Tupperware Brands Nosedives On Dismal Q3 Earnings; Mulls Restructuring Actions

  • Tupperware Brands Corp TUP reported a third-quarter FY22 sales decline of 20% year-on-year to $302.80 million, missing the consensus of $336.80 million.
  • The decrease was driven primarily by lower overall sales force activity, continuing lockdowns in China, lower consumer sentiment in Europe and adverse impact to unit volumes due to price elasticity.
  • Sales in North America fell 16% Y/Y to $86.3 million, South America rose 1% to $70.3 million, Europe decreased 33% to $60.8 million, and Asia dropped 24% to $85.4 million.
  • The gross profit fell 20.6% to $196.6 million, and the gross margin contracted by 90 basis points to 64.9%.
  • The operating margin for the quarter was 5.2%, with an operating income of $15.8 million.
  • The company held $111.6 million in cash and equivalents as of September 24, 2022.
  • Adjusted EBITDA was $29.9 million versus $77.7 million last year.  
  • Adjusted EPS of $0.14 missed the analyst consensus of $0.46.
  • CFO Mariela Matute said, "Given the revenue trends year to date, we expect to take additional restructuring actions in the fourth quarter, as well as implementing stringent inventory reduction programs."
  • As part of the next chapter of the Turnaround Plan, the company promoted Hector Lezama to Chief Commercial Officer (CCO) to oversee its efforts to achieve sustainable growth and profitability.
  • TUP also revealed substantial doubt about the ability to continue as a going concern due to the volatility in its earnings and progressive tightening of the financial covenants in the First Amendment to the Credit Agreement.
  • Price Action: TUP shares are trading lower by 41.52% at $4.51 on the last check Wednesday.
  • Photo Via Company
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