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Bear of the Day: Tupperware Brands (TUP)

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Tupperware Brands (TUP - Free Report) is a consumer staples giant, making a wide range of items like beauty products and storage and serving solutions for the home and kitchen.

TUP plunged more then 35% after it announced in late February that it was delaying the release of its full 2019 results.

It said it was looking into “financial reporting issues” in its Fuller Mexico business, in addition to finalizing its tax rate, before it would release results.

Last October, TUP warned that its full-year results would come in well below expectations, between $1.35 and $1.70 per share (vs. $2.78 per share consensus forecast). The company blamed "continued execution challenges and unfavorable macroeconomic trends" in Brazil, China, and North America for its weak performance.

Along with a reduced 2019 earnings outlook, 2020 could pose a challenge as well. TUP sees revenue in the range of $1.58 billion and $1.62 billion, lagging the $1.67 billion analyst consensus.

Management expects the second half of 2020 to be better than the first, with improved sales trends thanks to streamlining initiatives.

TUP is now a Zacks Rank #5 (Strong Sell).

Tupperware Brands Corporation Price and Consensus

Shares of the consumer staples stock are down over 80% since January, and slumped almost 20% in the past five trading days alone. The S&P 500 is down over 28% year-to-date in comparison.

With its current outlook, TUP could have trouble meeting required leverage ratios on the $650 million credit agreement it has. The company’s future is uncertain right now, and investors will want to stay for now.

Those who are interested in adding an industry peer to their portfolio could consider consumer product manufacturer Kimberly-Clark (KMB - Free Report) , known for brands like Kleenex and Huggies. KMB is a #3 (Hold) on the Zacks Rank, and anticipates 5% earnings growth for this year and next.

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