Tupperware's stock soars thanks to more people staying home and cooking
The company has seen a remarkable rally since the COVID-19 pandemic ravaged the U.S. economy in March
In a continuation of its 2,500% rally from mid-March, Tupperware Brands Corp.'s stock skyrocketed Wednesday, up as much as 41%.
The lift came after the food storage products company reported a third-quarter profit and sales that were much greater than expected against the backdrop of the coronavirus pandemic.
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The net income for Tupperware Brands rose to $34.4 million from $7.8 million -- more than 300% -- over the course of a year and sales rose 14% to $477.2 million, according to the company's news release.
Sales in North America spiked to 42%, sales in Europe grew 23%, and sales in South America increased by 4%.
Conversely, Asia Pacific sales fell by 6%, as MarketWatch reported.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TUP | NO DATA AVAILABLE | - | - | - |
Around one year ago, the company's board made the decision to change leadership. The former president of Avon Products, Inc., Miguel Fernandez, was appointed in March and other structural changes followed to create what Executive Vice Chairman Richard P. Goudis said is now a "leaner, more responsive and effective organization."
"The results reported today, top line growth of 21% in local currency and adjusted EPS growth of 233% and were ahead of the expectations we had internally just 6 months ago," he told employees.
Goudis also boasted the addition of a new sales force push, a better pricing strategy, the creation of more access points for customers, the exploration of alternative revenue streams, and new licensing to align the brand with "meaningful megatrends."
"We are aligning our brand more closely with the new norm of people cooking and eating at home, with products that help them save time with food prep, and products to help them save money by keeping their food safer and fresher longer," he said.
In the same companywide call, Fernandez, now chief executive and director, said the growth showed a "rapid adoption of digital tools by our sales force to combat the social restrictions surrounding COVID-19, and the increased consumer demand for our innovative and environmentally friendly products, as more consumers cook at home and are concerned with food safety and storage."
Touting a new consumer-focused growth strategy -- and seeing higher-than-anticipated demand -- Fernandez said that the brand is a "great turnaround story" in the making.
He also committed to a renewed focus on China, with local currency sales down 12% versus 2019, and announced the departure of the tenured leader in China.
Fernandez said the pandemic had created a "new norm" for both the consumer and company and that sales in the U.S. and Canada were up 72% from last year -- the highest level of growth seen in the region in over two decades.
"While it's still very early days in the complete turnaround of this company, the confidence of our leadership team grow stronger every day, that we're making the right changes at the right speed with the right focus," he said.
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Over the past three months, the company's stock has more than doubled and the S&P 500 has gained 5.4%.
As Business Insider reported, the firm is targeting a continuous turnaround into next year to help refinance its debt obligations.