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October 26, 2017

U.S. News

Tupperware Third Quarter Sales Up 3% Over last Year

Tupperware Brands Corp. yesterday announced third quarter 2017 operating results. Net sales were $539.5 million, up 3 percent (2 percent local currency). Emerging markets, accounting for 71 percent of sales, were up 4 percent (3 percent local currency).

The most significant contributions to the third quarter growth in local currency were in Brazil and China, partially offset by India and Indonesia. Established market sales increased 3 percent (decreased 1 percent local currency). Contributing to the local currency sales decrease were France, Germany and Nutrimetics Australia, partially offset by Beauticontrol and the United States and Canada.

Rick Goings, Chairman and CEO, said, “In the face of significant challenges in externals across many parts of the portfolio, I am pleased to report that we grew local currency sales 2 percent in the third quarter, which is the mid-point of our July guidance range. China was the stand-out in the quarter, growing 33 percent. Profitability exceeded expectations with adjusted earnings per share coming in 7 cents above the high-end of our range in local currency before a 1 cent drag from foreign exchange rates versus July guidance and 18 percent above last year.”

Goings continued, “Our restructuring program, much of which relates to improvement actions in Europe, is on track, while we are also focused on strategies to reignite revenue growth in key markets, particularly India and Indonesia. Moving forward, our local management teams, highly experienced in our direct selling fundamentals, will continue to navigate these challenging externals as we evolve the business model to fully leverage our strong aspirational brand, providing an earning opportunity for our 3.2 million global salesforce.”

Total salesforce of 3.2 million was up 4 percent. This was a 1-point sequential improvement from the end of the second quarter, including a 2-point negative impact from removing the Beauticontrol salesforce. Average active sellers in the third quarter were down 4 percent. This was a 3-point improvement from the second quarter.

In Europe, segment sales were up 3 percent (down 2 percent local currency). Emerging markets in Europe were up 9 percent (7 percent local currency), mainly in CIS, up 23 percent (13 percent local currency) and Tupperware South Africa, up 12 percent (7 percent local currency). Established markets were down 1 percent (7 percent local currency), primarily in France, which was down 19 percent (24 percent local currency), and Germany was down 2 percent (8 percent local currency).

In Asia Pacific, segment sales were down 2 percent (1 percent local currency). Emerging markets in Asia Pacific were down 2 percent (even in local currency), reflecting sales in China, up 33 percent on the strength of 62 percent more members and continued leveraging of the product portfolio, digital technologies and its 5,900 studios (7 percent advantage over 2016). This was offset by decreases in India, down 30 percent (32 percent local currency), reflecting challenges in reaching a salesforce size advantage under the government direct selling guidelines, along with a negative 6 percent impact from a new goods and services tax effective in July, as well as in Indonesia, which was down 18 percent (17 percent local currency) from fewer active sellers. The segment’s total salesforce was 3 percent lower year-over-year, primarily reflecting a negative 6 percentage point impact from the comparison in India. 

For Tupperware North America, segment sales were up 7 percent (4 percent local currency). Tupperware United States and Canada sales were up 8 percent (7 percent local currency). Tupperware Mexico sales were up 9 percent (3 percent local currency), despite the impact from natural disasters during the quarter.

For Beauty North America, segment sales were up 3 percent (down 1 percent local currency). Beauticontrol sales were up 25 percent, or $2.5 million, in connection with salesforce stocking during the wind-down period. Beauticontrol lost $3.2 million, $0.9 million and $2.6 million in the third and fourth quarters of 2016 and first seven months of 2017, respectively. It had $9.8 million and $11.5 million of sales in the third and fourth quarters of 2016 and $30.9 million the first nine months of 2017. Fuller Mexico sales were down 4 percent (9 percent local currency), including disruption from natural disasters during the quarter.

In South America, Brazil continued to drive segment sales growth of 12 percent (13 percent local currency). Brazil was up 11 percent (8 percent local currency), leveraging a 15 percent salesforce size advantage to overcome challenges in the consumer spending environment and lower salesforce additions in light of credit scores of some potential sellers. Sales in Argentina were up 12 percent (31 percent local currency) mainly from price increases related to the highly inflationary environment.

To see the full Tupperware Q3 report, click here.