Tupperware Brands (NYSE: TUP) reported Q2 EPS of $1.21, $0.04 better than the analyst estimate of $1.17. Revenue for the quarter came in at $588.9 million versus the consensus estimate of $590.59 million.
Rick Goings, Chairman and CEO, commented, "Second quarter sales results were up 4% in local currency, just marginally below the low end of our guidance. While we continue to see strong performances in Argentina, Brazil, China, and Tupperware U.S. and Canada, the actions taken to improve performance in Indonesia gave us a smaller sequential improvement in the quarter than we had expected. Even so, we were able to come in above the high end of our diluted earnings per share range, reflecting strengthening of our value chain."
Goings continued, "Our strong global management team continues to enhance and execute the levers of our business model to support and enable the growth of our 3.0 million global sales force. We also remain focused on the execution of our strategies to contemporize the business model, strengthen our core business fundamentals and extend our reach to continue to provide value to all of our stakeholders."
2015 Outlook (Unaudited)
Based on current business trends and foreign currency rates, the Company's third quarter and fiscal 2015 full year guidance is provided below.
Company Level
| | 13 Weeks Ended | | 13 Weeks | | 52 Weeks Ended | | 52 Weeks |
| | Sept. 26, 2015 | | Ended | | Dec 26, 2015 | | Ended |
| | Low | High | | Sept 27, 2014 | | Low | High | | Dec 27, 2014 |
| | | | | | | | | | |
USD Sales Growth vs Prior Year | (11) | % | (10) | % | | (2) | % | | (11) | % | (10) | % | | (2) | % |
GAAP EPS | $0.57 | | $0.62 | | | $0.63 | | | $3.77 | | $3.87 | | | $4.20 | |
GAAP Pre-Tax ROS | 7.9 | % | 8.4 | % | | 8.1 | % | | 11.4 | % | 11.6 | % | | 11.4 | % |
| | | | | | | | | | |
Local Currency+ Sales Growth vs Prior Year | 4 | % | 6 | % | | 4 | % | | 4 | % | 5 | % | | 5 | % |
EPS Excluding Items* | $0.69 | | $0.74 | | | $0.90 | | | $4.42 | | $4.52 | | | $5.38 | |
Pre-Tax ROS Excluding Items* | 9.0 | % | 9.4 | % | | 10.2 | % | | 12.8 | % | 13.0 | % | | 13.9 | % |
| | | | | | | | | | |
FX Impact on EPS Comparison (a) | ($0.22) | | ($0.22) | | | | | ($1.22) | | ($1.22) | | |
ull year 2015
- Tax rate excluding items is expected to be 25.5%, and 28.3% on a U.S. GAAP basis.
- Excludes land sales that may occur in the second half of the year.
- Venezuela:
- For full year 2015, in the table above, of the $1.22 negative year-over-year impact of changes in rates on diluted earnings per share, 28 cents relates to weaker rates for the Venezuelan bolivar. The bolivar to U.S. dollar exchange rate used in translating the Company's first quarter 2014 operating activity was 6.3 bolivars to the U.S. dollar, was 10.8 bolivars to the U.S. dollar in the second quarter and was 50.0 in the second half of 2014 and January 2015.
- The Venezuelan government launched in February 2015, the Marginal Currency System, or Simadi, whose rate was approximately 200 bolivars to the U.S. dollar as of July 20, 2015. The Company used the Simadi rate to translate its February through June 2015 operating activity and has assumed it will use the Simadi rate to translate its future operating activity.
- As a unit accounted for as hyperinflationary under U.S. GAAP, Venezuela's functional currency is the U.S. dollar and the impact of changes in the bolivar to U.S. dollar exchange rate on the unit's net monetary assets are reflected as a transactional impact in the Company's net income rather than as a cumulative translation adjustment. Assuming that the current Simadi exchange rate of approximately 200 continues for the remainder of 2015, there will be a negative translation impact from Venezuela on the Company's sales comparisons of 0.7 percentage points in the third quarter and 2.3 percentage points for the full year, and a negative impact on the diluted earnings per share comparisons with 2014 in the third quarter, and full year of 1 cent, and 28 cents, respectively.
- Third quarter and fourth quarter 2014 sales in Venezuela were $5 million each and $67 million in full year 2014. Third quarter, fourth quarter and full year 2014 segment profit in Venezuela was $1 million, $0.6 million, and $20 million, respectively.
Segment Level
- For the full year, sales in local currency are expected to be up slightly in Europe, up low single digit in Asia Pacific, up mid-single digit in Tupperware North America, down low single digit in Beauty North America and up in the mid 20s% in South America.
- Pre-tax return on sales without items for the full year, versus 2014, is expected to be down about 1 point in Europe, even in Asia Pacific, down 0.5 points in dollars and even in local currency in Tupperware North America, up about 1.5 points in dollars and about 2.5 points in local currency in Beauty North America, and up about 0.5 points in dollars and about 3.5 points in local currency in South America.
Full Year 2016 Sales Guidance
The Company continues to believe that it will grow its sales annually in local currency in the longer term by 6 to 8%, comprised of about 10% growth by its emerging market units and low single digit growth by its established market units. The Company expects to give its initial specific guidance for 2016 sales in October, which will reflect then current sales force size comparisons, business unit trends, expectation for benefits of implementing its strategies and the external environment.
For earnings history and earnings-related data on Tupperware Brands (TUP) click here.
