Samsonite Q1 2025: Travel Giant Holds Ground Amid Tariff Headwinds and Softening Demand

Samsonite Group delivered first-quarter net sales of $796.6 million, down 4.5% year-over-year on a constant currency basis, marking a pullback from an exceptionally strong Q1 2024. While the headline decline stings, the company managed to preserve its core profitability with a 59.4% gross margin and 16.0% adjusted EBITDA margin, demonstrating resilience in a macro environment clouded by U.S. tariff uncertainty and weakening consumer sentiment globally.

The Numbers Behind the Slowdown

The decline wasn’t uniform across Samsonite’s portfolio. The company’s largest brands—Samsonite and TUMI—“performed relatively well on an underlying basis,” according to CEO Kyle Gendreau, despite headwinds that hit certain regions harder than others.

Geography tells the full story:

• Asia slid 7.0% (constant currency), retreating from a record Q1 2024 but stabilizing compared to previous quarters. China specifically dropped 4.8% after surging 23% in the prior year, while India surprisingly turned positive (+2.6%), offering a glimmer of optimism.

• North America contracted 8.0%, weighed down by soft consumer confidence, wholesale channel timing shifts, and caution among retail buyers. Approximately $8.2 million in wholesale orders shifted from Q1 2025 to Q4 2024, an artificial headwind analysts should keep in mind.

• Europe bucked the trend with +4.4% growth, driven by TUMI (+11.1%) and American Tourister (+11.2%) gaining traction across the region.

• Latin America flatlined at roughly 0%, after years of double-digit growth—a meaningful deceleration tied to weakness in Mexico (-18.0%) and a softer back-to-school season in Chile.

The Brand Battle: Winners and Laggards

TUMI continued punching above its weight, declining just 2.0% globally while posting impressive growth outside North America (+3.4%). The premium travel brand is carving out geography-specific strength, particularly in Europe and Latin America, though it couldn’t escape North America’s broader malaise (-6.3%).

Samsonite brand net sales fell 4.5%, with Asia’s 8.6% drop and North America’s 6.0% decline offsetting modest gains in Europe and Latin America. American Tourister took the hardest hit at 10.8% decline, signaling value-conscious consumers are indeed tightening their wallets.

Margin Pressure and Cost Control

Gross profit margin compressed 100 basis points to 59.4%, primarily due to a less favorable geographic mix—Asia’s higher-margin sales base shrunk from 39.6% to 38.5% of total revenue. The company offset some pressure by slashing marketing spend 20.3% year-over-year to $42.1 million, a tactical move reflecting softer retail traffic.

Operating profit took a steeper hit, tumbling 26.9% to $109.5 million, as lower sales rippled through the P&L. Adjusted EBITDA fell to $127.6 million (16.0% margin, down 280 basis points), while adjusted net income dropped 40.3% to $52.0 million.

The Tariff Wild Card

The elephant in the room is U.S. tariff policy. Samsonite has aggressively de-risked its China exposure—only 15% of U.S. product now sources from China, down from 85% in 2018—but the company remains cautious. Management is re-engineering products to reduce costs, negotiating with suppliers, forward-buying inventory to buffer near-term tariff impacts, and considering selective price increases on heavily tariffed items.

“The timing of implementation, scope and extent of tariffs…remains unknown,” Gendreau acknowledged, underlining why Samsonite is guiding for Q2 2025 net sales to decline in the “mid-single digit range” on a constant currency basis.

Cash Flow and Capital Allocation

Adjusted free cash flow swung to negative $41.2 million from positive $6.5 million in Q1 2024, hurt by lower EBITDA and a working capital buildup as the company stockpiled inventory ahead of potential tariff escalation. Despite this, Samsonite returned $42.9 million to shareholders via 16.7 million share repurchases during the quarter, maintaining its capital discipline.

The company sits on $601.7 million in cash and $1.3 billion in total liquidity, with net debt at $1.2 billion—comfortably positioned to weather near-term turbulence.

The Silver Lining: DTC and Long-Term Bets

Samsonite continues expanding its direct-to-consumer footprint, adding nine net new company-operated retail stores in Q1 (reaching 1,128 stores globally). Excluding North America, DTC net sales grew 2.9%, with e-commerce jumping 7.1%, suggesting international consumers remain more resilient than their U.S. counterparts.

The non-travel category—business and casual bags, backpacks, accessories—expanded to 36% of sales mix (up from 35.1% last year), reflecting management’s strategic bet on lifestyle diversification beyond luggage.

The Outlook: Cautious but Confident

Samsonite expects Q2 2025 to benefit from an easier year-ago comparison, but macro headwinds and tariff uncertainty will likely persist. The company is bracing for a challenging second half of 2025, though it remains confident in travel’s long-term growth trajectory and its own competitive positioning.

Management is also preparing for a dual listing on a U.S. exchange, though they’re monitoring market conditions carefully. For now, the message is clear: Samsonite is managing for resilience, not growth, navigating a period when tariffs, weakening demand, and geographic disparities require tactical agility rather than strategic expansion.

Samsonite investor relations updates will likely hinge on how tariff negotiations unfold and whether consumer sentiment stabilizes in the back half of 2025.