Penny Stock, Tupperware Soars After C-Suite Shakeup
Shares of one of the most under-discussed penny stocks, Tupperware Brands (TUP-Stock Report) outpaced the rest of the market today after reported new C Suite appointments. During the premarket hours on Thursday, shares of Tupperware dropped to new 52-week lows.
As the major indexes followed suit, TUP shares dropped to lows of $1.57 during pre-market trading. The initial drop came as the company reported quarterly and fiscal year-end results to the public. But as you’ll see, new changes to its C-suite have triggered a new push in bullish momentum on Thursday.
Results In Line But Could Expectations Signal Potential?
While 2019 financial results were in line with preliminary results, they still didn’t reflect strength in the company. The food storage company’s sales declined by 13% versus last year. Furthermore, GAAP diluted eps came in at $0.25. This didn’t compare to the prior yeara’s GAAP diluted eps of $3.11. However, Tupperware was able to execute on several long-standing issues that may see a new face to its business moving forward.
Management Shak-Up
Tupperware has needed help for a while as far as I’m concerned. The company, however, might be in agreement based on the latest moves taken. The biggest question is if it will be the best move in the short term AND long term. Thursday morning the company announced big changes to both its management and board.
First, the company appointed Miguel Fernandez as CEO and president. He’s managed to amass over 2 decades of direct-selling experience and is an Avon (NTCO-Stock Report) alum. He served for more than 2 years as the Global President of the company. Fernandez also spent more than 10 years at Herbalife Nutrition (HLF-Stock Report) and had a hand in the company’s business in Mexico.
What’s also something to consider is that Tupperware also brought on Rich Goudis as Executive Vice Chairman. I the name’s familiar, that’s because Goudis was the former CEO of Herbalife Nutrition. He spent 15 years at the company serving in other roles such as CFO & COO in addition to his CEO position. His appointment effectively expands the companies board to 12 members, now.
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In addition to that, prior issues seem to have been ironed out. The main focus here was the company’s Fuller Mexico accounting investigation. Tupperware Brands, as well as current and former executives, are being sued after the company said it was investigating the impact of financial reporting issues with its Fuller Mexico beauty business.
Can Tupperware Put A Lid On Coronavirus?
Like most consumer sector stocks, the coronavirus isn’t something to take lightly for the company. But the trading momentum can’t be ignored especially since the market as a whole is getting smoked on Thursday. With regard to COVID-19, interim CEO, Chris O’Leary had a few thoughts on the subject.
“The Company’s top priority is to protect its employees and their families, the sales force and consumers, and its operations from any adverse impacts. The Company is taking precautionary measures as directed by health authorities and the local government. While it is not possible at this time to estimate the full impact COVID-19 could have on the Company’s business, our outlook provided on February 24, 2020, reflects our best estimate given what we know at this time.”
If you missed that announcement, here’s a recap:
- The first half of 2020 reflects similar sales trends as 2019, together with continued investments to drive savings. The second half of 2020 reflects better sales trends supported by go-to-market work in Brazil, China and U.S. & Canada along with the majority of the $50 million cost savings efforts.
- Local currency sales for full-year 2020 are expected to be down 9% to 11% and are reflective of the difficult consumer trends in key markets and a lower average active sales force.
- Segment profit return on sales is expected to be 330-350 basis points above 2019 reflecting the expected cost savings opportunities of $50 million
- Sales – Europe down high single digits; Asia Pacific down mid-double digits, North America down low double digits and South America down mid-single digits
