Tumi Holdings (
) posted strong third-quarter results with sales and earnings
that topped views Monday as it wowed customers with a broad array
of new offerings.
The global premium travel, business and lifestyle accessories
brand also raised guidance for the year.
Tumi's earnings surged 650% vs. a year earlier to 15 cents a
share, 3 cents ahead of forecasts by Thomson Reuters analysts.
Sales rose 22.3% to $95.9 million, ahead of views for $92.77
Direct-to-consumer North America same-store sales, including
e-commerce sales, increased 10.7%, vs. a year earlier. Excluding
e-commerce sales, they rose 8.0%.
Direct-to-consumer international same-store sales in local
currency increased 21.8%, excluding e-commerce sales and 27.0%,
including e-commerce sales.
Management also upped its full-year 2012 earnings guidance to
a range of 70 cents to 73 cents a share, excluding non-recurring
items, from its prior estimate of 67 cents to 70 cents a
It raised its 2012 revenue estimate to a range of $395 million
to $400 million from its prior forecast of $390 million to $395
"Our results reflect our ability to capitalize on our market
position as an iconic global premium lifestyle brand to broaden
our product offering beyond travel-related merchandise and to
expand into international markets where we are achieving
exceptional growth, despite difficult market conditions," said
Chief Executive Jerome Griffith in a press release.
Tumi sells its luggage, tote bags, business cases, messenger
bags, iPad covers and other accessories via a few venues. Its
direct-to consumer segment includes its company-owned,
full-priced and outlet stores and its e-commerce websites.
Top Department Stores
As of Sept. 23, it had 111 company-owned stores. At wholesale,
the brand is sold by top department, specialty and travel stores
in more than 70 countries.
Tumi's strong showing comes as the company continues to
broaden its accessories offerings.
"Our goal is to become more of an accessories brand," said
Alan Krantzler, senior vice president of brand management. "It's
about serving our customers with products they need for their
travel and everyday lifestyle."
Keeping that in mind, in November, the company will launch
Tumi x Monster through a partnership with high-performance
premium headphone maker Monster.
The headphones, which will be available in Tumi's stores
around the world and tumi.com, are a special edition of Monster's
high-definition, advanced noise-canceling headphones.
The product fits well with the lifestyle needs of Tumi's
customers, who typically are frequent travelers, Krantzler
They feature over-the-ear cushions that lock in the audio
sound, eliminating exterior noise, like the buzzing of an
That's a real benefit to air travelers, says Krantzler, since
it's very fatiguing to have to listen to airplane noises.
Brian Sozzi, chief equities analyst at NBG Productions, says
headphones fit well with Tumi's lineup.
"Headphones make perfect sense for Tumi," said Sozzi. "Tumi is
a premium brand, and selling premium headphones is logical for
Attaching its name to headphones isn't a big risk for Tumi and
a good way to get its name out there, he adds.
Krantzler says while people usually view Tumi as a travel
brand, three-fourths of its units are products people use every
day, such as business cases, messenger bags and leather
"We're more than a travel brand, he said. "We're an
And Tumi has added a number of accessories to its lineup to
fill more of those everyday needs. It works with leaders in their
fields to customize products that aren't available in the
Over the past few years, it's broadened its offerings with
products such as rain coats, lightweight jackets, luggage scales,
travel adapters and small leather goods, such as gloves that are
"They're all accessories geared around providing day-to-day
solutions," Krantzler said .
Among the recent additions to the Tumi lineup is eyewear,
offered through a licensing pact.
Tumi operates in the premium accessories brand segment. It
competes with other high-end operators such as handbag and
accessories designer and retailerCoach (
)and fashion and leather goods designer Louis Vuitton, owned by
LVMH Moet Hennessy Louis Vuitton (
Its best luggage goes for $600 to $1,000. Briefcases and totes
cost $350 to $500.
But fashion-brand industry follower and Morningstar analyst
Paul Swinand says Tumi's products are well worth the price.
Tumi's products are really good, he says, and people are willing
to pay a premium for them because they know that.
People who travel once or twice a week need products they can
depend on, he says, and Tumi's products fit the bill.
People know Tumi's products are high-quality and they look
good, he adds.
The Tumi brand has a value proposition based around durability
and performance, says Krantzler. He says Tumi gets high marks on
the quality of the materials it uses in its products, and its
designs are very functional.
"In general, our products work the way customers want and need
them to work," he said. "They're made to last, and we have
excellent customer service."
Swinand concurs Tumi has struck a good balance between
"practicality, form and function and looks" with its
Tumi's products should continue to strike a chord with
Thomson Reuters analysts expect Tumi's full-year earnings to
soar 196% to 71 cents a share. They see a 14% pop in 2013 and a
19% increase in 2014.
Nancy Liu, a retail strategist at consulting firm Kurt Salmon,
says there's a nice market for luxury luggage, especially with
the Asian consumer having more wealth to travel.
Overall, the market for luxury accessories is in good shape,
she adds. With the increasing popularity and availability of
devices like tablets and digital readers, the demand has
increased for luxury accessories that allow you to carry your
She expects luxury accessories brands to fare well over the
"In general, we're expecting holiday sales overall to be good
and up from last year," she said.
She expects luxury accessories to be a big category for