Orlando, Florida-based Tupperware Brands Corp. has reported operating results for the fourth quarter 2017. Net sales were $588.6 million, down 2 percent (4 percent local currency).
On a comparable basis, adjusting for the impacts of the 53rd week in 2016 and the closure of BeautiControl, local currency sales were estimated to be up 3 percent. Emerging markets, accounting for 67 percent of sales, were up 2 percent (1 percent local currency). On a comparable basis, local currency sales in the emerging markets increased 7 percent.
The most significant contributions to the fourth quarter growth in local currency sales were in Brazil, China and Tupperware Mexico, partially offset by India and Indonesia. Established market sales decreased 9 percent (14 percent local currency). On a comparable basis, local currency sales in the established markets decreased 5 percent. The local currency sales decreases were most significant in France, Germany and Italy.
“Our local currency sales came in one point under our October guidance range,” said Chairman and CEO Rick Goings. “Overall, our top line did accelerate on a sequential basis after adjusting for calendar shifts, in connection with having an additional week in the fourth quarter of 2016, and the closure of BeautiControl. China’s significant growth trajectory continued, while Brazil and Tupperware Mexico grew nicely, demonstrating resilience in the face of tough externals coming out of the third quarter of 2017. Adjusted earnings per share was 6 cents above the high-end of our range in local currency after a 1 cent drag from foreign exchange rates versus October guidance.
He continues, “Our re-engineering program to revitalize operations and improve the cost structure, primarily in Europe, continues to progress. Globally, we continue efforts to evolve our relationship-selling business model to include greater access to our powerful brands and innovative products through the use of digital tools, branded contact points and a relevant earning opportunity for our growing sales force of 3.2 million.”
Europe: Emerging markets in Europe were down 2 percent (3 percent local currency), mainly in Tupperware South Africa, down 7 percent (10 percent local currency), partially offset by CIS, up 18 percent (13 percent local currency). Established markets were down 4 percent (13 percent local currency), in part, due to service issues in connection with the pending closure of the French supply chain facility, most significantly in Germany, up 1 percent (down 9 percent local currency), France, down 6 percent (15 percent local currency), and Italy, down 12 percent (20 percent local currency).
Asia: Emerging markets in Asia Pacific were down 1 percent (3 percent local currency), reflecting sales in China, up 33 percent (28 percent local currency) on the strength of significantly more members and continued leveraging of the product portfolio, digital technologies and its 6,100 studios (11 percent advantage over 2016). India was down 19 percent (23 percent local currency), reflecting continued challenges with the salesforce size in light of the government direct selling guidelines, along with a negative 6 percent impact from the goods and services tax effective in July 2017. Indonesia was down 21 percent (20 percent local currency) from fewer active sellers.
North America: Tupperware United States and Canada sales were down 2 percent (3 percent local currency), including a negative timing shift. Tupperware Mexico sales were up 13 percent (10 percent local currency) and Fuller Mexico sales were down 1 percent (5 percent local currency), despite impacts from natural disasters at the end of the third quarter 2017.
South America: Brazil was up 4 percent (5 percent local currency), leveraging a 16 percent salesforce size advantage to overcome challenges in the consumer-spending environment. Sales in Argentina were even with 2016 (up 16 percent local currency). Local currency comparison mainly reflected price increases related to the highly inflationary environment.
To read the full Tupperware Q4 2017 report, click here.
