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Why Tupperware Brands Stock Plunged Today

By Jeremy Bowman – Updated Apr 24, 2019 at 10:10PM

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A dividend cut and an ugly earnings report sent investors heading for the exits.

What happened

Shares of Tupperware Brands (TUP -2.61%) tumbled today after the multilevel-marketing company badly missed the mark in its fourth-quarter earnings report and cut its dividend. As a result, shares of the household products company were trading down 29% as of 11:31 a.m. EST.

A set of Tupperware containers in a refrigerator.

Image source: Getty Images.

So what

Tupperware, which also owns beauty and personal-care brands like Fuller Cosmetics and Nutrimetics, said that revenue fell 14% in the quarter, or 7% in constant currency, to $505.9 million, well short of analyst estimates at $543 million. Sales were down in all of its geographic regions, though a stronger dollar weighed heavily on results in areas like South America. 

Adjusted earnings per share fell from $1.59 to $1.33, which matched estimates. Adjusting for currency exchange, earnings per share was $1.51.

Management said it would cut its dividend by 60% to $0.27 and will redeploy $80 million in annual dividend payments toward growth and transformation initiatives. 

CEO Tricia Stitzel said, "While we achieved our earnings per share expectations in local currency, our sales and segment profit results in the fourth quarter were not what we expected, leading to our desire to accelerate the business transformation to capitalize on our Global Growth Strategy."

Now what

Management saw more challenges ahead, projecting a decline in revenue of 2% to 4% for 2019 and for adjusted earnings per share to fall from $4.30 to $4.06 to $4.21. Both of those figures were worse than estimates of a 1.2% decline in revenue and EPS of $4.45.

Considering the dividend cut, disappointing revenue result, and weak guidance, it's not surprising to see Tupperware shares plummeting today.

Check out the latest Tupperware Brands earnings call transcript.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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