Today's hot IPO isn't a blazing dot-com or even a maker of organic macaroni and cheese.
Shares of Tumi
There's plenty to like in Tumi. Net sales soared 31% to $330 million last year, and that was after climbing 29% higher in 2010. A healthy operating profit of $60.4 million translates into attractive operating margins of 18%.
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Nearly half of Tumi's sales come from its 100 stores located at shopping malls that cater to affluent shoppers and its outlet stores that draw the bargain seekers. Another 10% of Tumi's net sales -- up 55% over the past year -- come from Tumi's e-commerce initiatives. The other 42% of Tumi's business comes through third-party retailers that specialize in travel accessories.
Tumi's a strong performer at the retail level. Average sales per square foot have grown from $642 in 2005 to $972 in 2011. Taubman
Tumi is obviously not at the Apple Store level of performance, but brisk sales will make it an attractive tenant to upscale shopping center landlords. It's therefore a good thing that Tumi plans to open eight to 16 stores a year over the next few years.
The catch here is if today's hot IPO is as expensive as some of its signature cases. With 67.9 million shares outstanding, Tumi is now a $1.7 billion company at this morning's open. At a time when the economy is showing signs of life and the travel industry is likely to follow, Tumi's future is bright -- even if the shares are no longer cheap.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.