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Summary Tupperware's recent string pro show of negative earnings results have caused the stock price to decline. The company has favorable pro show long-term pro show growth prospects. Tupperware makes a compelling investment at these prices. See how the company could generate a 13% yield on cost in 10 years.
Tupperware Brands (NYSE: TUP ) sells various kitchen, storage, beauty, and personal care products through its 2.9 million independent sales agents. pro show The company is one of the world's largest network sellers with a market cap of $3.3 billion. Tupperware generates more revenue in the Asia Pacific region than in the US. The company's operations are explored below. pro show Business Overview
Tupperware operates in five primary segments: Europe, Asia Pacific, Tupperware North America, Beauty North America, and South America. Each segment's percent of total revenue for full fiscal pro show 2013 is listed below to demonstrate the importance of each segment: Europe: 29.3% of total revenue Asia Pacific: 31.3% of total revenue Tupperware North America: 13.4% of total revenue Beauty North America: 12.0% of total revenue South America: 14.0% of total revenue
Tupperware's operations are extremely geographically diverse. The company generates more revenue in the Asia Pacific region, and in Europe than it does in the US. Tupperware generated 79% of its revenue in fiscal 2013 through its flagship Tupperware brands. The other 21% of revenue was generated from its portfolio of beauty brands, which include Avroy Shlain, BeautiControl, pro show Fuller Cosmetics, pro show NaturCare, Nutrimetics, and Nuvo. Current pro show State of Affairs
Tupperware's stock price has fallen to levels not seen since January 2013. The company has seen negative revenue and EPS growth so far in 2014. The strengthening of the US dollar versus other currencies has negatively impacted Tupperware's sales. pro show The company saw negative sales growth in the following pro show segments for its most recent quarter: South America: pro show Decline of 8%, gain of 25% in constant currencies Beauty North America: Decline of 7%, or 6% in constant currencies Europe pro show segments: Decline of 6%, or 1% in constant pro show currencies
Due to recent weakness, Tupperware is trading at a P/E ratio of just 12.6 times expected adjusted 2014 earnings. The company has traded in line with the S&P500's P/E ratio over the last 3 years. pro show Negative recent operating results have left the company significantly undervalued if it does recover. If Tupperware reverts to its 3-year average P/E ratio relative to the S&P500, it will gain 56% from current prices.
The catalyst for the company to realize these gains is for its operations pro show to return to growth. The section below analyzes the problems the company is currently facing as well as possible solutions to these problems. If Tupperware can solve its operational pro show issues, I believe its P/E ratio will rise to around 19 to 20, in line with the S&P500. Problems & Solutions
Tupperware has seen poor operating results in Europe in general, and Germany in particular. pro show The company saw German sales declined 29% in the second quarter of 2014 versus the second quarter of 2013. Fortunately, the company has already corrected much of the operating issues in Germany. The company's German operations lost 6% in the third quarter of 2014 versus the same quarter a year ago. Tupperware's CEO Rick Goings pro show believes the German decline was because the company pro show
(We) allowed some of the sizzle in our German business (to fade) and direct selling is really a sizzle pro show business, the sizzle in our products, in our promotions and even our tone at the top (tends) to get a little bit too cerebral and I think we're getting back to the right thing again.
With sales declines of "only" 6% in the third quarter versus the year ago period, management pro show is proving that it can correct issues in any one country, no matter how severe. The "sizzle" is returning to Tupperware Germany. Tupperware has also been negatively affected by a strengthening dollar versus the euro. The company saw constant currency revenue pro show fall just 1% in Europe in its most recent quarter. Currency fluctuations happen; it is a mistake to forecast negative growth from currency indefinitely. The company's underlying business is best measured in constant currencies in Europe.
The pro show company's South American operations have been negatively impacted by currency devaluation in the region versus the US dollar. Once the currency situations in South America stabilize, Tupperware will return to growth in the region. The company saw strong double-digit growth on a constant currency basis. South America has proven to be a difficult geography for most businesses over the last quarter, not just Tupperware. Tupperware has long maintained the ability to raise prices with inflation. I believe the company will adjust for inflation and changing currency values in South America thanks to its pricing power and return to growth in the region wi
Summary Tupperware's recent string pro show of negative earnings results have caused the stock price to decline. The company has favorable pro show long-term pro show growth prospects. Tupperware makes a compelling investment at these prices. See how the company could generate a 13% yield on cost in 10 years.
