- Tupperware Brands Corp TUP reported a preliminary fourth-quarter FY22 sales decline of 20% year-on-year to $313.70 million, beating the consensus of $295.34 million.
- In North America, net sales fell 20% as the effect of pricing and compensation plan actions resulted in lower sales than expected.
- Asia Pacific net sales plunged 22% as China continued to be adversely impacted by COVID. Although strict lockdowns earlier in the quarter were reversed later, the company noted that the supply chain was affected by pandemic-related employee absences.
- Gross profit fell 49.6% to $196.5 million, and the gross margin expanded by 100 basis points to 62.6%.
- Operating loss from continuing operations for the quarter was $(35.2) million, and Adjusted EBITDA was $24.4 million.
- Adjusted EPS of $(0.24) missed the analyst consensus of $0.29.
- The company held $120.2 million in cash and equivalents as of Dec. 31, 2022. It ended the year with $705.4 million in total debt, slightly below the $709.4 million at the end of 2021.
- Considering the additional flexibility provided by the Third Amendment entered on Feb. 22, 2023, the company anticipates that it will remain compliant with financial covenants associated with the Credit Agreement for the year following the issuance of the financial statements.
- Prior Period Misstatements: Tupperware said it is in the process of finalizing its financial close process as of and for the fourth quarter and year ended Dec. 31, 2022.
- TUP has identified misstatements that originated in prior annual and unaudited interim periods.
- In addition, the company concluded that it did not design and maintain effective internal controls related to the accounting for the completeness, occurrence, accuracy, and presentation of the income tax provision and related income tax assets and liabilities.
- Therefore, in the 2022 Form 10-K, the company will disclose a material weakness in internal control over financial reporting.
- Also Read: Why Tupperware Brands Stock Is Tanking Today: 'We Expect 2023 To Be A Transition Year'
- Price Action: TUP shares are trading lower by 20.24% at $3.27 on the last check Wednesday.
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