Tumi Holdings Inc. delivered fourth-quarter earnings and sales that beat analyst estimates.
The company reported diluted earnings per share of 37 cents, topping the FactSet estimate of 32 cents. Fourth-quarter net income rose to $25.1 million from $23.7 million a year earlier as sales increased 2.3 percent to $167.7 million, which was better than the FactSet estimate of $164 million.
“We drove higher conversion and average unit retail in our North American retail stores in the quarter, despite having traffic challenges,” said Jerome Griffith, Tumi chief executive officer, on a conference call with analysts.
Gross margin for the fourth quarter expanded 240 basis points to 60.1 percent compared with 57.7 percent last year. Full-year gross margin expanded 170 basis points to 59.7 percent.
Griffith went on to say, “We’re extremely pleased to see our strategic direction to be less promotional as well as our increased retail growth, with retail sales accounting for approximately 54 percent of our annual revenue translating into higher gross margins in our [profit and loss statement].”
Total comparable-store sales for all direct-to-consumer channels decreased 4.6 percent. Tumi expects this number to be flat for fiscal 2016.
Tumi expects net sales this year to increase between 4 and 6 percent. Diluted earnings per share are expected range from 93 to 97 cents per share. The company plans to open between 15 and 20 stores for fiscal 2016.
Shares of Tumi closed up 0.6 percent to $17.99 before the after-market update.
The company’s stock is down 21 percent for the past 12 months, but in the last 4 weeks it’s rebounded some, gaining 12 percent. The company spent $8.5 million buying back shares in the fourth quarter.
Tumi markets luxury travel and business accessories and has about 2,000 points of distribution around the world, including department stores and specialty and travel doors.