I want to remind you that Q1 for Asia last year was a record number with growth just shy of 8%, and an all-time high for us. So when you balance that in and considering some of the economic, or the consumer sentiment, I think that's a good result.

And again slightly improving to steady for Q2. Our North America business was down 8% for Q1, a market that you would have expected.

Consumer sentiment have some impact. If I adjust for the wholesale customer that pulled into Q4, that number is down around 5%, and I would tell you steady going into Q2.

And if you think about the tariff noise really kicking into April, and having a steady view on Q2 for North America, I think it's a positive statement. We'll cover that a bit more in a second.

Europe's been very strong. Europe growth in Q1, 4.4% looks steady for Q2.

Again, we'll be in a growth position for Europe in Q2, and has been performing really well in many ways. It's a market when you think about the diversification of our business geographically, it's a market that I think will benefit from what is ongoing travel demand that I think Europe, will have a good year on that front.

And then Latin America was flat in Q1 for us. Our normal trend for Latin America is double-digit growth.

We're seeing double-digit growth in Q2. Flat Q1, was really around a back-to-school softness.

And in that market, particularly in Chile, a bit into Mexico as well has a very strong back-to-school season that was a bit flat year-over-year, which drove the Q1 number. Just a bit more on Page 8, a bit more color on regions and I covered a lot of this already, but if I could just walk through it.

So again, Asia down 7% in Q1, really off this record Q1 of last year. If you remember we had a China in Q1 last year was up 20 something percent, and overall was up quite strong versus the previous year.

We've seen a very good improving trend in India. So as you recall from last year, we saw India under some pressure.

India for Q1 has positive growth 2.6%. Q2 is looking good for India as well.

And just as a benchmark, it was down 26% in Q4. So a lot of the initiatives that we put in place in India, are really carrying out quite well.

And we're seeing a shifting trend in our India business in a positive way. Certain markets were soft in Asia, particularly South Korea, which was down 18%.

Really off the back of a lot of the political instability in that market. We're expecting that to improve, as we get into I think the reelections in June.

And then Hong Kong and China. We're soft, but relative to what we're seeing and relative to what we've seen from other brands, our China business is down around 5% year-over-year.

And that's off of again that very large China Q1 last year. So our China business is actually performing well, but is down and impacting our overall Asia numbers as well.

In North America down 8%, I really kind of covered this. This is really around softening consumer sentiment.

Real meaningful uncertainty causing wholesale customers, to buy more cautiously. We see that, as you know our North America business is largely a wholesale business, and that that's under some pressure of buy in.

We see good sell through of our category sell-ins a little slower, and I think we'll see some of the benefits as we move to the second half of the year. And there is greater caution on the consumer sentiment.

We're seeing that in retail traffic that, we were messaging at the end of the year in Q4, and that carried into Q1 as well. Europe continues to deliver strong results.

4.4, I think we'll see something similar in Q2. We had a very strong all of our brands up, Samsonite up 1.2%.

Very strong Tumi number offered the push to further penetrate Tumi up 11%, and American Tourister was up 11% in Europe as well. So in general Europe is trending well, and holding really well for us, as we go into Q2.

And then Latin America, I covered really this, a bit of softness in Q1, but we're back to, in my view, from what we can tell, double-digit growth for Q2, and really remains on track, as a region that has real kind of long-term growth opportunities to further penetrate across Latin America. On Page 6, just the brand lens.

I've covered the numbers already but again, Samsonite reported down 4.5%. If I adjust for this one wholesale pull in from Q4, and North America is down around 2.6%.

Tumi is down 2%. But within Tumi, we have growth in the rest of the world.

So we saw growth in Latin America almost 16%, Europe's up 11%. And we saw even with some of the softness in sentiment within Asia, Tumi delivered growth of 0.4%, and as you expect, and then a similar trend to what we're seeing in Q4.

The North American consumer sentiment, and demand and retail traffic is definitely lower. Seeing growth or degrowth of 6% in North America for Tumi.

And then American Tourister I covered down around 10%. Really around wholesale and consumers.

Just a few call outs in the next few pages. I think these are important.

I'll cover tariffs, and Reza will cover it in more detail as well. Particularly with Tumi in China, we're seeing a really good growth story, as we further penetrate Tumi within China.

You can see the journey here from Q3 of last year, to Q4 where we were positive to a positive almost 11% for Tumi, China. We've had some great store openings.

We have some store openings that are coming. We've got some store opening coming from Beijing, Shanghai, Shenzhen.

These are great stores. I was visiting the Shanghai location preopening that will open in the middle of Q2, and these stores are really setting flagship locations within China that are really delivering some good story for us.

And we're quite excited with the momentum we're seeing within our Tumi China business. Just a call out for a store that we opened in Chengdu.

