Tupperware Brands Corporation (NYSE:TUP) announced first quarter 2016 operating results.
Rick Goings, Chairman and CEO, commented, “First quarter sales were up 1% in local currency. While we continued to achieve strong performances in Argentina, Brazil, China, Tupperware Mexico and Tupperware U.S. and Canada, we have continued to need to navigate through economic and political headwinds. Even so, we were able to come in above the high end of our diluted earnings per share range, reflecting lower resin costs and our initiatives to manage costs, gross margin and leverage under our promotional programs, as well as improved exchange rates.”
First Quarter Executive Summary
- First quarter 2016 net sales were $525.7 million, up 1% in local currency and down 10% in dollars. Emerging markets**, accounting for 64% of sales, achieved a 3% increase in local currency. The most significant contributions to the first quarter growth were in Argentina, Brazil, China, and Tupperware Mexico, partially offset by Egypt, Indonesia, Philippines and Turkey. Established markets were down 2% in local currency, primarily from BeautiControl and France, partially offset by good performance in Germany and Tupperware United States and Canada.
- GAAP net income of $43.4 million versus prior year net income of $29.5 million. In 2015, net income included a pre-tax, non-cash impairment charge related to fixed assets in Venezuela. Adjusted, diluted earnings per share of $0.91 was 5 cents above the January outlook range, including 4 cents from the benefit of changes in foreign exchange rates versus 2015, compared with the guidance, lower resin costs and initiatives to control costs, manage gross margin and leverage promotional spending. Adjusted earnings per share was down 11% versus last year in dollars, including a negative 19 cent impact from changes in exchange rates on the comparison, and up 10% in local currency.
- Total sales force of 3.0 million was up 4% versus prior year at the end of the quarter, and there were 2% less active sellers in the quarter.
First Quarter Business Highlights
Europe: Strong increases by two South African businesses, offset by Egypt and Turkey
- Segment sales were down 4% in local currency (down 11% in dollars).
- Emerging markets were down 8% in local currency. Tupperware South Africa, up 18% and Avroy Shlain in South Africa, up 13%, offset by a 67% decrease in the Middle East and North Africa, mainly from a curtailment of shipments into Egypt in light of currency controls, and Turkey, down 19%.
- Established markets were down 2% in local currency. Germany, up 3%, was offset by Austria, down 15% and France, down 4%, both with smaller and less active sales forces.
Asia Pacific: China up double-digits offset by results in India, Indonesia, and Philippines
- Sales for the segment were down 3% in local currency (down 9% in dollars).
- Emerging Markets were down 3% in local currency. China, up 16% was offset by India, down 15%, Indonesia, down 8% and Philippines, down 14%, in connection with the 2015 decision to exit the fashion category.
- Established markets were down 6% in local currency compared with prior year.
Tupperware Brands Corporation earnings per share showed a decreasing trend of -12.3% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 468%.Analysts project EPS growth over the next 5 years at 12%. It has EPS annual growth over the past 5 fiscal years of 0.9% when sales declined -0.1. It reported -9.6% sales drop, and 46.2% EPS growth in the last quarter.
The stock is trading at $56.58, up 34.46% from 52-week low of $42.6. The stock trades down -13.27% from its peak of $67.74 and 5.39% above the consensus price target of $59.63. Its volume clocked up at 0.56 million shares which is lower than the average volume of 0.68 million shares. Its market capitalization currently stands at $2.85B.
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