Tupperware focuses on growth in emerging markets

By Guy Montague-Jones

- Last updated on GMT

Related tags: Percent, North america, South america

Strong third quarter sales figures at Tupperware Brands indicate
that direct selling cosmetics firms should concentrate on emerging
markets as the retail channel has lost popularity in some
established markets.

Sales in emerging markets drove 10 percent growth in local currency terms for the three months ending September 29, but sales developed markets such as Germany held the figures back. The Florida-based company reported a rise in operating income of 21 percent compared to the third quarter last year although margins remained stagnant at around 5 percent as written off intangible assets affected the figures. Beauty, which is Tupperware's largest division in North America, experienced sales growth of 10 percent, in line with the company's overall figures. On a regional level, sales in emerging markets, which account for 46 percent of global sales, were up 20 percent. The strongest overall growth came from the Asia Pacific region, but in the beauty division sales in Central and South America were particularly high. On the other hand, the company said sales in Europe were up only slightly, supported by strong figures in the developing economies of Russia and South Africa. In established markets direct selling is proving to be a difficult retail channel with Tupperware reporting a double-digit sales fall in Germany. Overall, the company was affected in Europe by a three percent reduction in the size of its sales force. Tupperware brands expects sales to increase seven percent to $1.93 - $1.94bn for the full year and has increased its earnings per share guidance for 2007 to $2.10 - 2.15 from $2 - $2.05.

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