Shares of Tupperware Brands Corp. (TUP -9.55%), a manufacturer and retailer of a variety of kitchen and home storage products, are down nearly 11% as of 10:45 a.m. EDT Tuesday, after management lowered first-quarter sales and earnings guidance late Monday causing some investors to hit the panic button.
Management now expects first-quarter revenue to decline 2% compared to the prior year -- or roughly 3 percentage points below the prior low-end guidance calling for a 1% gain in sales. The worse-than-expected revenue as well as an approximate $0.06 impact from higher than foreseen income tax also forced management to move first-quarter earnings estimates from a range of $1.01 to $1.06 per share down to $0.87 to $0.92 per share. Driving forces behind the lowered guidance included customer service issues from the now closed French manufacturing and distribution facility, slower than expected sales in Indonesia, and supply chain issues in Brazil.
"More broadly, we have confidence in how our business will perform going forward, as we continue to evolve our relationship-selling business model to include greater access to our powerful brands and innovative products through the use of digital tools, branded contact points and a relevant earning opportunity for our sales force," Chairman and CEO Rick Goings commented in a press release.
Sales during the first quarter were clearly disappointing, but if management can execute its revitalization plan and strategies to grow sales and improve operations, these issues should prove to be more of a speed bump than long-term issue.