Tupperware stock fell 5 percent in early trading after the house wares maker lowered expectations for the beginning of 2017.
The dismal forecast came as Orlando-based Tupperware Brands Corp. (NYSE: TUP) turned in fourth quarter and year-end earnings Wednesday. CEO Rick Goings said Tupper struggled in the fourth quarter with economic and political instability int foreign markets, but still improved sales during the quarter, partially helped by an extra week in its fiscal reporting period.
Tupperware sales were up 1.4 percent compared to the fourth quarter of 2015, bringing in $600.9 million.
The direct seller of plastic storage and beauty products depends heavily on emerging markets such as those in Asia, Mexico and South America.
Lower delivery, sales and administrative expenses helped boost net income to $79 million in the quarter, up from $58.1 million a year ago. Earnings per share were $1.45, about 8 cents better than Wall Street estimates.
But Tupperware executives lowered expectations for the first year, expecting sales growth of just 0 to 2 percent. They said sales are expected to drop in Europe and Asia. Asia has been one of its biggest growth markets in recent years.
For 2016, Tupperware sales slipped as sales dropped 3 percent, even with that extra week. Net income increased to $223.6 million from $185.8 million.
"We experienced a challenging fourth quarter to cap off an already tough 2016,” said Goings in a statement. “Despite the impact of further economic and political instabilities, our businesses in emerging markets continued on a growth trajectory in the fourth quarter with outstanding results in Argentina, Brazil, China and Tupperware South Africa."
Analyst Neil Saunders, managing director of GlobalData Retail, said Tupperware didn’t live up to expectations, especially in Asia, Europe and Mexico.
“Looking ahead, we expect steady, but not spectacular, progress in 2017,” he said in a statement.
However, Saunders said he was impressed the 68-year-old company improved sales in North America.
“Most encouraging are the United States and Canada, where sales rose by 8 percent,” he said. “Although this result is enhanced by the additional week of trade, it still represents progress in markets that are both mature and saturated.”
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