Tupperware Brands (NYSE: TUP) reported Q1 EPS of $0.09, $0.47 worse than the analyst estimate of $0.56. Revenue for the quarter came in at $375.9 million versus the consensus estimate of $396.58 million.

First Quarter Financial & Operational Updates

• First quarter sales down 23% versus last year and 17% in local currency1, the comparison includes $15M of B2B sales in the prior year; otherwise, local currency sales would have been down 15%.
• GAAP diluted E.P.S. loss of $0.16 versus income of $0.76 in the prior year period.
• Adjusted* diluted E.P.S. is income of $0.09 vs. $0.80 in the prior year period.
• Negative COVID-19 impact of approximately 500-basis points on sales and loss of $0.24 on GAAP diluted E.P.S.
• Turnaround Plan 2020 target increased 50% to $75 million; first quarter actions expected to contribute $15 million.
• Credit Agreement amended for 2020/21 to increase permitted consolidated leverage ratio (debt-to-Adjusted EBITDA).
• Full year 2020 guidance withdrawn due to material uncertainty of duration and extent of COVID-19 pandemic impact.

Net loss of $7.8 million or $0.16 diluted per share compared with net income of $36.9 million and $0.76 diluted per share last year due to lower sales on a high fixed-cost base with DS&A at 65% of sales. Sandra Harris, Executive Vice President and Chief Financial Officer said, "This level of DS&A is unsustainable at current sales level and is uncharacteristic of a direct selling company, leading us to accelerate our cost savings target to $75 million in 2020."

"We continue to take swift actions to strengthen our business and navigate the uncertainties of COVID-19, including accelerating our planned cost savings from $50 million to $75 million in 2020," said Miguel Fernandez, President and Chief Executive Officer of Tupperware Brands. "Our top priorities are to protect the well-being of our employees and sales force, and to support our operations through the unprecedented challenges we face today. Prior to the disruption caused by the COVID-19 pandemic, the consolidated business was performing in-line with our expectations. This is a pivotal time for Tupperware. I am thrilled to lead this iconic brand into its future, which I believe is going to be exciting."

Rich Goudis, Executive Vice Chairman of Tupperware Brands added, "While it is not possible at this time to estimate the full impact COVID-19 could have on our business in 2020 and beyond, our leadership team continues to make material changes designed to improve our profitability and liquidity position to support our ongoing business in compliance with our debt covenants. Our initiatives to improve our liquidity position remain a near-term priority, and our capital allocation policy of debt repayment and investment in growth underscores our commitment to delivering value for our stakeholders over the long-term."

COVID-19 Impact and 2020 Guidance

During the first quarter of 2020, the impact of COVID-19 on the Company\'s business was most pronounced in Europe and Asia Pacific, where the Company experienced partial or country-wide lockdowns of operations in various markets, including China, France, Italy, and Philippines. The first quarter impact of COVID-19 largely affected March results, specifically in the second half of the month. While the duration and severity of this pandemic is uncertain, the Company expects that its results of operations in the second quarter of 2020 will reflect the most severe impact of the effects of COVID-19, and subsequent periods may also be negatively impacted.

Due to the material uncertainty of the duration and extent of the COVID-19 pandemic impact, the Company is withdrawing the full year 2020 guidance provided in its 2020 Outlook on February 24, 2020.

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