What happened
Shares of Tupperware (TUP +0.00%) have gotten demolished today, down by 31% as of noon EDT, after the maker of food storage, kitchen products, and beauty accessories reported third-quarter earnings results. Investors were dismayed by falling profits and a reduction in full-year guidance.
So what
Revenue in the third quarter declined to $418.1 million, missing the consensus estimate of $426.6 million. That translated into adjusted net income of $21.1 million, or $0.43 per share, well below the $0.62 per share in adjusted profits that analysts were expecting. The company said the bottom line took a hit from an impairment charge for indefinite-lived intangible assets, which was related to increased reserves for accounts receivables and inventories. Tupperware is coping with lower collections and higher sales returns.
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"Sales for the third quarter ended in line with our forecasted guidance as the challenging trends we've been experiencing in Brazil, China, and US & Canada persisted as we expected," CEO Tricia Stitzel said in a statement. "Profitability was adversely affected by accounting reserves related to our Fuller Mexico beauty business and adjustments to our tax provision."
Now what
Tupperware also cut its full-year guidance, and now expects total revenue for 2019 to fall 12% to 14%, compared to its prior forecast of a 9% to 11% decline. Earnings per share as reported under generally accepted accounting principles (GAAP) are now expected to be $1.93 to $1.99, down from the previous range of $2.94 to $3.09. Adjusted earnings per share should be $2.77 to $2.83, down from the prior outlook of $3.45 to $3.60.
Local currency sales for 2019 are forecast to decline 8% to 10%, which Tupperware attributed to "difficult consumer trends in key markets."
