Tupperware Brands discusses factors negatively impacting Q1 results
The most significant factors negatively impacting the first quarter of 2018, versus previous guidance, were: Customer service issues associated with the now closed French manufacturing and distribution facility had a larger than previously foreseen impact on sales, most significantly in France and Germany. Any ongoing impact is expected to be much less significant; In Indonesia, sales were lower than expected as key strategies have yet to gain traction; In Brazil, there were issues in the supply chain impacting product availability, including a customs strike, the over sell of certain items, and quality issues with a third party produced item. These factors negatively impacted sales and the number of sales force additions and new sales force leaders promoted; and The change in the tax rate that relates to the Global Intangible Low-Taxed Income tax. GILTI is currently expected to negatively impact full-year earnings per share by 35 cents compared with previous guidance, although it is not expected to impact cash flow. As the rules around recording the impact of GILTI are not yet clear, the currently estimated impact could change significantly as the year moves forward. If it does change, the Company expects it more likely to be lower than higher. Rick Goings, Chairman and CEO, commented, "While overall we are disappointed with the results of the first quarter, we were pleased with continued good performance in China, Mexico, Malaysia/Singapore, South Africa, the United States & Canada and others. We also returned to solid growth at Fuller Mexico, our largest beauty unit. We had expected challenges related to the closure of our French manufacturing facility, but the collateral impacts ran deeper than anticipated. That said, our actions under our revitalization plan are necessary to evolve our business on a number of fronts to leverage our growth opportunity and generate the return we, and our shareholders, expect. In Indonesia, we continue scaling-up a number of newer initiatives that we expect will lead to better performance in time, and we have also installed a new managing director during the first quarter. Brazil had an unusual number of external factors that hurt our momentum. We expect these issues to be temporary, as our strong management team in Brazil has identified, and is addressing, the key issues." Goings continued, "More broadly, we have confidence in how our business will perform going forward, as we continue to evolve our relationship-selling business model to include greater access to our powerful brands and innovative products through the use of digital tools, branded contact points and a relevant earning opportunity for our sales force."