Tupperware’s beauty sales struggle especially in developed markets

By Katie Bird

- Last updated on GMT

Related tags Developed country North america Tupperware

Sales for the beauty segment of the direct seller Tupperware dropped in the second quarter, although emerging regions stood up better than developed markets.

The company divides its business into two segments, Beauty North America which is made up of BeautiControl and Fuller Mexico, and Beauty Other which covers countries in South America.

Beauty North America sales were down 23 percent at $103.1m, although after accounting for the negative effects of currency exchange fluctuations sales were 8 percent lower than the previous year period.

Fuller Mexico sellers were down in number but more efficient than in the first quarter of 2009, according to the company, and BeautiControl will be looking to recruit more sales force members in an attempt to grow sales in the future.

Profits for the North American arm of the segment dropped 13 per cent to reach $17.4m in comparison to last year’s $20.1m, but increased 14 percent in local currency.

Emerging markets stronger

As with the company’s first quarter results, the emerging markets gave a stronger performance with sales for Beauty Other down 3 percent to $74.4m, and up 12 percent in local currency.

According to Tupperware, the best performing regions were Brazil, Venezuela and Argentina and profit for the region stood at $7.4m in comparison to breaking even in the same period last year.

Overall, including the company’s plastic storage containers business, sales dropped 10 percent but increased 4 percent in local currency.

“We are pleased to report another quarter of local currency growth in spite of the macro economic environment we are operating in,”​ said CEO Rick Goings.

Predictions for the full year remain on similar lines to the second quarter performance. Tupperware expects sales to increase 3-5 percent in local currencies; however, the company expects a slightly better currency exchange situation (10 percent negative effect) which will lead to a 5-7 percent drop in sales.

Commenting on the outlook for 2009, Goings said: “Being a global portfolio of direct selling companies has helped us to provide consistent top and bottom line growth even in a challenging macro economic environment.”

According to Goings one of the company’s strengths is its locally managed businesses which makes it easier to respond to specific market changes.

“And, while not immune to the environment in which we operate, because of this management strength we are well equipped to navigate through it,”​ he said.

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