Thursday, July 24, 2008

Tupperware Sales Do Not Generate Profits

Tupperware (TUP) announced Q2 results and trumpeted significant increases in sales in both local currencies and converted into US. But when the bean counters convert the numbers into what the shareholder worries about the most, the results are not financially impressive. Traders must have been anticipating good news because the stock was on the move before the announcement came out. Then reality and the cold harsh facts set in.

If sales and revenues may be reported with an 18% increase, as per the headline in the press release, than the EPS had better reflect the marketing achievement. Otherwise why bother showing up. Even boiling the numbers down to 10% as local currency, the EPS should start to impress.

Institutional ownership is well over 90% in this stock. Hopefully this means no hair trigger reaction. But the phone calls into the VP finance should be brutal.