This is opened in Q1, and really serves as a flagship store in the Western part of China. Really quite an amazing store.

Off to a good start out of the gate, is the way I would describe it. From a tariff perspective.

And again, Reza will cover it, but I just want to, and I'm sure people have questions on this, but what I would say is, we're taking decisive actions to mitigate the impact of tariffs, as most companies in the U.S. are and really carefully managing.

It's very fluid. The timing of implementation, scope of tariffs, as well as, how it's affecting supply chain and consumer demand remains unknown.

A lot of our ability to think about the back half of the year, is really challenged, because it's such a fluid situation. But we are taking actions with what we see, which is what you'd expect from us.

Incremental tariffs are going to increase product costs. We're seeing that today, with what we're seeing in the 90-day period, with effectively a 10% increase on tariffs from most of what we source for the U.S.

And we will take actions on that. We believe our extensive diversified and strong sourcing platform allows us to have strength in this, and really gives us some competitive advantage, to move quickly to manage this.

And we have taken action and we're planning on taking actions, as the potential tariff kind of journey continues. We're sourcing, as you know, a significant part of our products for the U.S., outside of China.

We see some opportunity to even expand that further. We're roughly 10% sourced from China today.

My sense is by the end of the year that will be closer to, 1% to 5%, much, much lower. We are taking strategic price increases on products that are significantly impacted.

Okay. And so, we're doing that today.

We're in the midst of that. We're partnering with our suppliers to manage costs.

We have really long standing relationships with our suppliers. We're in many ways in it together with suppliers.

And suppliers are reacting and helping us with some price adjustments on products as well to help offset. We reengineer products all the time that might not have an immediate impact, but our ability to really continuously innovate and introduce, and reengineer products allows us to maintain margin profiles in the long-term as well.

And we'll be working on that as well, as we always are. And in a very -- a smaller way.

But we have done this, we capitalized by bringing some forward -- inventory forward to levy. And so, when you look at our working capital, you'll see some slight increases in inventory, really to be just ahead of it, like lots of companies.

And I think we've done that at the right levels in the business. Reza will cover more of this in detail in his section.

But I want to give you a sense that, we are taking decisive action and managing this very well. And just a few slides to call out, because I think these are important.

I said it on my first page. But scale advantage will help us manage, and navigate through the tariffs and the impacts.

And I have strong belief, we'll come out stronger, as we often do, as we leverage our advantages in the business. Real advantages in product innovation and design, which I was just talking about.

Our real ability to constantly innovate, and manage products to margin profiles, with real kind of, invest strategic investments in design and development. A huge scale advantage for us.

Marketing, advertising is a big lever for us, so we can be pushing the business. But it's also a lever that we can manage, and you'll see us manage the advertising just a bit this year, to help offset maybe some of the softness in sales, some of that in Q1.

You'll see that through the rest of the year, as we manage that carefully while still investing in driving growth through marketing and advertising. Our go-to-market strategy is probably one of the best globally.

It is the best globally, I don't have to say probably, it is the best globally in the world. We touch every part of the world with local execution, with really diversified organizational structure that allows us, to execute within each market perfectly.

And I think that gives us advantages, as we're managing North America wholesale customers buying a little differently, or what we're seeing in China, or what we're seeing in India. We're able to do that in a very localized way, and react to what we're seeing.

And again that's a huge scale advantage, and it goes without saying on our sourcing and manufacturing capabilities. And the sheer scale and ability, to work with these really deep rooted long standing relationships, with our suppliers to manage through what we're seeing from a pressure perspective together, not just on where we're sourcing, but what we're doing to manage through the impacts that we're seeing.

Again all these things the teams are using to our advantage, to really manage through the pandemic, not the pandemic, the tariffs sorry. And then lastly, there's real diversification in this business.

When you look at our business, and you're looking at it from a global footprint. 2/3 of our business is outside of the U.S., 1/3 of our business we're managing the impacts of tariffs, and I think we're doing a really good job.

But you can see and you know that the diversification from a geographic perspective, is a benefit to us as we navigate the business. We're diversified from a product category perspective.

Today non-travel is 34% of our sales. When I started quite a while ago there was something less than 10%, and there's real opportunities to deliver some outsized growth in non-travel category, we continue to push that, and real strength within travel as well as you know.

And then, we've got a diversified channel mix and so again we manage that very diversified, we're very local to market, and it's been evolving over time, really evolving to consumers preferences on where they buy. And again that gives us a wonderful advantage from a diversification perspective in the business as well.

Just to call out on travel this slide, you've seen this slide before. I think the 2 takeaways here is, again we correlate really well to travel.

Okay, you can see our journey, which is the blue line. The red line is the overall global passenger -- of global passenger travel numbers.

