ORLANDO, Fla., April 9, 2018 /PRNewswire/ -- (NYSE:
TUP) Tupperware Brands Corporation (the "Company") today
updated its first quarter 2018 guidance.
Revenue for the first quarter of 2018 is expected to have
decreased 2% (6% in local currency+) versus the prior
year, which would be 3-points below the low end of the Company's
previous guidance range in dollars and local currency. As a result,
and also reflecting an approximate 6-cent impact from a higher than previously
foreseen income tax rate related to the U.S. Tax Cuts and Jobs Act
of 2017 (the "Tax Act"), the Company has updated its first quarter
2018 EPS without items* range to $0.87 to $0.92 from
$1.01 to $1.06.
The most significant factors negatively impacting the first
quarter of 2018, versus previous guidance, were:
- Customer service issues associated with the now closed French
manufacturing and distribution facility had a larger than
previously foreseen impact on sales, most significantly in
France and Germany. Any ongoing impact is expected to be
much less significant;
- In Indonesia, sales were lower
than expected as key strategies have yet to gain traction;
- In Brazil, there were issues
in the supply chain impacting product availability, including a
customs strike, the over sell of certain items, and quality issues
with a third party produced item. These factors negatively impacted
sales and the number of sales force additions and new sales force
leaders promoted; and
- The change in the tax rate that relates to the Global
Intangible Low-Taxed Income ("GILTI") tax. GILTI is currently
expected to negatively impact full-year earnings per share by
35 cents compared with previous
guidance, although it is not expected to impact cash flow. As the
rules around recording the impact of GILTI are not yet clear, the
currently estimated impact could change significantly as the year
moves forward. If it does change, the Company expects it more
likely to be lower than higher.
Rick Goings, Chairman and CEO,
commented, "While overall we are disappointed with the results of
the first quarter, we were pleased with continued good performance
in China, Mexico, Malaysia/Singapore, South
Africa, the United States
& Canada and others. We
also returned to solid growth at Fuller Mexico, our largest beauty
unit. We had expected challenges related to the closure of our
French manufacturing facility, but the collateral impacts ran
deeper than anticipated. That said, our actions under our
revitalization plan are necessary to evolve our business on a
number of fronts to leverage our growth opportunity and generate
the return we, and our shareholders, expect. In Indonesia, we continue scaling-up a number of
newer initiatives that we expect will lead to better performance in
time, and we have also installed a new managing director during the
first quarter. Brazil had an
unusual number of external factors that hurt our momentum. We
expect these issues to be temporary, as our strong management team
in Brazil has identified, and is
addressing, the key issues."
Goings continued, "More broadly, we have confidence in how our
business will perform going forward, as we continue 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 sales force."
Revised Outlook - Second Quarter and Full Year 2018
While the Company will provide a more complete update of its
guidance through its earnings release and conference call on
April 25, 2018, it currently expects
second quarter sales modestly lower than previously foreseen and no
change from its previous expectations in the second half of the
year. Its cash flow guidance is expected to increase in light
of the sale of excess assets under its revitalization plan.
* See Non-GAAP Financial Measures discussion below.
+ Local currency changes are measured by comparing current year
results with those of the prior year translated at the current
year's foreign exchange rates.
First Quarter Earnings Conference Call
Tupperware Brands will release its first quarter 2018 earnings
on Wednesday, April 25, 2018, and
conduct a conference call that day at 8:30
am Eastern time. The conference call will be webcast and
accessible, along with a copy of the news release and slides
presented during the conference call, on
www.tupperwarebrands.com.
Tupperware Brands Corporation, through an independent
sales force of 3.2 million, is the leading global marketer of
innovative, premium products across multiple brands utilizing
social selling. Product brands and categories include
design-centric preparation, storage and serving solutions for the
kitchen and home through the Tupperware brand and beauty and
personal care products through the Avroy Shlain, Fuller Cosmetics,
NaturCare, Nutrimetics and Nuvo brands.
The Company's stock is listed on the New York Stock Exchange
(NYSE: TUP). Statements contained in this release, which are not
historical fact and use predictive words such as "estimates",
"outlook", "guidance", "expects", "target" or "will" are
forward-looking statements. These statements involve risks
and uncertainties that include impairment and other charges related
to purchase accounting goodwill and restructuring actions,
enactment related and ongoing impacts related to the Tax Act,
including the GILTI tax, recruiting and activity of the Company's
independent sales forces relating to governmental actions and
otherwise, the success of new product introductions and promotional
programs, governmental approvals of materials for use in food
containers and beauty, personal care nutraceutical products, the
success of buyers in obtaining financing or attracting tenants for
commercial and residential developments, the effects of economic
and political conditions generally and foreign exchange risk in
particular and other risks detailed in the Company's periodic
reports as filed in accordance with the Securities Exchange Act of
1934, as amended.
