Shares of Tupperware (NYSE:TUP) 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.
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.
"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."
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."