After four consecutive strong quarterly results, investors are looking forward to an earnings miss with analysts expecting a 20.4% year-over-year plunge. Growth estimates are likely to fall by 11.8% per annum in the current year, while it will rise by 7.5% in the next year. Traders are remaining cautious as the results were unsatisfactory. But over the next five years, the estimates are projected to rise by 12% per annum.
For the recently completed second-quarter, Tupperware posted a 7% decline in sales due to the closure of Beauticontrol and the combination of the NaturCare and Tupperware businesses in Japan. Adjusted EPS declined by 3.3% due to weaker foreign currency exchange rates.
The company has been depending heavily on the emerging markets as 71% of the total sales in the second quarter came from that. For the third quarter, the company had expected sales to decline by 12% to 10% and adjusted EPS of $0.80 to $0.85. For the full year 2018, Tupperware had predicted sales to fall by 7% to 6% and adjusted EPS of $4.25 to $4.35.
As of June 30, 2018, the company has spent more cash on the daily business activities as cash and cash equivalent has fallen by 32% to $98 million from December 30, 2017. Tupperware had borrowed more as short-term borrowings, and current portion of long-term debt had risen by 94% to $257.8 million.
The balance sheet analysis showed that the company might be in poor financial health as the short-term debt is larger than its cash and cash equivalents, and it doesn’t have enough cash to pay off short-term debts. Investors are fearing that in the short-term the company would be showing negative results.
Shares of Tupperware has opened lower and remain in the red territory for most of Friday. The stock has fallen by 44% for the past year and by 48% for the year-to-date.