Tupperware Brands (TUPBQ) 5 May 212021 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the Tupperware Brands Corporation's First Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session [Operator Instructions] Please be advised that this conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Jane Garrard, Vice President of Investor Relations. ahead. go Please

press Financial to call. Welcome Fernandez, first issued page. XXXX XX, our for website quarter March announcing our The President Earlier on Thank our company press me Tupperware on conference Chief Harris, Sandra With release CEO; Miguel our this the a Operations financial today's quarter earnings Officer. and you. and Relations first Brands morning, release we and on Investor call ended our XXXX. results is are available

begin with will our We Safe Harbor statement.

call, During of as will course release that filings. the statements our are in to today's and uncertainties we and make SEC our risks forward-looking in press subject described

to the information. You of should in call today's listen context that

sales quarter non-GAAP basis. period between been in release. We compares period. is will periods also which can discuss today the in between measures as to Any exchange sales, currency some in the a prior GAAP reference Reconciliations foreign on referring of our local the and be exchange for rates our discussion found if also press rates to non-GAAP current results results the had

can of our company can Relations remarks. turn now the to Investor for language website over replay Miguel section this a access You his through today. access where the statement forward-looking I will webcast and release you of also later the call the call

Jane, morning Thank everyone. good and you,

we the capital morning liquidity and committed tools in top our in the of And the increase began performance business, bottom a to improved Just XX to to of the year more from structure, our just performance process sheet. months both a cost and company. significantly with along use about but and with digital ago, ago, you press minute. release quarter the line fix saw this the along the our structure team, around leadership balance strengthen right-sized this new turn a iconic and We're core as

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network. to tools, was mentioned us key and physical the hindering our leverage no digital on social last XXXX geography been to for a and a of their strategic reach media By force that they shift their realized sales their that have beyond in we neighborhood reach our utilizing able platforms growing expansive social factor longer business. As was call, online earnings

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digital overall social servers. expansion of web great tools, sales enablement and is strategy Our making with progress force commerce

sales tools the increase consumers order options important in consumers interaction these to have force create and and seamless now for our more markets products. to XX top a Our our access between

and more Historically, loyalty $XX consumers, we per opportunities. partnerships. few some a in products to sold retailers done new Tupper products we million these let access million to the business of accelerate use Speaking growth in product to then me major who year their remainder $XX have business-to-business well-known In points minutes ways evaluating opportunities with major discuss take programs. then partnerships, to are channel. in buying partnerships. exchanged and for spend more in Currently, there on expand believe we're opportunities Mexico, this based activity a for are with these our of year to are consumer - We working retailer. the Brazil the Europe brands to

provides U.S., channel channels new a This a distribution. weekend, had than in to the we around to will U.S. the limited home and Additionally, XX our homes shopping future past brand our use media deepen testing be million with access major who lease here brand through sales channels. segment various products allow of us more product force. engagement This for across new ran exposure Tupperware potential and

an this the of through discovery is opportunity driven shopping audience an to expanded experience. reach Additionally, power and storytelling

durable platform, TerraCycle to ago, leading plastic to with with months container Tupperware brand partner few a the zero first Loop brands and Loop. works waste reuse create became circular reusable packaging. returnable Just

kind one this Loop's it of recently will brand partnered agreement, reusable brand option has available we're with later designing year. a and and this partners part prominent package currently be As of of a Tupperware for this one

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of not me highlight and our is ECS XX%. Turning going to quarter markets the force had level this discusses first growth Sandra the XXXX growth was U.S. sales to activity large note important the few before increased and financials. sales market, results, first comparisons. and of that XX%, sustainable It our of overall Canada In year-over-year up a quarter forward, is let

profitable some and distribution promotional the shifting of highly programs improved we're market sales costs. reduce more this in will to we and Additionally,

distribution of embrace Canada, smaller units purchasing more this become and had Mexico continue first to important Tupperware has an our the This the the profile customer in average evaluating This be what in increased and profitability growth X% in will into pull quarter cost reflecting market costs we leads with that is people we profile ways. sales force to easy in As more also near market. and had first internally be force. to an is this change U.S. on higher Tupperware in ways our an This our our strategy. market we order changing. consumer-centric working efficient a more forward. consumer Virtual quarter to said to needs increase term, in selling considered XX% comparison shift XXXX going the the in we are growth to sales have sales active the

we are to in Mexico, be sales not we meeting potential what our experiencing this we're believe growth market. While in

change and the a leverage made going forward. sure sales of result, brand As to we force our leadership make products, a recently we opportunity that

with confident increase sales years over With increase XX%. sales local an in the quarter work the I'm Brazil, force increase with and new what's through and of work me leader of first achieved he sales be XX this profitability. in will activity XX%, to increased market sales the In force comparison able an last to and

of hard. know, has COVID wave the you very hit As second Brazil

been While significantly not this efforts yet recruiting sales, have second wave our impacted has affected.

