Tupperware (TUP) reported earnings on Wed 30 Jan 2019 (b/o)

** charts after earnings **

 

Tupperware reports EPS in-line, misses on revs; guides Q1 EPS in-line; guides FY19 EPS below consensus, cuts dividend to redeploy capital towards growth

• Reports Q4 (Dec) earnings of $1.33 per share, in-line with the S&P Capital IQ Consensus of $1.33; revenues fell 14.1% year/year to $505.9 mln vs the $550.53 mln S&P Capital IQ Consensus.
• Tupperware United States and Canada sales were down 8% driven largely by lower recruiting and average active sellers.
• Emerging markets in Asia Pacific were down 16% (11% local currency), primarily in India, down 45% (39% local currency) and Indonesia, down 41% (35% local currency). Both of these units continued to struggle with sales force size.
• Co issues in-line guidance for Q1, sees EPS of $0.90-$0.95 vs. $0.95 S&P Capital IQ Consensus. Sees USD sales growth down 8-10% y/y.
• Co issues downside guidance for FY19, sees EPS of $4.06-$4.21 vs. $4.48 S&P Capital IQ Consensus. Sees local currency sales growth down 2% to flat.
• Cuts Dividend: TUP declares dividend of 27 cents per share but plans to redeploy $80 million in annual dividend payments toward growth and transformation initiatives and potential share repurchases.
• Growth Revitalization Plan: The company expects to invest approximately $100 million through 2022, 90% of which will be in cash. The areas of strategic focus are driving innovation across products, sales force and consumer experiences, extending access to make it easier for sales force and consumers to connect, deploying technology to drive sales force engagement and consumer connections, contemporizing the service model to allow the sales force to focus on driving revenue; and simplifying and streamlining structures to create a more aligned and integrated organization. Once fully implemented, the transformation initiatives are expected to enable annual local currency sales growth of a mid-single digit percentage and to generate about $50 million in annualized savings.
  The company expects to complete the revitalization plan announced in July 2017 during 2019.