Samsonite Earnings: High-Price Strategy Backfires; We Expect Promotions Ahead

Samsonite’s second-quarter sales were down 2% year over year and missed our expectations by 12%, though profit margins remained steady. Management lowered its full-year revenue guidance by approximately 7% and slightly reduced the adjusted EBITDA margin forecast by 20 basis points. Despite ongoing growth in global travel, Samsonite's reluctance to lower prices—which are about 20% higher than prepandemic levels—is significantly affecting the attractiveness of its products in the highly competitive luggage industry. We maintain our view that Samsonite will eventually abandon its current pricing strategy, opting instead to chase incremental profits at the expense of margins and its premium brand equity.