'Sluggish' markets hinder Tupperware's beauty sales

By Katie Bird

- Last updated on GMT

Related tags Percent increase North america Sales Tupperware

Direct seller Tupperware has suffered from ‘sluggish’ economies in its established markets, particularly in the beauty sector.

Net sales for the quarter ending September 27 came in at $513.1m, a 13 per cent increase on last year’s figures (8 percent in local currencies).

However, it was emerging markets that led this growth reporting a 21 percent increase in sales, in comparison to a 5 percent drop in sales in established markets.

Tupperware CEO Rick Goings said this largely reflected ‘sluggish economies’.

Beauty suffered in North America

Indeed, results from BeautiControl North America reported a double digit drop in sales despite low single digit growth in Mexico.

The Beauty North America division as a whole reported a 1 percent increase in sales (3 percent drop in local currency).

Nevertheless, it was not all doom and gloom within the company’s beauty segment as the emerging markets of Central and South America achieved a 23 percent increase in sales (17 percent in local currency).

It is clear that Tupperware will be looking to these emerging markets for future growth and Going believes the company is only in the ‘early innings of capitalizing on the growth opportunities in our emerging markets’.

Stagnant sales force

Tupperware has not seen a significant increase in its sales force in the last few months.

However, this year’s third quarter saw a 1 per cent increase in sales representatives for the beauty segment. In comparison, Oriflame, a Sweden-based cosmetics direct seller today reported that its sales force had increased 22 percent over the quarter.

The company said it would be offering a more attractive entry kit to representatives in the fourth quarter in an attempt to solve this problem.

Share repurchase accelerated

The company also announced it has accelerated its share repurchase programme. In 2007 and up to the end of the current quarter $64m worth of share repurchases have been made.

The company proposes using $10m in the fourth quarter of 2008 and approximately $40m in 2009.

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