our remain our subside. until active plan, key down were China, in stabilizes declined XX% as cautious in market And X% lastly, trend year. versus and last which COVID we will the rates students growth market this long-term So

in brand that recognized improving China exploring time, on e-commerce in is leader core led this new focused is the and entrepreneur bigger business. accepted retail and turnaround Chinese confident by in will take Our opportunities but fixing innovation, our consumers. The we're market product

know And are of competitively selling use come. Looking for potential and our our sub-runs meaningful introducing us the forward, up-sell around best world, years sales to to business force, categories following; data create execution cost. will where and segmentation we foundation the introducing of strengthen these of of preferred service different our priorities practices, our We data investment, of ensure key distribution selling and for value the direct is to creating believe permission channels that into conflict priorities product explore give penetrating expansion enter. current a with avoiding our strong our consumer to channel to on our the key loyalty detail in Tupperware new and shareholders to priorities programs in direct preferred are XXXX cross-sell customers, product to customer competitive business identify use

me let our to review call Harris, Now and statements. our turn COO CFO a for of Sandra the over financial

over financial Thanks momentum XXXX turnaround XXXX of quarter strong first the plan. Miguel. we of are from revenue second establishing foundation the of as our to The the part reaffirming carried firm half

which year of in increase. last Our basis. first our quarter of XX% local currency a Canada, of XX% of and sales increase markets, on XX% Three with and million, reported was U.S. contributed $XXX top the up dollar compared four Mexico an Brazil and

so XXX to basis a basis higher in gross XXX than other The Miguel Additionally, we coupled the reflecting majority favorable changes increased impact margin costs. operations. increased of able and this may On points additional excluding led are our a the posted South the been attributable sales impact say. balance North lower heard the negative well. XX%, our X% up negative our that basis, the points and But higher through mix. to experiencing the companies, Europe resin cost markets core cost improvement, XX% product our savings Asia in ago. to of you you higher fix offset These year was from reflects America XX.X%, of turnaround of breadth a Like we've costs. quarter was our plan savings, regional to improved America country with XX%, manufacturing as Of follow, China's business, throughout improvement sales far, efforts decline increased

to SG&A. on Moving

Rightsizing year-over-year from XX promotional tremendous basis a XXX as year. experienced These points improvements of XXX higher by last Adjusted improvement. offset costs. contributed improvement also were basis and XX.X% efforts improvement and reflected basis We are an points points partially percentage costs. of sales SG&A distribution lower basis XXX was point from

plan to enhance in strategy few over investments forward data support new IT we the are of improve million next Looking to We security, channels. to channel, privacy the also quarters. our $XX We in XXXX. investments supply chain To grow this our make incremental our strengthen range to increase to new balance control. cyber infrastructure and capabilities accelerating our a the in of levels for investment the $XX million service in the these be required incremental to by and consumers estimate

$XX approximately the investments 'XXs achieve tax believe tax a ability for million in opportunity in to through strategy, Additionally, full-year and our we rate the additional we of of XXXX. low the quickly more have

XX% leverage We results our Longer initiatives. XXXX where growth our near efforts, expect and SG&A mid in plans XX% pursue the the range will creating we these compensation term. additional term, simplifying our of centers and investments size, continue ongoing SG&A sales in through of omnichannel excellence to centralization in at sub to results

resulted sales reflects improvement of that it's million For I combined the and reflected basis the with an commitment gross just savings in adjusted margin of operating income which growth first XX% X,XXX our P&L. discussed quarter, in or improvements cost We versus margin our made XX.X% $XX.X significant SG&A now contribution to huge the see in of on XXXX and points sales, a year. towards a it prior in gratifying