Non-GAAP Financial Measures
The Company has utilized non-GAAP financial measures in this
release, which are provided to assist readers' understanding of the
Company's results of operations compared with the outlook provided
in the Company's fourth quarter 2017 earnings release on
January 31, 2018. As the Company has
not completed its financial reporting and review processes for the
quarter ended March 31, 2018, GAAP
net income per diluted share for the period ended March 31, 2018 is not available.
Non-GAAP financial measures exclude certain items that at times
materially impact the comparability of the Company's results of
operations. The adjusted information is intended to be indicative
of the Company's primary operations, and to assist readers in
evaluating performance and analyzing trends across periods. These
measures should be considered in addition to, not as a substitute
for, results reported in accordance with GAAP.
The non-GAAP financial measures exclude gains from the
sale of property, plant and equipment and insurance settlements
related to casualty losses, other income in connection with real
estate related operations, inventory obsolescence and operating
losses in conjunction with decisions to exit, wind-down or
significantly restructure businesses along with asset sales related
to exited businesses, certain asset retirement obligations,
re-engineering including the exit of businesses and fixed asset
impairment charges, pension settlements and significant discrete
impacts of new tax laws upon adoption. While the Company is
engaged in a multi-year program to sell land adjacent to its
Orlando, Florida headquarters, and
also disposes of other excess land and facilities periodically,
these activities are not part of its primary business
operations. Additionally, amounts recognized in any given
period are not indicative of amounts that may be recognized in any
particular future period. For this reason, these
amounts are excluded as indicated. The Company excludes
significant charges related to casualty losses caused by
significant weather events, fires or similar circumstances. It also
excludes any related gains resulting from the settlement of
associated insurance claims. While these types of events can and do
recur periodically, they are excluded from indicated financial
information due to their distinction from ongoing business
operations, inherent volatility and impact on the comparability of
earnings across periods. The Company periodically records exit
costs accounted for using the applicable accounting guidance for
exit or disposal cost obligations and other amounts related to
rationalizing its supply chain operations and other re-engineering
activities, including the exit of businesses and upon liquidation
of operations in a country, the recognition in income of amounts
previously recorded in equity as a cumulative translation
adjustment. Also, the Company excludes the impact of changes in tax
laws on cumulative deferred taxes from items previously recorded as
cumulative translation adjustments. The Company believes these
amounts are similarly volatile and impact the comparability of
earnings across periods. Therefore, they are also excluded from
indicated financial information to provide what the Company
believes represents a useful measure for analysis and predictive
purposes.
The Company believes that excluding from reported financial
information costs incurred in connection with a significant change
in its capital structure that is of a nature that would be expected
to recur sporadically, also provides a useful measure for analysis
and predictive purposes. The Venezuelan government over the last
several years has severely restricted the ability to translate
bolivars into U.S. dollars. Due to volatility in changes in the
mandated exchange rates, the Company's non-GAAP measures exclude
for analysis and predictive purposes, the impact from devaluations
on the bolivar denominated net monetary assets and other balance
sheet positions that impact near term income, since they appear in
the income statement at the exchange rate at which they were
originally translated rather than the exchange rate at which
current operating activity is being translated.
The Company has also elected to present financial measures
excluding the impact of amortizing the purchase accounting carrying
value of certain definite-lived intangible assets, primarily the
value of its Fuller trade name recorded in connection with the
Company's December 2005 acquisition
of the direct selling businesses of Sara Lee Corporation. The
amortization expense related to these assets will continue for
several years. Similarly, in connection with its evaluation
of the carrying value of acquired intangible assets and goodwill,
the Company has periodically recognized impairment charges.
The Company believes that these types of non-cash charges will not
be representative in any single reporting period of amounts
recorded in prior reporting periods or expected to be recorded in
future reporting periods. Therefore, they are excluded from
indicated financial information to also provide a useful measure
for analysis and predictive purposes.
As the impact of changes in exchange rates is an important
factor in understanding period-to-period comparisons, the Company
believes the presentation of results on a local currency basis, in
addition to reported results, helps improve readers' ability to
understand the Company's operating results and evaluate performance
in comparison with prior periods. The Company presents local
currency information that compares results between periods as if
current period exchange rates had been the exchange rates in the
prior period. The Company uses results on a local currency basis as
one measure to evaluate performance. The Company generally refers
to such amounts as calculated on a local currency basis, as
restated or excluding the impact of foreign currency. These results
should be considered in addition to, not as a substitute for,
results reported in accordance with GAAP. Results on a local
currency basis may not be comparable to similarly titled measures
used by other companies and are not measures of performance
presented in accordance with GAAP.
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SOURCE Tupperware Brands Corporation