Shares of Tupperware Brands (TUP -0.59%) fell dramatically in the first hour of trading on March 10, losing as much as 28% at one point. The driving force here was the company's earnings announcement.
Tupperware, which makes the iconic plasticware of the same name, posted a revenue increase of 17% year over year in the fourth quarter of 2020. Adjusted earnings came in at $0.14 versus a loss of $0.63 in the same quarter of 2019. That's pretty positive, but investors were still not pleased. That's because despite beating Wall Street consensus on the top line, the company fell well short of expectation on the bottom line, where analysts had been calling for a profit of $0.71 per share.
That a pretty big earnings miss and, not surprisingly, investors appear to have taken a dim view of the quarterly update. That said, there were a lot of positives in Tupperware's fourth-quarter results that suggest the company is, indeed, making progress in its turnaround effort. Notably it saw sales strength in three of its four major operating regions. And the fourth, China, was basically flat year over year. While investors may have gotten ahead of themselves here with the stock, that doesn't mean that Tupperware isn't making any progress on the business front. The company also announced that it brought on three new board members.
Tupperware's fourth quarter wasn't terrible, but Wall Street doesn't like to be disappointed. So the stock sold off sharply. Still, there are reasons to be positive here, given the improved sales results. With stock volatility high, however, conservative investors might want to sit on the sidelines until the share action is less... exhilarating.