Tupperware sales ‘soft’ in Q1 and income down

Tupperware had a 2 percent drop in sales in the first quarter of 2018, in line with projections from earlier this month when the company warned that its earnings report would be down.

Kissimmee-based Tupperware Brands Inc., which struggled with unexpected difficulties in closing a French factory, logged sales of $542.6 million from January through March, which was 2 percent lower in American dollars and 6 percent lower in local currencies.

Net income for the quarter dropped 24.5 percent from the same period in the previous year to $35.7 million, Tupperware reported. First quarter earnings per share were 91 cents, 2 cents higher than what analysts anticipated.

Investors took kindly to the report, and Tupperware shares (NYSE: TUP) increased 9 percent in Wednesday trading to $46.28, nearly erasing losses from earlier this month after the company’s initial dour earnings forecast.

“This was a disappointing start for us in which we faced a wide variety of challenges in Q1, both external such as strikes, severe weather, economic pressures and internal factors, which related to our execution and planning,” said Tupperware Chief Operating Officer Tricia Stitzel, who will take over as CEO in May for the retiring Rick Goings, in a call with investors.

Tupperware braced investors for the report earlier this month by announcing that forecasted sales would be down 3 percent and along with lower net income. However, earnings per share came close to the high estimate for the quarter.

Tupperware struggled across every market in the first quarter, which was hurt compared to a year ago from the closure of its struggling Beauticontrol line. In local currency, sales were down 14 percent in Europe, 7 percent in the Asia Pacific region and 5 percent in South America.

Sales in the North America region were up 3 percent, including a 13 percent revenue boost in Mexico.

Sales force, an important indicator for the direct-sales company, fell 2 percent compared to a year ago to 3.12 million people, including a 6 percent drop in North America.

Tupperware, which is known for its home and food storage containers and other household goods, also announced a $200 “opportunistic” share repurchase program.

The company plans to buy back the shares in the open market in the upcoming months, while maintaining the same debt ratio. Tupperware also plans to maintain its dividend program, Goings said in the investor call.