Tupperware sales suffer from strong dollar
Sales from the beauty segment of the Florida-based direct seller fell in all regions, although in South America positive local currency sales were dragged down by currency effects.
Beauty North America, including BeautiControl and Fuller Mexico, recorded an 8 percent drop in sales for the quarter in local currency. However, the strong dollar dragged this performance down resulting in a 20 percent decrease in recorded sales.
Profit for the segment dropped by $2.6m in local currency ($6.1m recorded) which, according to the company, reflects the decrease in sales and higher promotional costs for the quarter.
The disappointing results for the segment have led the company to install a new leader at BeautiControl ‘with a focus on reinvigorating the business’.
Operations in Venezuela, Brazil and Argentina performed much better, but the strong US dollar stopped the company from reaping the benefits of a 10 percent local currency sales increase.
However, profit from the region did improve, reaching $3.2m from a loss of $0.1m last year.
Currency affected all segments
Results for the company’s other businesses, including plastic containers, were similarly affected by the strong dollar throughout the quarter.
Overall, sales increased in local currency by 3 percent but the impact of foreign exchange brought these figures down to a 10 percent decrease.
Nevertheless, the bottom line stood firm, increasing to $65.8m from last year’s $54.9m due to one time gains.
Commenting on the results and the year ahead, CEO Rick Goings was confident of the company’s ability to weather the storm although he did recognise the current strength of the dollar as being particularly difficult.
“2009 is a challenging year worldwide and while Tupperware Brands is not immune to the externals that make this the case, with our global portfolio of direct selling companies, we should be able to navigate better than most.
Currency is a headwind right now, but we will continue to drive our businesses forward managing them in local currency, while vigilantly working to achieve our profitability and cash flow goals,” he said.