Personal Finance

Why Tupperware Brands Corporation Stock Tumbled Today

Some tupperware containers in a refrigerator.

What happened

Shares of Tupperware Brands Corporation (NYSE: TUP) 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.

Some tupperware containers in a refrigerator.

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.

10 stocks we like better than Tupperware Brands

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Tupperware Brands wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of June 4, 2018

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 .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More