Tupperware Brands (NYSE: TUP ) sells various kitchen, storage, beauty, and personal care products through its 2.9 million independent sales agents. pro show The company is one of the world's largest network sellers with a market cap of $3.3 billion. Tupperware generates more revenue in the Asia Pacific region than in the US. The company's operations are explored below. pro show Business Overview
Tupperware operates in five primary segments: Europe, Asia Pacific, Tupperware North America, Beauty North America, and South America. Each segment's percent of total revenue for full fiscal pro show 2013 is listed below to demonstrate the importance of each segment: Europe: 29.3% of total revenue Asia Pacific: 31.3% of total revenue Tupperware North America: 13.4% of total revenue Beauty North America: 12.0% of total revenue South America: 14.0% of total revenue
Tupperware's operations are extremely geographically diverse. The company generates more revenue in the Asia Pacific region, and in Europe than it does in the US. Tupperware generated 79% of its revenue in fiscal 2013 through its flagship Tupperware brands. The other 21% of revenue was generated from its portfolio of beauty brands, which include Avroy Shlain, BeautiControl, pro show Fuller Cosmetics, pro show NaturCare, Nutrimetics, and Nuvo. Current pro show State of Affairs
Tupperware's stock price has fallen to levels not seen since January 2013. The company has seen negative revenue and EPS growth so far in 2014. The strengthening of the US dollar versus other currencies has negatively impacted Tupperware's sales. pro show The company saw negative sales growth in the following pro show segments for its most recent quarter: South America: pro show Decline of 8%, gain of 25% in constant currencies Beauty North America: Decline of 7%, or 6% in constant currencies Europe pro show segments: Decline of 6%, or 1% in constant pro show currencies
Due to recent weakness, Tupperware is trading at a P/E ratio of just 12.6 times expected adjusted 2014 earnings. The company has traded in line with the S&P500's P/E ratio over the last 3 years. pro show Negative recent operating results have left the company significantly undervalued if it does recover. If Tupperware reverts to its 3-year average P/E ratio relative to the S&P500, it will gain 56% from current prices.
The catalyst for the company to realize these gains is for its operations pro show to return to growth. The section below analyzes the problems the company is currently facing as well as possible solutions to these problems. If Tupperware can solve its operational pro show issues, I believe its P/E ratio will rise to around 19 to 20, in line with the S&P500. Problems & Solutions
Tupperware has seen poor operating results in Europe in general, and Germany in particular. pro show The company saw German sales declined 29% in the second quarter of 2014 versus the second quarter of 2013. Fortunately, the company has already corrected much of the operating issues in Germany. The company's German operations lost 6% in the third quarter of 2014 versus the same quarter a year ago. Tupperware's CEO Rick Goings pro show believes the German decline was because the company pro show
(We) allowed some of the sizzle in our German business (to fade) and direct selling is really a sizzle pro show business, the sizzle in our products, in our promotions and even our tone at the top (tends) to get a little bit too cerebral and I think we're getting back to the right thing again.
With sales declines of "only" 6% in the third quarter versus the year ago period, management pro show is proving that it can correct issues in any one country, no matter how severe. The "sizzle" is returning to Tupperware Germany. Tupperware has also been negatively affected by a strengthening dollar versus the euro. The company saw constant currency revenue pro show fall just 1% in Europe in its most recent quarter. Currency fluctuations happen; it is a mistake to forecast negative growth from currency indefinitely. The company's underlying business is best measured in constant currencies in Europe.
The pro show company's South American operations have been negatively impacted by currency devaluation in the region versus the US dollar. Once the currency situations in South America stabilize, Tupperware will return to growth in the region. The company saw strong double-digit growth on a constant currency basis. South America has proven to be a difficult geography for most businesses over the last quarter, not just Tupperware. Tupperware has long maintained the ability to raise prices with inflation. I believe the company will adjust for inflation and changing currency values in South America thanks to its pricing power and return to growth in the region wi
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