And the correlation is very strong. And I think importantly, the outlook even for this year, when we look at travel and we look at even within North America, the travel numbers are positive for this year.

The overall outlook for travel for '25, still remains 5% growth in travel. And again this directly correlates to our business, when we think about where we are strength of our business.

The consumer sentiment is a bit softer, they may be buying a little bit differently, but they are definitely still traveling. And that's really positive for us, not just for this year, but all the forward indicators for next year and the years ahead, are really strong from a travel perspective.

And then lastly, just a couple of product call outstanding, because we -- in the midst of, what will seem like pressure, this business is continuing to innovate and develop and really starting to launch some really exciting products for this year. We have a couple of collections that are coming.

Parallux and Light Geo. Parallux is really this amazing bag that will launch globally.

It's a Red Dot award winner. It's heavily recycled material.

It's got really interesting packing, front end packing, split case packing. I'm actually testing this product now, traveling with this before it's launched, and it's become one of my favorite bags to travel with.

This is launching as we get into Q2 into Q3, and I think it'll do very be very successful. Within Asia we developed a super lightweight Light Geo backpack.

This is really an amazing product with light -- with recycled material, but distinctively lightweight and really with a really fascinating look that I think will do some amazing things in our non-travel space. Launching in Asia.

The rest of the world I'm sure will pick it up. It's going very, very well.

And then Octolite Neo really interesting with max capacity for packing and Zenpod. These are both launching in Asia.

These are really interesting products with a different lens, but delivering on everything that we do really well. And these are just a small sample of what we're doing from the innovation perspective, to continue to launch products.

On Page 17, we launched 19 Degree Lite. I mentioned this at the year end result, and this is off to a good start.

This has been very well received. It's Tumi's lightest weight luggage.

I'll say yet more to come, more to come on lightweight for Tumi, and this bag and I'm traveling with this bag a bit as well. This is really a terrific bag.

Every component of the product has been engineered to deliver lightweight, and we're now pushing it with meaningful campaigns, and marketing support across the globe with really good success. So keep your eye out for that.

If you haven't seen that, have a look. And then lastly, and this is a limited edition collection, but I wanted to show this product in light of sustainability initiatives that we continue to push.

We launched this product in a limited edition around Earth Day. This is our process case using Roxkin material.

But importantly, 70% of this shell, is made from effectively recycled cooking oil. Where we're collecting, or the producers are collecting recycled cooking oil, turning it into the Roxkin material and then making it into luggage.

And it really talks about this real amazing bio-circular material opportunity for us. And because of our scale, we're able to do this.

And so this really speaks to the level we can push on the front of innovation, and real sustainability in our products. And I think this has been terrific.

If you get a chance to see this product, or look at it online, I think it tells a really amazing story about what we're capable of doing on the innovation side. With that, I'll turn it to Reza, and then I'll come back to just a brief outlook.

Thanks so much, Kyle. And we are on Slide 20.

Just a quick recap of the Q1 results, which Kyle mentioned. So sales came in at $797 million for the quarter.

That's down 4.5% constant currency. Gross margin ticked down about a point off of a very, very high number in Q1 of last year.

So we were 60.4% last year. We still delivered 59.4% on gross margin this year, largely due to geographic mix.

So obviously the Asia sales were down a little bit, and that's our highest margin region. So that blend brought that gross margin level down.

Adjusted EBITDA, adjusted EBITDA margin of 16.0% delivered $128 million of adjusted EBITDA, decreased by $34 million from the record number that we had in Q1 of last year. And then adjusted net income, delivering $52 million of adjusted net income in the quarter versus $87 million last year.

Going to the next slide, I am sure we were going to get questions on tariffs, so Kyle covered a bit of it up front. But just to get into a little bit of greater detail, as you can imagine, we are managing through tariffs.

The first thing that I'll start by saying, is that please bear in mind, we run a very well diversified business. So the U.S.

is roughly 1/3 of our business. So we benefit from having a globally diversified revenue base, and we are navigating tariffs and it is one of our scale advantages.

Having dealt with this already through the first round of tariffs that we had several years ago during the first Trump administration. We do anticipate tariffs being lower than what you see on the page here.

But we thought we would give you. If you literally took the news from the first day of the Liberation Day tariffs, it would have meant on the cost side of the equation, it would have been somewhere between 40% to 50% increase on the goods imported to the U.S., in terms of the cost component of it.

That's if literally we did nothing, obviously we take actions against that, and oftentimes we get questions in terms of what the impact is on cost of goods sold. What you should bear in mind, is that first of all, we don't anticipate these numbers being 40% to 50%.

And we had put this deck together before the good news that came in yesterday, or over the weekend in terms of what's happening with China specifically. But immediately after this 40% to 50% impact was announced, what would have been the impact for us?