Now turn let to EBITDA. non-GAAP metric me a

our contained the on schedule an year. reflecting is for quarter, $XX see it As million from in improvement of press million, $XX.X the you release last

the turnaround lower of income above of and the million. is a items operating less of in million bad in QX reduction higher still debt reversal that $X.XX of quarter year. diluted last incremental debt with to led our EPS $X.XX quarter to the of the the quarter minute. million grant the offset and COVID-XX be these quarter, one-time the and This plan $X quarter I margins, in total of In a turnaround gain compared China debt discussed, but in of of just The of repayment, sales the government normally Germany million, EBITDA related growth profits loss higher And $X.XX China adjusted sales $X.XX acceleration a reversal adjusted sale $X.XX. to include of the the fourth XXXX. related by to operations, favorably addition $X bad from also by benefit impact. $XXX significantly, was $XXX which $X.XX improvements a received just slightly in I'll future the of discuss dramatic improved nearly quarter, and assets of EBITDA of year. and savings, just the the was grant reserves, the in EPS investments than first In GAAP The to and will Adjusted I of first of a from debt $XXX improvement $X.XX a associated $X for a to XXXX. interest million first EPS in related on first a first reflecting quarter, balance the million, the mentioned, in from the $X.XX last higher impacted

our approximately in effective reduction a XXXX million reduction a resulted we adjusted loan our basis in proactive the EBITDA quarter, point our EBITDA to together assets $XX year of actions of quarter. first strong of triggers X.XX term to covenant of favorable debt, below improvement for rate in the reduction took in the new reduce we the non-core debt purposes debt use during paydown The versus and second interest ratio sale also term The to addition four. well XX X.XX loan required debt debt. proceeds debt covenant last to in with our the In from and restructure

our Achieving that on to loan continue the that rate quarter leverage debt of sales, X.X% efforts from plan is reflect through rightsizing in ratio proceeds debt. the third evidence working. our million non-core $XXX for lowering and profits consecutive X.XX% X.XX, growth turnaround a of our double-digit decline delivering, our the term to We expect to resulting asset continued of

growth shifting year, that efforts plan our discussed of therefore, investments we growth make we As will and into the we we support new incremental contained as believe are strategy penetration in to drive rest to the we channels. look today, and and our focus to forward

to growing our also finalizing house. are divestiture to branded our We committed of asset focus on resources non-core sales the

strategic stronger, we the I create for As now these believe will over will for our more result, Q&A. plans the competitive a future. turn actions call company and

of comes Bolton [Operator the Instructions] Your first Weiser line question Linda from D.A. Davidson. with

Your line is open.

up that the I investment Sandra, of the you, you. said of Can about just yet EBITDA lower, EBITDA additional EBITDA I cadence but you kind the Thank you what year-over-year. flow going comment just repeat made Can the additional the the correctly? of additional statement just be understood can forward? investment, clarify And investment? what you guidance you the on excluding that that think in kind including then would

Yes, I would would that we in one-time so be and EBITDA discussed. quarter million $XX.X was make the against adjustments the EBITDA the that items

So of one fourth the Avroy grant, difference a in was government when Shlain. facility sale it $X recognize on timing quarter. There gain China typically on was the $X we manufacturing the in million million French comes

So have and security, throughout that going IT in one-time accelerating prepared access. that that ensure IT, more and are infrastructure we consumers with provide things and more opportunities the so, the as our necessary QX. consumers data approach QX expansion are We're business the a of we $XX and little then to of cyber around QX, work the to we some for enhancing to point, are all investments around then more privacy, specifically reversal would that EBITDA those between lower make. And that but $X be of and million. bad roughly heavier additional And we forward million debt need of to then million I looking more $XX rateable discussed your

too cost $XX I amount cutting of was back, of is to expected of million if about to come you Sandra, that the think that clarify original million can of the cost you investment on savings. the XX% $XX top And which

So Thank come this back-to-back is you. will like that incremental back?

Linda. Yes,

roughly XX% say in we back-end those of opportunity. So that million, COVID-XX QX, the program even either said trips more the actions we had $XX loaded and though like million, $XX incentive would one-time more add it's or some had that also were furloughs. back-end as But commercial largely I we also commercial

talking the and the to is plan our about hoping, most turnaround those additional generating is sales. the $XX the million, getting sales of more really million million for for part, So we're $XX driving whereas infrastructure prepared $XX

it million. that so $XX is to And incremental

about and or operations you team then of that investment think will and the XXXX? Okay. thinking longer in more long-term has required kind of work And XXXX? think about as the be some the there beyond further in the thinking kind you management investment Are can you in incremental turnaround normal type been the past of do terms that Thanks. like of you kind there, in investment

the of to Yes, did that $XX million growth to some so investments based achieved choose these fund we on we profit the to use additional XX% higher $XX about million. of

