Written by Brenda Nakalema

Tupperware Withdraws Its Outlook Amidst Operational Uncertainty

Shares of Tupperware brands (ticker: TUP) dived after the company released lower-than-expected earnings and withdrew guidance for the year. According …

Shares of Tupperware brands (ticker: TUP) dived after the company released lower-than-expected earnings and withdrew guidance for the year. According to FactSet, the company’s net sales for the quarter dropped 16% year over year to $348.1 million, falling below estimates calling for $357 million.

According to released data, adjusted earnings per share stood at 12 cents, far below the 52 cent expectation. The company blamed the poor performance on Covid-19 lockdowns in China, rising input costs, and sales impacts related to the Russian invasion of Ukraine.

The company went on to add that it no longer believes it will achieve its full-year 2022 targets and has instead decided to withdraw its previously issued guidance. The company held the expectation of adjusted earnings per share, standing between $2.60 and $3.20 for the year.

“Due to the high degree of operational uncertainty we face, we have decided to withdraw our previously issued financial guidance for 2022,” said CEO Miguel Fernandez. “We remain confident in our ability to execute on our Turnaround plan and growth strategy, with the end goal being to make this company as big as our iconic Tupperware brand.”

The company said it would consider developing a new outlook when it has improved visibility. Tupperware also appointed a new chief financial officer, Mariela Matute.

“We are not surprised that TUP faced difficulties in 1Q22,” said Citi analyst Wendy Nicholson. “That said, with the impact of such challenges leading the company to withdraw its 2022 guidance, and push out its turnaround plans, and this all presumably leading to a CFO transition, we are highly disappointed and are concerned that the results could look far worse for a while before they get better.”

According to Nicholson, Tupperware should trade at a discount of 55% because it is still in the early stages of its turnaround plan. Shares of Tupperware dropped 35% to $11.67 on Wednesday, further pushing the stock 23% lower this year.