What happened
Shares of Tupperware Brands Corporation (TUP -2.86%) were getting crushed today after the plasticwear-maker reported disappointing earnings results and cut its full-year forecast. In addition, the company announced several leadership changes. As a result, the stock was down 16.2% at 11:42 a.m. EDT.
Image source: Getty Images.
So what
Tupperware, which also owns personal care brands like Fuller Cosmetics and Nutrimetics, said revenue fell 7%, or 4% in constant currency, to $535.4 million, missing analyst estimates at $553.5 million. Management noted that the closure of BeautiControl and combination of Japanese businesses shaved 2% off revenue.
Revenue was down across all four regions, with South American sales declining 23%, or 11% in constant currency, due in part to political and macroeconomic problems in Brazil. Its global active sales force also declined 7%, which contributed to the decline in revenue.
On the bottom line, adjusted earnings per share fell from $1.21 to $1.17. In constant currency, it would have been $1.23, though management acknowledged a $0.10 benefit from a lower-than-expected tax rate. That compares to the analyst consensus at $1.10. CEO Tricia Stitzel said, "Although adjusted earnings per share was above guidance and the local currency sales comparison improved sequentially, we do acknowledge that we must perform better across the global portfolio."
Separately, the company also named a new chief marketing and strategy officer and several new regional presidents around the world.
Now what
Tupperware also issued a weak forecast, as the company expects revenue to fall 6% to 7% in the full year and 10% to 12% in the current quarter, a sign that the current headwinds will continue. It sees full-year adjusted EPS of $4.25 to $4.35, which includes a $0.25 currency headwind, below last year's total of $4.84.
Tupperware shares hit a five-year low on the news, as the company has struggled to grow earnings in recent years as its social sales model may be becoming obsolete in the digital era. With revenue and profits expected to decline this year, it's not surprising to see today's sell-off. However, at a P/E of 8 and with a dividend yield of 6.5%, the stock may appeal to value hunters.