Immediately, everything was put on pause. So if anything, we're running well below these levels.

Ultimately, as we look at over the course of the year, we expect that tariffs will resolve, but we just don't know what it's going to be as yet. So what you should be focused on, is the actions we're taking on the cost side.

So we're working to fully neutralize the impact on the cost side, between price increases, negotiations with the suppliers and over the medium term -- reengineering product to hit the certain price points that we have. Again, this is a scale advantage that we have.

So what we're very focused on, is the actions that we're taking. What you should also look at is we have put the product sourcing components here in terms of China, non-China.

It's less about the China versus non-China story. It's really around how nimble we can be, because depending on how tariffs shake out, depending on which countries will be more favored nation versus less favored nation, we will obviously work with our supplier base, and our supply teams really are industry leading in this regard in terms of trying to shift production, to where we need to know.

So where we are today, we don't know where it's going to land by the end of the year. The good news, is it seems to be trending in a positive direction, compared to where we were several weeks ago.

And we will manage through it. So it's less a component of in terms of cost.

It's really around where we're focused on is, what is going to be the net impact to the end consumer, and what's going to happen to consumer demand. So as we sit here right now, consumer confidence is definitely impacted in North America.

There's pockets in Asia, where we're seeing consumer confidence impacted as well. And that's where we look at it in terms of weekly sales reports, and looking at how the consumer, is behaving and we'll see how it shakes out over the course of the year.

But the good news is, as Kyle mentioned, we are seeing a level of stability so far in terms of the consumer confidence that we're seeing. So it doesn't appear that things are getting any worse, is the way we would characterize it.

Looking at Slide 22 in terms of the other financial highlights, just to go through some of the additional metrics, distribution and G&A expenses of $318 million, flat compared to Q1 of last year. That is not an easy thing to do, when you add 62 net new stores.

But it just gives you a sense in terms of the discipline, we have around the cost side. So the levers that we have at our disposal, we are definitely managing.

Advertising spend in the quarter was $42 million 5.3% of sales. That's $11 million lower than last year.

But as a percentage of sales we were 6.1% last year. We're at 5.3%.

Advertising is a lever that we're going to continue to monitor over the course of the year. Obviously, if we feel the consumer confidence is impacted, we're not going to over index on advertising, if the consumer isn't shopping.

But as it stands right now, as we get into the busy summer season, we're continuing to invest behind our brands. But on the back half of the year, we we're going to revisit and see how that plays out, and we may dial that back to maintain margins depending on how things are shaking out with the consumer.

Operating profit of $110 million in Q1, 2025. That's compared to $150 million last year.

That's driven primarily by lower gross profit that we talked about, and it's offset by a reduction in the advertising spend period-over-period. Adjusted free cash flow.

We did have $41 million of negative free cash flow in the quarter. This was largely due to the fact that we pulled forward some of the inventory purchases that we were doing in Q4.

So if you looked at where our inventories were, and specifically our accounts payable balance at the end of the year, we did do a lot of pre-purchasing, especially ahead of Chinese New Year, but especially for North America. And in the quarter, we ended up basically paying those bills.

So that affected free cash flow in the quarter. Net debt, healthy balance of just shy of $1.2 billion of net debt.

That's after returning cash to shareholders of $350 million. So obviously we paid the dividend.

We did $200 million of additional share purchase, but the net debt balance well under control. Calculated net leverage 1.8 turns of net leverage in the quarter.

Obviously, we feel very comfortable with our overall financial flexibility that we have with our net debt position, our net leverage as well as ample, ample liquidity. Just shy of $1.4 billion of liquidity, which is a number that we feel very good about.

So moving on to Slide 23, just a graphical depiction of how we've been managing our distribution and G&A expenses. Again, if you look at Q1 of last year, we were $317.5 million of distribution and G&A expenses.

So really looking at kind of the fixed cost base of the business. If you're looking at Q1 of 2025, we're basically at the exact same number through 17.6, despite adding significant stores, and having salary increases and some inflation on costs, et cetera.

So managing the cost side of the equation, I would say very, very well, with a lot of focus from all of the teams globally. On Slide 24, just to give you a sense in terms of how our sales mix has been shifting, our DTC net sales were definitely more resilient.

Although we are seeing some wholesale customers. I would say it's a bit lumpy in terms of -- the product purchasing that we're seeing, especially in North America.

But DTC still remaining fairly resilient. If you're looking at the composition, the DTC net total, 38.2% in Q1, 2025, an uptick compared to 37.1% in Q1 of the prior year.

Overall, e-commerce sales continue to grow. It's about a 7.5% on a constant currency basis of growth.

