Tupperware Brands Nosedives On Dismal Q3 Earnings; Mulls Restructuring Actions

Tupperware Brands Corp TUP reported a third-quarter FY22 sales decline of 20% year-on-year to $302.80 million, missing the consensus of $336.80 million.
The decrease was driven primarily by lower overall sales force activity, continuing lockdowns in China, lower consumer sentiment in Europe and adverse impact to unit volumes due to price elasticity.
Sales in North America fell 16% Y/Y to $86.3 million, South America rose 1% to $70.3 million, Europe decreased 33% to $60.8 million, and Asia dropped 24% to $85.4 million.
The gross profit fell 20.6% to $196.6 million, and the gross margin contracted by 90 basis points to 64.9%.
The operating margin for the quarter was 5.2%, with an operating income of $15.8 million.
The company held $111.6 million in cash and equivalents as of September 24, 2022.
Adjusted EBITDA was $29.9 million versus $77.7 million last year.
Adjusted EPS of $0.14 missed the analyst consensus of $0.46.
CFO Mariela Matute said, "Given the revenue trends year to date, we expect to take additional restructuring actions in the fourth quarter, as well as implementing stringent inventory reduction programs."
As part of the next chapter of the Turnaround Plan, the company promoted Hector Lezama to Chief Commercial Officer (CCO) to oversee its efforts to achieve sustainable growth and profitability.
TUP also revealed substantial doubt about the ability to continue as a going concern due to the volatility in its earnings and progressive tightening of the financial covenants in the First Amendment to the Credit Agreement.
Price Action: TUP shares are trading lower by 41.52% at $4.51 on the last check Wednesday.
Photo Via Company

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