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Tumi Holdings reported fourth-quarter results on Wednesday . The high-end luggage company is moving forward with its global expansion strategy and enjoying record sales and earnings, despite foreign exchange headwinds.
Tumi Holdings results: The raw numbers
Source: Tumi Holdings Q4 2015 earnings press release.
What happened with Tumi Holdings this quarter?Net sales increased 2.3% (4.4% on a constant-currency basis) year-over-year to $167.7 million, as Tumiopened six new stores during the fourth quarter and a total of 27 in 2015. However, total comparable-store sales for all direct-to-consumer channels, including company-owned websites, decreased 4.6%.
In Tumi'sdirect-to-consumer North America segment, a 5.6% decline in full-price comparable-store sales and a 14.8% fall in e-commerce comps offset a 6% increase in outlet comps.
Tumi's internationaldirect-to-consumer division, when measured in euros, saw full-price comparable-store sales rise 7%, outlet comps increase 11.6%, and e-commerce website sales jump 35.1%. However, when translated to U.S. dollars, its full-price comps decreased 6.9%, outlet comparable-store sales fell 2.9%, and e-commerce sales increased 18.4%.
Despite the subdued sales performance, Tumi continued to improve the profitability of its operations. Gross profit increased 6.6% to$100.7 million, as gross margin improved to 60.1%, up from 57.7% in the fourth quarter of 2014. Excluding certain acquisition-related expenses and other special items, adjusted operating income rose 8.4% to$40 million, with adjusted operating margin rising to 23.9% from 22.5% in Q4 2014. And on a constant-currency basis, operating margin increased 12.3%.
All told, adjusted constant-currency net income, aided by a lower effective tax rate, rose 12.5% to$26.7 million. And adjusted constant-currency earnings per share, boosted by stock repurchases, increased 12.7% to$0.39.
"In fiscal 2015, we delivered revenue growth on a constant currency basis of 6.7%, adjusted EPS growth on a constant currency basis of 17.2%, drove significant gross margin expansion while protecting our brand in a promotional environment, and continued to push forward on our multiple growth initiatives," said CEO Jerome Griffith in a press release.
Looking forwardManagement expects net sales to increase between 4% and 6% for fiscal 2016, but noted foreign currency exchange issues could impact these estimates. Tumi expects to open between 15 and 20 stores this year, but total comparable-store sales growth for all direct-to-consumer channels is projected to be flat. And earnings per share are anticipated to be in the range of$0.93 to $0.97.
"Looking ahead, we will continue to make strategic investments to support our long-term growth initiatives and remain deeply committed to creating innovative products with exceptional quality and functionality for the global citizen," said Griffith. "We are also committed to growing our direct-to-consumer distribution worldwide through store openings, particularly in the international markets, as well as through the expansion of our global e-commerce platform."
The article Tumi Holdings Inc. Earnings: Global Expansion Fuels Profit Growth originally appeared on Fool.com.
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