In terms of what we're seeing in terms of overall e-commerce, I'm looking at both direct to DTC as well as sales to the retailer channel as well. So e-commerce still remaining resilient as well.

On Slide 25, we continue to focus on diversifying our category mix. We have touched on this at the year-end results as well.

We see a real opportunity in the non-travel segment, where we are underpenetrated, compared to the overall market. So it remains a focus area.

Each quarter we look at increasing that slightly. We're up to 36% of net sales, compared to 35.1% last year in terms of that non-travel component, and that market share continue to hopefully grow, as we move on over the course of the year.

On Slide 26, the balance sheet again, I think we feel really good about our overall balance sheet position. You did see a slight uptick if I'm looking from Q4, to Q1 of this year in terms of net leverage going up from just shy 1.6% to 1.8%.

That's just the flow through that you're seeing from the EBITDA, where I'm replacing a really strong record quarter last year with this quarter. But I think we feel really, really good about where our overall leverage profile is, and in terms of where we stand overall in terms of liquidity as well.

On Slide 27, looking at working capital, you can see the change year-over-year obviously year-over-year down $20.8 million in terms of net working capital. But I think what's more relevant is looking at net working capital was higher in the period ended March, compared to December and that's due to lower accounts payable that I just mentioned, as we reduced the overall account payable balance that we had.

As we had shifted some of the inventory purchasing ahead of what we anticipated to be tariff pressures. And then looking at CapEx, we're continuing to invest in the business.

On slide 28 as you can see, quarter-over-quarter relatively similar to what we had last year. We're a little bit shy of what we 11.4% versus 13.2% last year.

But you can see we're continuing to invest in retail. That retail CapEx is refurbishment of stores broken out, by store remodels as well as relocation, and then new stores as well.

Continue to invest in terms of software and some of the other R&D, but largely the CapEx number in the quarter, was largely on the retail store footprint, which we're continuing to invest behind. So with that let me turn it over to Kyle, for outlook and then we'll open it up for questions as well.

Okay. Thanks Reza.

Okay, and what else I've covered when I was going through my section, but let me work through this. So travel trends are expected to remain robust over the next several years.

We believe that provides support for long-term growth in our business. That's historically been the case and in many ways historically we've outpaced the growth in travel, which I think we'll continue to do as we look forward.

But there is significant uncertainty, and the macroeconomic environment has softened consumer sentiment and demand in the near term. I think once we, when I look at where we are, I think getting through the tariff negotiations I think will help consumer sentiment on the other side of that, and I think it will help some of this uncertainty.

The way that the issue is, it's fluid the timing is uncertain. There's plenty of uncertainty even with the China pause.

It doesn't mean that that's been resolved. And so that uncertainty, I think will continue to weigh on consumers as we roll into the year.

And particularly as we roll into the back half of the year, there's plenty of uncertainty. From a Q2 perspective, I'm expecting and seeing that it will be something similar to what we saw in Q1.

Okay, so down mid-single-digit range on constant currency basis. When you consider that's when the tariffs were announced really going into April of Q2, I think that's a good result.

And we're seeing that as we're kind of trending in through the quarter as we speak, the quarter faces an easier comp versus last year. So it gives you some sense that consumer sentiment has softened in the U.S., and it is impacting demand, particularly in North America, as we covered Europe remains strong.

I think Latin America is fine. And then pockets within Asia are seeing some impact from softening demand.

But from where I sit, a similar trend in Q2 versus Q1. So as Reza rightly said, not getting any worse, maybe getting slightly better, but in a good place for us as we're managing the level of uncertainty.

I think the real challenge in lots of companies, the challenge is forecasting the back half of the year. So it really remains a really fluid situation in its current form.

Tariffs will have a meaningful impact on demand, and a significant cost pressure. I expect that the landing spot to be different than kind of the current landscape.

Once we get through the pause, I think it will be okay. That said, we will navigate the cost pressures with our mitigation efforts.

Reza rightly went through it, and we have a good history of doing this. And again, our scale advantages and just the strength of our business and the reach of our business within sourcing, and global diversification allows us to manage this really well.

And I do think that we'll see some net sales improvement in the back half of the year off of a softer comp. So if you remember our, we're comping a softer period.

But with that said, it's hard to predict where that will be, and I think that's important. But the other takeaway I would really leave you with is travel demand really remains quite strong.

When you look at the forward indicators for summer travel for this year, they remain strong and that impacts our business in a positive way. So we'll be watching and executing against that.

We have the right products, we have a lot of new products coming to bear. And even though we might be managing advertising, we're still pushing at the right moments for our business.

So that I think will have benefits for us for the back half of the year. Notwithstanding the current kind of unsettled environment, both politically and economically, we are confident in the long-term growth outlook of the business.

