Tupperware Brands Corporation today announced first quarter 2019 operating results.
Tricia Stitzel, President and Chief Executive Officer, commented,
“We delivered local currency sales and earnings per share within our expectations in the first quarter.
Our results included sequential sales and sales force trend improvements in several of our units including France, Germany, Indonesia and Italy, and a five-percentage point sequential sales improvement overall.”
“We are beginning to implement the detailed project plans for transformation initiatives that we announced in January aimed at enabling sales growth and providing some future direct annualized cost savings. In the near term, we are pleased to see sequential improvement in sales as we continue to stabilize the business during this transformation period. We are also making good progress on our access and engagement strategies through studio expansion and digital deployment.”
First Quarter Executive Summary – (Comparisons with First Quarter 2018)
- Net sales were $487.3 million, down 10% (2% local currency). Emerging markets**, accounting for 69% of sales, were down 11% (down 3% local currency). The emerging market operating units with the most significant local currency sales growth in the first quarter were Argentina, China, CIS and Poland, more than offset by significant decreases in Brazil, Fuller Mexico, Malaysia/Singapore, India, Indonesia and Turkey. Established market sales decreased 7% (2% local currency). The local currency sales decreases were most significant in the United States and Canada, partially offset by significant business-to-business (B2B) sales in France and Switzerland.
- GAAP net income and diluted earnings per share were $36.9 million and $0.76, versus net income of $35.7 million and $0.70 in 2018, respectively, primarily reflecting lower unallocated and re-engineering expenses and a lower tax rate, partially offset by lower profit from the segments.
- Adjusted, diluted earnings per share were $0.90 compared with $0.91 in the prior year, up 13% in local currency before an $0.11, or 12%, negative impact from weaker exchange rates. This was within the guidance range provided for the quarter in January 2019, and versus 2018 reflected lower unallocated expenses and a lower tax rate, partially offset by lower profit from three of the segments.
• Total sales force of 3.0 million was down three percent compared with the prior year, and a two-percentage point sequential improvement from the fourth quarter.
First Quarter Business Highlights – (Comparisons with First Quarter 2018)Europe: Segment sales were down 4% (up 8% local currency).
- Emerging markets in Europe decreased 11% (up 5% local currency). Local currency improvement was primarily in CIS, up 1% (16% local currency) and Poland, up 73% (94% local currency).
- Established markets were up 2% (11% local currency), due to significant B2B sales in France and Switzerland.Asia Pacific: Segment sales were down 9% (5% local currency).
• Emerging markets in Asia Pacific were down 8% (4% local currency), primarily in India, down 49% (45% local currency) and Indonesia, down 20% (17% local currency). Both of these units continued to struggle with sales force size. These decreases were partially offset by an increase in China, up 1% (7% local currency).
North America: Segment sales were down 11% (10% local currency).
- Tupperware United States and Canada sales were down 17%, driven largely by lower sales force additions and fewer average active sellers.
- Tupperware Mexico sales were down 3% (1% local currency), due to strong productivity, partially offset by lower average active sellers. Fuller Mexico sales were down 14% (11% local currency) from a lower active sales force. Both units were impacted by a gasoline shortage during the beginning of the quarter, and uncertainty associated with the new government.South America: Segment sales were down 20% (3% local currency).
• Local currency sales decrease primarily from Brazil, down 21% (8% local currency). This reflected the consumer spending environment in connection with political and macro-economic instability. The impact of Brazil was partially offset by Argentina, down 32% in dollars (up 35% local currency), due to price increases in connection with high inflation.
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