Tupperware Brands Reports Third Quarter 2016 Results – Sales Up 2% To $521.8 Million

Tupperware, CEO, Rick Goings


Tupperware Brands Corporation today announced third quarter 2016 operating results.

Rick Goings, Chairman and CEO, commented, Up against the prior year's successful third quarter that achieved 7% local currency growth, sales were even on a dollar basis and grew 2% in local currency – the low end of our range, with excellent results in Argentina, Brazil, China, and Tupperware Mexico.

Goings continued, Despite this modest top line result, we once again delivered adjusted earnings above the high-end of our range, demonstrating the dynamic flexibility of our business model, our strong leadership team and how we can navigate through challenging environments with our 3.1 million global sales force and produce consistent solid results.

Third Quarter Executive Summary

  • Third quarter 2016 net sales were $521.8 million, up slightly in dollars and 2% in local currency. Emerging markets**, accounting for 71% of sales, were up 2% in dollars and 5% in local currency. The most significant contributions to the third quarter growth in local currency were in Argentina, Brazil, China, Tupperware Mexico and Tupperware South Africa, partially offset by Egypt, Indonesia and Turkey. Established markets were down 3% in dollars and 5% in local currency, net of a 6% increase in both dollars and local currency in Tupperware United States and Canada.
  • GAAP net income and diluted earnings per share were $48.8 million and $0.96, versus $36.2 million and $0.72 in the prior year, respectively. In 2016, net income includes pre-tax gains of $24.2 million from transactions in connection with real estate being developed adjacent to the Company's Orlando headquarters, versus $2.0 million in 2015. Adjusted, diluted earnings per share of $0.87 was 5 cents above the high-end of the July outlook range, reflecting higher sales in Tupperware North and South America, as well as higher profit in Asia despite the lower sales. Versus 2015, there was a negative 2 cent impact from changes in exchange rates on the diluted earnings per share comparisons, in line with the guidance given in July.
  • Total sales force of 3.1 million was up 2%, with active sellers down 4%, versus prior year.

Third Quarter Business Highlights

Europe: Segment sales down 10% in dollars and 7% in local currency

  • Emerging markets in Europe were down 13% in dollars and 7% in local currency, mainly from continuation of constrained operations in Egypt, as well as the on-going external and business model challenges in Turkey. These decreases were partially offset by Tupperware South Africa, up 15% in dollars and 21% in local currency, and CIS up 7% in dollars and 18% in local currency.
  • Established markets were down 8% in dollars and 7% in local currency, primarily in Austria and Scandinavia. Germany, the largest unit in Europe, was even with the prior year in sales in dollars and local currency.

Asia Pacific: China up double digits, offset by Indonesia, Philippines and Korea

  • Sales for the segment were down 1% in dollars and 4% in local currency.

Emerging Markets in Asia Pacific were down 2% in dollars and 3% in local currency. Indonesia was down 8% in dollars and 14% in local currency, along with Philippines, down 11% in dollars (9% in local currency), in connection with the 2015 fashion category exit, and Korea, down 9% in dollars (13% in local currency), largely due to pursuing fewer business-to-business sales in 2016. These decreases were partially offset by China, up 17% in dollars (23% in local currency), and Malaysia/Singapore, up 5% in dollars and local currency.

Tupperware North America: Tupperware Mexico continued to leverage strong fundamentals, U.S./Canada building strong foundation under new sales force compensation plan

  • Segment sales up 4% in dollars and 9% in local currency. Tupperware Mexico sales down 2% in dollars (up 12% in local currency), with a quarter-end total sales force 10% larger than prior year.
  • Tupperware United States and Canada sales were up 6% in dollars and local currency.

Beauty North America: Segment sales were down 19% in dollars and 11% in local currency

  • BeautiControl sales down 24%, mainly in connection with lower productivity among the career seller base.
  • Fuller Mexico sales were down 18% in dollars and 7% in local currency, reflecting a decrease in sales force size and activity due to lower additions. Total sales force size was down 14%.

South America: Segment sales up 30% in dollars and 33% in local currency driven by Brazil

  • Brazil was up 52% in dollars and 36% in local currency, reflecting higher volume from a 23% advantage in total sellers with increased activity in connection with sales force additions and onboarding, and effective merchandising and marketing campaigns.
  • Sales in Argentina were down 10% in dollars and up 45% in local currency, one-fourth from increased volume/mix and the remainder from inflation-related price increases.
  • Segment's active sales force was up 16%.

Full Year 2016

  • Fiscal year includes a 53rd week estimated to have a positive impact on the year-over-year comparison of 1 point.
  • Tax rate estimated at 27.6% on a U.S. GAAP basis and 25.5% excluding items.
  • Excludes land sales that may occur in the fourth quarter.

Segment Level

  • For the full year, sales are expected to be down 8% in dollars (5 or 6% in local currency) in Europe, down about 1% in dollars (up 1% in local currency) in Asia Pacific, up about 2% in dollars (9% in local currency) in Tupperware North America, down about 20% in dollars (10% in local currency) in Beauty North America and to increase in South America by about 16 or 17% in dollars (30 or 31% in local currency).
  • Segment profit return on sales, excluding items, is expected to decrease in Europe by about 3 points in dollars (about 2 ½ points in local currency), to increase in Asia Pacific about 1 point in dollars and local currency, to increase in Tupperware North America by about ½ point in dollars (about 1 point in local currency), to decrease in Beauty North America by about 3 points in dollars (about 2 ½ points in local currency) and to increase in South America about 3 points in dollars (about 2 points in local currency).

About Tupperware Brands Corporation

Through an independent sales force of 3.1 million, is the leading global marketer of innovative, premium products across multiple brands utilizing social selling. Product brands and categories include design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware brand and beauty and personal care products through the Avroy Shlain, BeautiControl, Fuller Cosmetics, NaturCare, Nutrimetics, and Nuvo brands.

Get more information, facts and figures about Tupperware, click here for the Tupperware overview.

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