We believe our ongoing investment in really exciting and new products, really innovative products that are changing in industry will continue. The brand elevations that we started a few years ago continues.

All of our brands are really sitting in a great spot. Our channel and product category expansion will strengthen the business.

As we're, as Reza just went through, we're investing in our business, we're investing in Tumi growth around the world. You're seeing the benefits of that within Asia and Europe for sure.

And we're really focused on maintaining a robust margin profile for this business, supported by really disciplined expense management. We continue to even outperform what we set for targets in many way as far as managing the cost side of the business, which is super important when you're facing some uncertainties like we're facing today.

And so I think you can see that in our gross margin, which is maintained very well considering and our cost side distribution and G&A costs really amazingly well advantaged, well managed and we continue to focus on leveraging our Octolite model to invest in growth. As we just went through.

Returning cash to shareholders, which we have real capacity to do. We're doing it this year, we'll continue to do that and to deleverage our balance sheet as we go forward, and really continue to strengthen the balance sheet side of the business, is something that we're very focused on.

And even in light of uncertainty we're delivering on today. And then just lastly on dual listing, because I'm sure we'll get questions.

Our preparations continue on this. However, we're closely monitoring the current economic backdrop and market uncertainty.

So the world's shifted a bit from where we were maybe at the start of the year. And we're managing that.

Our Board of Directors and management and I really believe a dual listing will really enhance the value creation for our shareholders over the short and medium-term. And we continue to be focused on that and we'll provide updates as we continue to progress, and as we watch market conditions evolve.

And with that, William, I'm very happy to open up to questions.

Thank you very much, Kyle and Reza for the presentation. And operator, we're open for Q&A.

Yes, hi there gentlemen, and thanks a lot for taking my questions. At the beginning of the presentation it seemed that you were pointing to a slightly better current trading.

I think you said Asia was slightly improving in Q2 and LATAM was back to double-digit growth. But at the end of the presentation you seem to imply that Q2 should be in line with Q1.

So I'm just wondering which is it? Secondly, I think you have a very good chart showing the correlation between travel trend in the long-term and sales growth for your business.

Travel trends this year should be up 5%. I suspect your business will not be up that much, but mostly because of sentiment.

But is the idea that the correlation continues and maybe you play catch up next year, is that the way we should think about it? And then lastly, I think when you talk about mitigation factors, you talk about pricing and cost adjustments, et cetera.

I wanted to come back on the pricing part of the equation. How much have you priced so far this year?

How much can you price for the full year? And is this global or is this more U.S.

centric price increases? Thank you.

Okay. As far as outlook goes, I think on a blended basis Q2 will look similar to Q1.

All I was pointing out is some slight green shoots within Asia. But I use the word slight, so I think our Q1 and Q2 will look similar in many ways.

Maybe, you know, a point or so better is what we're seeing at the moment. So I just cautionally say slight.

Latin America just had a blip because of back-to-school, and so and we've had that before in prior years with Latin America. So Latin America is really just back to trend.

But Latin America is not big enough to move the overall kind of inflection point anyways. So I think you should expect a similar Q2 versus Q1 on a consolidated basis with some pockets moving just a little bit differently is the way, I think about it.

Erwan, sorry to create that confusion. The travel trends and the correlation to travel, I expect it to stay very correlated.

I think consumer sentiment in our space, and we've seen this in the past. If there's consumer sentiment, they're still prioritizing travel.

Travel numbers are still quite good around the globe. Even in North America they're a little softer, but they're positive.

But the consumer is acting a little differently the way they're going into their pockets a little differently and that does impact us. But I have zero doubt on our correlation long-term.

I think, I'm not sure catch up is the right word, but I think consumers are still buying in. I think we will have some benefit from sell-in versus sell-out.

I think wholesale customers are buying more cautiously, particularly in North America. And so, but we're seeing pretty good sell-out on the side of the wholesale customer.

So I think there'll be some catch up benefit there. But again not enough to change my outlook for Q2.

Maybe a little bit of benefit in the back half, but again that's where I would label. It's so fluid it's hard to give you a good prediction on what that looks like largely, because tariffs aren't really settled yet, right.

And so, I think everybody is waiting. They're cautious in buying into the back half of the year, because we don't know what the answer is to the back half of the year.

I think on pricing, I won't give you the number I would tell you we're taking actions to offset the cost impacts the tariffs, and I think that's fluid as well. So we're taking some shorter term actions off of kind of, the pause tariff increase.

We're waiting to see what the other side of that is. And so I'm not going to be so specific there for you Erwan, because I don't think it's the right thing to do at this moment, but we're managing it as you'd expect us to manage it and -- with the right actions with our customers.

I would say it's largely U.S. We might have some price increases elsewhere around the world, but normal core stuff, but we're really focused on really just offsetting the impacts of tariffs.

