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A Look at Tupperware Brands’ 3Q16 Performance

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Price movement

Tupperware Brands (TUP) has a market cap of $3.1 billion. It fell 4.7% to close at $61.57 per share on October 19, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -4.6%, -1.7%, and 14.6%, respectively, on the same day. TUP is trading 5.0% below its 20-day moving average, 4.4% below its 50-day moving average, and 8.6% above its 200-day moving average.

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Related ETF and peers

The Vanguard Small-Cap Value ETF (VBR) invests 0.15% of its holdings in Tupperware. The ETF aims to track the CRSP US Small Cap Value Index. The index selects from a list of stocks in the 85%–99% market cap range, based on five value factors. The YTD price movement of VBR was 12.1% on October 19.

The market caps of Tupperware’s competitors are as follows:

  • Newell Brands (NWL) — $25.3 billion
  • Fortune Brands Home & Security (FBHS) — $8.3 billion
  • Nu Skin Enterprises (NUS) — $3.6 billion

Performance of Tupperware Brands in fiscal 3Q16

Tupperware Brands reported fiscal 3Q16 net sales of $521.8 million, a rise of 0.15% over the net sales of $521.0 million in fiscal 3Q15. Net sales of the Europe, Beauty North America, and Asia-Pacific segments fell 9.8%, 19.3%, and 1.3%, respectively, and net sales of the South America and TW North America segments rose 30.4% and 3.8%, respectively, between fiscal 3Q15 and fiscal 3Q16. The company’s gross profit margin and operating margin rose 80 basis points and 560 basis points, respectively. It reported gains on disposal of assets of $24.2 million in fiscal 3Q16, compared with $2.0 million in fiscal 3Q15.

Its net income and EPS (earnings per share) rose to $48.8 million and $0.96, respectively, in fiscal 3Q16, compared with $36.2 million and $0.72, respectively, in fiscal 3Q15.

Tupperware Brands’ cash and cash equivalents rose 23.4% between fiscal 4Q15 and fiscal 3Q16. Its current ratio rose to 1.0x and its long-term debt-to-equity ratio fell to 3.2x in fiscal 3Q16, compared with 0.90x and 3.8x, respectively, in fiscal 4Q15.

Projections

Tupperware has made the following projections for fiscal 4Q16:

  • US dollar sales growth in the range of 5% to 7%
  • EPS in the range of $1.34 to $1.39
  • local currency sales growth in the range of 4% to 6%

The company has made the following projections for fiscal 2016:

  • US dollar sales growth of approximately -2%
  • EPS in the range of $4.20 to $4.25
  • local currency sales growth of ~3%
  • tax rate of ~27.6% on a GAAP (generally accepted accounting principles) basis

Next, we’ll look at Packaging Corporation of America (PKG).

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