Key Takeaways:
Samsonite International S.A. (01910.HK) shares rallied nearly 3 percent despite the company reporting a 15 percent year-over-year decline in first-quarter adjusted EBITDA to $109 million.
"The near-term outlook remains challenging as ongoing conflicts in the Middle East keep disrupting travel trends," HSBC Global Investment Research said in a report, while noting an expected sales improvement in the second half of 2026.
The luggage maker’s net profit for the quarter fell 33.2 percent to $32.2 million. The adjusted EBITDA of $109 million was 11 percent below market forecasts, which HSBC attributed to a lower-than-expected gross margin and a 9 percent hike in administrative expenses.
In a move to support shareholder returns, Samsonite launched a $50 million share buyback program. The company guided for low single-digit revenue growth for the full year, a forecast UBS described as "better than market concerns," signaling potential for a gradual recovery.
Despite the earnings miss, investor sentiment appeared buoyed by the forward-looking guidance and capital return initiative. The company's shares last traded at HKD14.08, up 2.85 percent on the day.
In response to the weaker-than-expected quarter, both UBS and HSBC reiterated their "Buy" ratings but trimmed their price targets. A UBS analyst cut the firm's price target to HKD20.6 from HKD22.7.
Separately, HSBC Global Investment Research lowered its target to HKD19 from HKD24, reducing its earnings forecasts for fiscal years 2026-27 by approximately 9 percent to reflect the near-term headwinds.
The combination of a share buyback and guidance that avoided a worst-case scenario signals management's confidence in a second-half recovery. Investors will now be closely watching for improvements in travel trends and margin execution heading into the latter half of 2026 to validate this outlook.
This article is for informational purposes only and does not constitute investment advice.