So it's not something that we're seeing kind of ripple across the globe. And as we differentiate the product we sell.

So it's not like we're creating big disparities around the globe in pricing, because often what we're selling is unique to a market by as much as 65%, 70%. So I think we can manage that the right way.

Thanks for taking my questions. Two questions.

One is regarding the sales trend in second quarter. Do you see any kind of order pull forward in second quarter, especially for North America, sort of support the trend there.

And if we look into sort of the detail in Asia, like taking first quarter for example, we are seeing actually China didn't decline that much, India turning positive. Japan is actually also down like 2% to 3%.

But overall Asia on constant currency is still down 7%. So do you see broad based weakness across different countries in Asia, and does that kind of broad based weakness, if any, continue into the second quarter?

That's on sales. And the second question related to EBITDA margin.

So assuming the second quarter sales trend is similar to first quarter, and you are going to still have a similar GP margin profile, because the bigger kind of revenue size is second quarter, because of seasonality, are we going to expect that EBITDA margin in second quarter will be better than first quarter? Not just like better quarter-on-quarter, but on a Y-o-Y comparison basis, we're also seeing that better trend for EBITDA margin in second quarter?

Thank you.

On a sales trend perspective, there's not a lot of pull forward. I think in other industries we saw some meaningful pull forward in buying maybe, maybe appliances or autos.

Our industry doesn't do exactly that. I would say we saw a little pull in in Q4 of last year.

You know, that's why kind of our Q1 numbers, we kind of talk about Samsonite, particularly in North America. There's a little bit of pull forward, but there isn't a big pull forward happening in Q1.

I'm not really feeling that in Q2 either. And it's, because our industry often doesn't do that.

In many ways our wholesale customers are really waiting to see where tariffs end up. And so, if anything there's maybe a little bit of pent-up demand that, maybe we can kind of catch a little bit later in the year.

But we haven't had pull forward. I think a lot of companies are worried about pull forward, and having an impact to your back half sales, because maybe things were pulled forward.

That's not really happening in our world. We pulled some inventory forward, but it doesn't mean we've pulled sales forward is the way I would think about it.

From an EBITDA margin perspective, Q1 is typically our lowest EBITDA margin business. And all I would say is from a margin perspective, you'll see a better EBITDA margin in Q2 versus Q1.

But in line with what we typically see, Dustin, which is our Q2 margin, as our volumes are going up, and we're getting into the lead into summer travel, we'll see a better margin, EBITDA margin versus what you saw in Q1. So I don't know if that answers your question, but that's kind of the relative.

There's a little bit of seasonality in EBITDA margin. Yes, exactly.

And so as the year goes on, it's normal that it would sequentially be a little bit better as you go on.

Yes, right yes. And as you know, the back half's always better for us as we get the benefit of summer and benefit of holiday.

So it's kind of following the normal course for us. And you'll see a better EBITDA margin in Q2 versus Q1.

But really, because that's how it naturally happens. As far as Q1 Asia, in the trend that we're seeing in Asia, I think we are seeing sentiment across Asia having some impact.

We've called out some of the bigger companies countries, because they matter. So India positive is a good trend for us.

We saw that in Q1. Q2 looking somewhat similar.

Our China business, and I don't know what your views are on Dustin, but China down five considering kind of the backdrop was actually a pretty good result for us off of a tremendously strong Q1 last year. I think that's a pretty steady story for China as well as we go into Q2.

So I think steady is the way I would think about it. Maybe a tad better, but steady is what I would probably guide you to.

Japan's held up really well. Japan still is a destination.

Japan was very strong at the end of '23 and '24, and continues to trend. Okay.

It's not at the same growth levels that we've seen in the past though, so it's a bit more kind of lower single-digit kind of zip code is what we're kind of anticipating for Japan, but people are still traveling in Japan. Korea has been a drag on Q1.

Korea will be better as we get to the end of Q2 as our indications. There'll be some pent-up demand in Korea.

And I think you'll see a better finish to Q2. I think it's the start of Q2 is similar to what we saw in Q1, but a better finish and probably a better Q3 and Q4 for Korea as that settles down.

As Korea is a big market for us within our Asian numbers. So I think that'll have some benefit.

And then, I think that's the general gist. We had a very strong Australia last year.

That'll be kind of, comping a strong period, but it's still looking pretty good for us. And I think overall, Asia is waiting for some of the uncertainty to lift as well.

I do think that that has a bigger impact within Asia than, what we're seeing in Europe, for example, which has remained very, very positive. And I expect to be positive.

I expect Europe to have an amazing travel season this summer.

And everything we just said, Dustin, what we're seeing right now is the reason we say it's very similar. There's puts and takes, but there's like one point up here, one point out there.

