National Post (Latest Edition)

Tup­per­ware Brands Corp. is now one of the hottest stocks on Wall Street.

- Janet Fre­und Business · Finance · Stocks & Markets · Investing · Wall Street · Infectious Diseases · Financial Markets · Health Conditions · Tupperware · Earl Tupper · Amazon · United States of America · Orlando · Florida · Linda · Weiser, ID · Tupperware Brands Corporation · Clorox

More peo­ple eat­ing at home and en­thu­si­asm about a cor­po­rate turn­around cam­paign have made Tup­per­ware Brands Corp. one of the hottest stocks on Wall Street.

Tup­per­ware shares have soared 345 per cent in the third quar­ter, giv­ing it the big­gest gain in the S&P 1500 Com­pos­ite In­dex, which in­cludes far more cel­e­brated stocks like Ama­ Inc. and Clorox Co. And the rally isn’t over, ac­cord­ing to an­a­lysts.

The coro­n­avirus pan­demic has helped boost sales of kitchenwar­e, in­clud­ing ev­ery­thing from stor­age con­tain­ers to bak­ing sets. Also, ef­forts to con­vert in- home par­ties to dig­i­tal vir­tual par­ties dur­ing the iso­la­tion pe­riod have paid off. Last quar­ter, 15 per cent of Tup­per­ware’s to­tal U. S. sales were through the e- com­merce tool, and in June ship­ments were the high­est for any month in nearly 20 years, the com­pany said.

Much of the suc­cess is also at­trib­uted to the re­or­ga­ni­za­tion and cost- cut­ting ini­tia­tives un­der­taken by Chief Ex­ec­u­tive Of­fi­cer Miguel Fer­nan­dez, who took over in April. Or­lando, Florida-based Tup­per­ware cut costs by more than US$ 60 mil­lion in the se­cond quar­ter, and ul­ti­mately ex­pects to slash about US$180 mil­lion in to­tal an­nual ex­penses this year.

“We are be­com­ing a leaner and more cen­trally or­ga­nized com­pany,” Vice Chair­man Rich Goudis said on the com­pany’s se­cond- quar­ter earn­ings call in late July.

The stronger sales and cor­po­rate turn­around led D.A. David­son an­a­lyst Linda Bolton Weiser to rate Tup­per­ware a buy when she be­gan re­search cover­age of the eight decade- old com­pany ear­lier this month. Her 12- month price tar­get on the stock is US$ 30 per share, im­ply­ing another 41 per cent gain from Mon­day’s clos­ing price.

“Tup­per­ware is ben­e­fit­ing from more cook­ing at home and from con­cerns over food stor­age and safety,” Weiser said in an in­ter­view last week. “Many of Tup­per­ware’s prod­ucts, kitchenwar­e, gad­gets, and stor­age con­tain­ers, are on trend right now,” which helped con­trib­ute to more than 30 per cent sales growth in the U.S. and Canada last quar­ter.

That’s a big re­ver­sal from dou­ble- digit de­clines seen in each of the prior three quar­ters. In fact, be­fore the se­cond quar­ter, Tup­per­ware sales had fallen in ev­ery three- month pe­riod since late 2017, and they’re still sig­nif­i­cantly lower than they were back in 2013 when the stock hit a record US$ 96 a share. The com­pany is pro­jected to have rev­enue of US$ 1.54 bil­lion this year, com­pared with US$ 2.67 bil­lion in 2013.

Still, the stock’s rapid ad­vance over the past three months has pushed Tup­per­ware’s price- to- earn­ings ra­tio to around 17 times, the high­est in more than three years, and its mar­ket cap­i­tal­iza­tion to above US$ 1 bil­lion ver­sus just US$ 210.7 mil­lion at the end of the se­cond quar­ter, ac­cord­ing to Bloomberg data.

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