Citigroup: Lowering Samsonite's target price to HK$19.7, expecting continued profit pressure in subsequent quarters.

Citigroup published a research report stating that Samsonite's first-quarter adjusted net profit fell by 40% year-on-year to $52 million, below expectations. This was mainly due to a high base, weak consumer sentiment, and changes in wholesale timing in North America leading to weak revenues, and operating deleverage performance was worse than expected. The bank expects the company's profit pressure to continue in the following quarters, as the impact of tariffs on consumer demand and profit margins continues to persist. Management expects that despite a lower base, second-quarter revenue will still decline by a low single-digit percentage year-on-year. The bank lowered its profit forecast by 22% to 29% based on a more cautious sales and profit margin outlook and tariff uncertainties, lowering the target price from HK$26 to HK$19.7, maintaining a "buy" rating.