There's nothing that's materially shifting one way or another. It's just the puts and takes are within like 1% to 2% for each of these countries either direction.

So one's doing a little bit better, one's doing a little bit worse, and it kind of blends to a similar number.

What I would label, is steady or stable is I think the way I would think about it, and I think steady or stable, given the uncertainty is actually a good result in my lens. And I kind of said it at the start, but as that uncertainty starts to go away, I think that's a benefit for us, because people are still traveling.

And I think as sentiment kind of adjusts as things get sorted, that'll be a benefit, because people are still traveling.

Yes, hi, management team. Thank you for taking my call.

I have a couple of questions. First regarding the brand performance.

We've seen very good performance for Tumi, and also Samsonite and then American Tourister are down 10%. I think last time management mentioned that if there is any downturn, the company is likely to focus more on the profitability, likely to launch like some of these lower price point brand, to fence off some of the competition.

So with this as a backdrop, what is your strategy for American Tourister sale? Do we have any plan maybe to expand the price range or you think that it is very like -- it's mainly due to the economic downturn.

Nothing much we can do about that. So focus on profit margin improvement and control some of the costs.

I'm not sure how you look at in terms of like American Tourister? Thank you.

That's my first question.

I think American Tourister. There's nothing wrong with the strategy is what I would say.

Just an overview I think American Tourister strategy is very much intact. The dip we saw in American Tourister is largely in order.

The wholesale customer is buying just a little more cautiously. So if you think about the wholesale customers that buy into American Tourister, all of their floor is impacted by tariffs.

Okay. And I think we're just caught in that.

So they're buying more cautiously. I think that more entry level consumers under a bit more of inflationary pressure.

So I think we're moving just a little bit differently. But it's more to do with the, I might even say timing of wholesale customers buying in, because they're managing everything that's around them than something around strategy.

If I use India, an example, because India is a big piece of our American Tourister story that's delivering growth. Okay.

And I think that's a positive statement within American Tourister. We have, particularly when you get to Asia, we have a pretty wide price range, and we can flex kind of the entry price and the upper price, but we've been doing that all along.

That's well intact. So again, I think the top level answer is nothing to do with strategy, more to do with kind of timing and kind of the current situation, I expect.

And if you use Europe, for example, American Tourister is up 10% right now. Some of that's again, timing of how customers are buying in.

But Europe's in a little different place than maybe the consumer sentiment in the U.S. That I think is having, what I would label as a kind of short-term impact to what will be a good long-term story for the brand.

And I said it a little bit earlier, when we said it's a little bit choppy in terms of when the wholesale customers are purchasing. American Tourister is almost entirely wholesale.

And so that's where you see that. And if you're looking at Q2 actually, I mean the strategic components of it, which Kyle touched on, like for instance in India specifically.

We have some new product launches specifically that are really resonating with the consumer. So I think we feel really good about what we're doing with the brand.

It's just more how are the wholesale customers buying?

Yes. I see, so for the second quarter, if I take a look at the trend by brand, is it also similar or maybe American Tourister will see some improvement?

American Tourister is actually like, again, we've just started the second quarter, but American Tourister so far is actually improving in this quarter, which is the timing. Again, it's still early in the quarter, but that's how we're seeing it right now.

Yes. Cool.

Yes. Another thing is regarding the U.S.

market. So with the tariff overhead, have you guys like spoken to the wholesaler?

Because my understanding is that U.S. is like 70% wholesale.

So in that case, the peak season is about Thanksgiving 4Q so when will be the time that regardless of the uncertainty of the tariff, you need to send something out, ship something out to the market, otherwise there's nothing at the store. So when will we see that and yes?

We're in constant communication with our wholesale customers. These are decade long relationships.

Big, it's really in many ways 10 to 15 large customers that are kind of in it and we, and as we drive their categories. So we're very connected.

If anything, we've heard some signals where some other categories that they're selling maybe are under pressure like kitchen appliances, and those kind of things, and they might even prioritize travel differently within their stores. The real challenge, and I think the crux of your question, is there's uncertainty in kind of the resolution of the 90-day pause.

And that impacts, where people are as far as leaning in and what pricing actions. Because we've been involved in every discussion with every single customer.

We're working really closely with each other, to make sure we get that timing right so that we, so that we're in a good place. And I think, we'll be in just a fine place.

I think we've got plenty of time to do it. But as you are rightly asking, those conversations are weekly with almost every customer as we manage that.

But I think we'll be in a good place is what I'm hearing from the U.S. team.

Okay. William?

Great. That is it.

And thank you very much, Kyle and Reza for the presentation. Thank you very much everyone for joining the call.

Thanks everybody.

Take care. Bye-bye.