Tupperware crashes to record low amid profit warning, accounting probe

Tupperware Brands hit a record low Monday after warning that profit would drop sharply amid an accounting probe at its Mexican beauty business.

The Orlando-based consumer-products maker said full-year earnings per share for 2019 would be between breakeven and 34 cents, down from $3.11 the year before. Adjusted earnings should be $1.35 to $170 a share, the company said, below the $2.77 Refinitiv consensus.

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Tupperware is reviewing financial-reporting issues at its Fuller Mexico beauty brand, which primarily affect outstanding payments due to vendors and suppliers and may lower pre-tax profit by as much as $11 million. Total impairments for Fuller Mexico may total $52 million for the year, the company said.

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“While challenges in Brazil, China, and the U.S. and Canada businesses persisted in the fourth quarter in line with our expectations, our preliminary results were further affected by financial reporting issues in Fuller Mexico,” interim CEO Chris O’Leary said in a statement.

“We are working rapidly to address these Fuller Mexico issues in order to finalize our 2019 results," he said. "We are also focused on facing the clear headwinds in our core markets and accelerating the pace at which we can achieve meaningful improvement in the business."

Looking ahead, Tupperware sees a sales drop of 9 percent to 11 percent due to difficult consumer trends in key markets and a smaller sales force. Revenue may tumble by low double-digits in North America and mid-double-digits in Asia.

Due to its 2020 outlook, Tupperware expects it will need relief from a leverage-ratio clause in its $650 million credit agreement to “avoid a potential acceleration of the debt, which could have a material adverse impact on the company.”

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Tupperware shares fell 33.3 percent this year through Monday, underperforming the S&P 500’s 0.2 percent decline.