different crates. both potentially distributor partnerships consumer we have big cadence, a to units has So we're have we we as supply for into that, we to more then also would I is really from prepared Linda. lot yes, to say look expand a different where a to be going channels, that chain that. we we ship smaller a per And our had do need which model always a model, looking in What balance shipping are work to that but that carton, cadence packing of

we're to chain investments. supply make really to and having look at choose So our

those third-party we as that The expand, more more of product we other will coming continue sourcing situation. as have availability, that need and we from is and to innovate products we be a realized most channels for piece

to new about out the talking that organization to suppliers this really investment start So are year that market. innovations part that finding a we're in sourcing robust those partners with obtaining on of build is products, the

our forward feel like product respond augment categories. upon that new to will as we these we so, do sales how And we potentially depending go

into of an or channels where see Thanks. of performance incremental more results other And will kind the strategic then about is could sales talk the as effect actions? to XXXX we in on you sales that just your terms get we XXXX of see Miguel, in terms in of, would initiatives actual it sales

Linda morning. Hi, good

year. going you're start in a think QX QX, next definitely it seeing I but to mostly and in little

the company Okay. the or when this of to kind your strategy? Miguel, at or Is as you've are turnaround? you terms there guess your any parts of that year, ability what thoughts And you have biggest then a seeing changed anything game, now of challenges company the execute to versus about at on stage in the came I first that been to of the strategy

going skill is that bigger And and same with So were up. no. all know, have to that's and other is many is one execute. be primarily set basically, confident strategies you to channels they how call because we to are the other those different we're along we them And need this in the companies investments, selling to to answer these get short fast. I new and other same company. you these it, the that The direct to But of the have know our in than which markets. We're place. a build think P&L higher, founded ability other is very start the sustain And going into how mean, big at build We the skills to selling. answer able is them the expanding need obviously is build our I in direct time, we as to grew channels, knew completely to are challenge channels. by we want P&L you that whole

these said we are can Yes, also and incremental and channels to our Linda, centralization we could one margins know well through comment as and as continuing to I you add support improve other leveraging. will as that Miguel more margins

question funded. from investments these your that back respect be And will additional to so of,

keep to We the will continue to across very for look our healthy. enterprise margins optimize ways to

Steve question comes the O'Hara Sidoti. with next of from line Your

open. is Your line

you'd guys think question. you is you just, Asia, changes I like China made, was sounds it or like look mean years maybe that - to you and I starting management take et next how over in still generally. might few performing Could leadership be? it new you're up I to in to get traction with team the the some wondering shape Thanks cetera? Just talk know it to Can and not just if had the about taking for quarters China where

morning, Miguel Good This is Steve. here.

obviously, a So he who been days February, incentive has in few been plan And things has with for is Kayne us joined us. the so key XX the of early working change already literally the on, that field. to he is

can motivate So limitation sellers a top of there continue outlets each these China new to continue business and owners - we to for because was to the in leaders. the of top build XX to

can even the So more increased now people limitations successful be we the so successful.

including very he the with then is on. detailed locations of finally merchandising, store And practices, e-commerce so things quick is management, category Another they the comes market I being a that seek strong he and - manager, background. mean

XX within he in past market. that's we that So the take are only big, over into is but and we're ingredients something a it's he people I is very for are confident his time, going bringing big and worked script experts, said the setting that that hours, to right the e-commerce the

We have the management. right

third-party to sourcing, into more invested the mentioned, we going product a get we're be in Chinese are going to As so China consumers. lot Sandra for

in future China. our very we're excited So about

last guess as past you shape, this fairly near-term of longer kind then I'm earnings kind just to in see, what had the about a is goals Can you and And the still then think take maybe either strong what sales like where profitability think the started talked quarter of thinking term. things certain big turnaround maybe or And although you long-term comp, just I talk I wondering case, around and the a of maybe level the sales picture, are have is and the you kind I about that? continues easy very a of guys was in turnaround work. just you. to longer-term thank that of Okay, XXXX the

Yes.

grow provide and So as the around of led interesting decision I new we We're we things, a to to are would not well reiterate plan. range COVID-XX have it selling still in growth make of the these direct is business, we a doing and growth to not our because we said investments, are strategy, of around Steve, only continued that other which what just strategy turnaround what guidance, is sellers competitive growing our as doing. lot direct the incremental uncertainty the mean we

expansion we usually longer on to revenue. so And term, that add grow and businesses we both the side, single add double-digit selling low together range said in digits we but direct that these our is faster as to what us can that's much the in business opportunities, more continue know those grow helps to our

