Tupperware Brands Corporation (TUP - Snapshot Report) recently reported its second consecutive positive earnings surprise on strong sales in North America and the emerging markets of Asia Pacific.
Following the solid quarter, management gave 2011 guidance above the Zacks Consensus Estimate, prompting analysts to revise their estimates higher.
With its high margins and strong cash flow, Tupperware has been able to return value to shareholders through stock buybacks and a dividend that yields 2.2%.
Fourth Quarter Results
The company recently reported fourth quarter EPS of $1.38, beating the Zacks Consensus Estimate by 10 cents. It was a 13% increase over the same quarter in 2009.
Sales were up 6% year-over-year driven by a 10% increase in Asia Pacific. The emerging markets within Asia Pacific were very hot once again. Indonesia soared 39% while India surged 60%. China was up 6%. The established markets in Asia Pacific were weak, however, due in large part to a 23% decline in Australia and a high single-digit decrease in Japan.
Meanwhile, sales in North America were up a strong 9% while Europe was essentially flat.
The gross margin declined a bit, from 66.4% of sales to 65.9% in the quarter. Adjusted operating income was up 9.5%.
Following the strong fourth quarter, management gave 2011 EPS guidance of $4.23 to $4.33. This was higher than the Zacks Consensus Estimate at the time and sent earnings estimates higher, leading to an upgrade to a Zacks #2 Rank (Buy).
The 2011 consensus estimate is now within guidance at $4.29. This represents a 15% increase over 2010 EPS.
The 2012 estimate also moved higher and is currently $4.87. This equates to 13% growth over 2011 EPS.
Tupperware produces strong cash flow and has been rewarding shareholders through stock buybacks. In 2010 the company spent $62.4 million buying back shares. It expects to repurchase an additional $160 million worth of stock in 2011.
Tupperware also pays a dividend that yields 2.2%.
Shares jumped higher off the fourth quarter earnings surprise:
Valuation still remains attractive, however. Shares are trading at 12.6x forward earnings, a discount to the industry average of 13.3x. Its PEG ratio is just 1.05.
Read the October 26 article here.
This Week's Growth & Income Zacks Rank Buy Stocks:
General Mills, Inc. (GIS) is about as stable as they come, and the company pays a dividend that yields 3.1%. Although rising commodity costs have squeezed margins a bit, earnings per share are still expected to grow by 8% in 2011 and 9% in 2012. It is a Zacks #2 Rank (Buy) stock. Read the full article.
Destination Maternity Corporation (DEST) recently reported better-than-expected results for the first quarter of 2011. Earnings per share came in 17% above the Zacks Consensus Estimate, and management raised its guidance for the full year. The company also announced the initiation of a regular quarterly dividend. It currently yields 3.3%. Read the full article.
MAXIMUS, Inc. (MMS) recently reported Q4 EPS of 99 cents, beating the Zacks Consensus Estimate by 3 cents. Estimates moved higher off the strong quarter, sending the stock to a Zacks #2 Rank (Buy). Read the full article.
Costco Wholesale Club (COST) posted better than expected same-store sales for January. The retailer has a strong balance sheet and has been buying back stock and raising its dividend. It is a Zacks #2 Rank (Buy) stock. Read the full article.
Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.