Tupperware Brands Corporation released its financial report for the second quarter of 2022, including an 18% dip in net sales to $340.4 million, down from $416.6 million in the second quarter of 2021. Lockdowns in China and lower overall sales force activity contributed to this decline, according to a company statement.
Gross profit was also down, totaling $220.7 million as compared to $285.9 million in the previous year’s quarter, which the company attributed to lower volumes and higher resin and logistics costs.
“While we are not pleased with our current performance and level of profitability, I am encouraged by sequential improvement in profit in the second quarter, reflecting the many bold actions we continue to take, and I see promising signs that our strategies are working,” said Miguel Fernandez, President and Chief Executive Officer of Tupperware Brands. “Lockdowns in China and shifts in consumer behavior in Europe significantly impacted our year-over-year performance in the second quarter, as did inflationary pressures and unfavorable foreign exchange rate fluctuations. During the quarter, we continued to address the operating factors within our control, specifically technology, operations, service levels, and ongoing implementation of global direct selling practices. While we are beginning to see encouraging trends in certain markets as a result of these efforts, more work remains to optimize our operations and supply chain. We nevertheless remain on track to further penetrate retail channels later this year, which we believe will be a milestone in our omnichannel evolution, and provide a needed catalyst for long-term growth. We acknowledge the challenging journey ahead of us to transform this business, and are confident we are executing against a strategy that will ultimately enable our business to become as big as our iconic Tupperware brand.”
Tupperware’s income from operations was $4.5 million, compared to $31.9 million in the second quarter of 2021. Diluted earnings per share was $0.09, compared to $0.60 in the same quarter last year. The company’s consolidated net leverage ratio is now 3.13, after a paydown of over $100 million in debt.
“Our second quarter performance reflects our improving ability to respond to high inflation and supply chain challenges,” said Mariela Matute, Chief Financial Officer of Tupperware Brands. “Pricing actions and improving service levels in the second half of the quarter helped to mitigate margin erosion, with full favorable impact expected to be realized over the balance of the year. While our performance is trending in the right direction, we also acknowledge the potential for near-term volatility as we continue to address internal challenges and navigate external headwinds, which we expect to continue for the remainder of the year. We continue to evolve our planning processes and resources, with the goal to generate efficiencies and right-size our cost structure. Following our $75 million accelerated share repurchase last quarter, our capital allocation priorities have shifted toward the paydown of debt, which we successfully reduced by over $100 million in the second quarter. We also sold our House of Fuller and Nutrimetics beauty businesses, in May and July, respectively, consistent with our plan to focus on our core Tupperware business. We will continue to look for ways to strengthen our financial foundation in order to position our company for long-term, profitable growth.”