So it is a growth story.

realizing that help we're that able these them. to costs, out more will growth accelerate why to where and investments On about to in the the future we talking that aggressively profit side, chosen we've we've that's we're were take that proven and fund

on on margins delivered for continue of look at will very ways on we're healthy top we is XX% what And we and so quarter operating to strategy sales looking both that all-in-all have the return efforts this line our future. return continued we we with to growth balanced to a ensuring on to and look metrics the the around profitability forward very investors as

be just, that? Okay land the continued might and remind non-core to me Can is assets. effort and what timing shed on where the sales I process then know noted you just you

conversations last here the the to to the are still to to with done press the deal that's have the the release non-core on and them have more do had the of with we're that partner for Yes, option proceeds $XX look Orlando. any assets. so it's we of sold O'Connor. also parcel still ability go a range. they the at available do that so piece We're gives which that non-exclusive We are we faster have actually estimate piece, but was there one executing continuing and in them continuing on sale Recently, somewhere we they did loan million second in the hopefully committed we this a year, property in with

of question Nicholson line next from comes Your with the Wendy Citibank.

open. is line Your

system First Tupperware branded you're them you just I'm of its they into and Are P&L non-Tupperware of the businesses. through think maintain divest? sell entirely? people some about know year really as just any to to just Do wondering XXXX. but you brands revenues sales the instead to the going discontinue going leave I'm the we the wondering of number are or that I question, of the of course bodies? impact sort and And you go selling small, those can of on relatively shift the

Good Yes. Wendy. are morning, How you?

Fine.

sales and there once are they brand, work separate, right. basically a member and So, with represent they brand the brand joins force the

many So top Once you they generally that times let's with mean, four, at brand the stay promotion, versus for in people of in might brand we Tupperware At are new a brand. as loyal they know Fuller the level, own Mexico least respective the a Mexico bottom, represent at people speaking, and the in example, just their sets six levels. we they I have different, are that have different the we cross brands. people brands. to I mean, but they five, the little people, completely different do while

their but changing So, ownership. that change by wouldn't

Got it.

materials talked more harder there neutral or on or Okay, on those of and margin? or those pricing Are some will for sustainability expensive new margin? gross fair that for products. raw using stuff and whatever products, or question it then the about enough. notably up is source any you price the you the second impact ingredients to And to Is

Yes.

our for the with margin of obviously to to and largely its your a through would maintain and so to to third-party sales. we profit we're the investment build expectation then out So Today, be continue incremental accretive the partnerships sourcing we'll we sourcing. and investments, the we to we've opportunistic pricing answer add and make that that to some right look of organization say, portfolio as suppliers organization. maybe earlier will Obviously, and mentioned on incremental leverage them grow XX% third-party Wendy, is I choices driven, to the our been what our with ROI can start manufacturing continue and that out the I but margin would start products both to all improve sourcing form as So this as right? build even

enough. Fair it. Got

Let thought. me a just add

Okay, got it.

consumers. let's add it going product Let We're is speaks to to the thought. nature cost brand that's sub-brands would we're and price of and around offering sustainability just sub-brand me just the up, we than because the we that be that developing going a say to be the if to higher consumer

disciplined. we're very to So be going

gosh, are social IT of Tupperware and to Fair digital this enough. in of and to add going those doing building about products, my investments component the that of wondering just is what you're was And consumer kind with, primarily my Tupperware in People terms that? on with do realize new concept on on with making lot that think timing increase of awesome. strategy? be look do focused sounds a year has question, Network, then of sort more kind not to chain, in at didn't a of sort or you is media, on people the the And internally last pull the have the that? of like it consumer But that stuff. the get a as brand familiar of supply why side, just Food magazine you're which I'm thinking your oh What's How consumers, pull

to Wendy, eventually. are So things going come all

start and which Once housing put works need us our we're we housing the The order, to so the right you going pilots right again first the then get better know brands thing everything, and and AB channel is the and that we get what's products, we for and see to to and investing channels one outlets doing able on. start different media, in be order.

So it's I finish need to the the guess whole in us with ready just strategy. We horizon. getting up,

That you. the to concludes I the Fernandez. hand question-and-answer back Miguel session. over Thank call

three-year plan. return well way ramp Thank of our our you. successfully We believe on we to execution are

with able growth behind our implement your consumer-centric XXXX our become strategies we're time organizational rightsizing a our more Thank and During today. now to time company. shift you resources to and changes for us,