Tumi Holdings ( TUMI ) 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 million.
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 share.
It raised its 2012 revenue estimate to a range of $395 million to $400 million from its prior forecast of $390 million to $395 million.
"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 says.
They feature over-the-ear cushions that lock in the audio sound, eliminating exterior noise, like the buzzing of an airplane.
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 them."
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 belts.
"We're more than a travel brand, he said. "We're an accessories brand."
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 market.
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 touch-screen compatible.
"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 ( COH )and fashion and leather goods designer Louis Vuitton, owned by LVMH Moet Hennessy Louis Vuitton ( LVMUY ).
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 products.
Tumi's products should continue to strike a chord with consumers.
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 technology.
She expects luxury accessories brands to fare well over the holidays.
"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 holiday gifts.