Tupperware Brands (TUPBQ) 4 Aug 212021 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Tupperware Brands Corporation Second 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]. to Jane conference Investor Garrard, like first to Relations. now today, speaker Vice would hand over the your I President of Thank you. Please ahead. go

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

will Safe We Harbor our with statement. begin

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

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

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

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

creating channels Cost iconic to we structure, ability into our many to brand our across you, structure, three-year Thank make morning, distribution. good And business. business take into direct We're selling fixing of XX Jane, and continue capital the new and core areas our over of the everyone. turnaround plan. now months progress

business and infrastructure, omni-channel our as drive sales quarter, we investments our consumer in sized in future to our support centric and to selling and core growth marketing, to investing sheet new will XXXX in strengthen our our make will that us needed the the evolve enable believe balance XXXX right such our business current investments We XXXX. efforts. business business. and growth talent accelerate continue and expansion We're in in functions that direct both During to we the adding necessary make to the

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primary XX We one that for and around reason. have years been is for

every for channel and day. products one that generations. trusted provides business, our been omni-channel to the better to our Our future access products gives have new a our platform brand selling to ways homes in nurture new loved new around investments an consumers, and world making a build grows bigger We're direct

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have now we markets. in available e-commerce XX direct-to-consumer Additionally, functionality

let retail Vietnam. Now, business-to-business our are to business turn include and expansion importers, China, XX% programs, as as the of specialty such sales revenue, and such sustainability, in distribution and retail year-to-date me studios Korea were loyalty channels QVC,

brand dramatically rooted Tupperware Pro will and to new into channels build branded our pricing to creating while the us as Tupperware efforts believe such allow this develop strategy to channel product expand conflict. We brands right business right is and the sub expand in of Our house. Chef distribution, minimizing Facials a mix,

and on more explain around drill me a more developers. our Let some bit down about expansion business specific

Brazil, more programs brand retailers progress developing of loyalty presence. relationships support large Europe. and while major our relationships retailers, We're making improving in Mexico with good BXB Our

Our between this this and over expect BXB million million be $XX sales $XX annually, we $XX to been have year. historically million and

national the products important XX strategically model. direct end before we sell U.K. presence. selling open agreement to an Prior and being year. are and in to an a in the expansion products goal into also products this markets through distributed best incremental sold years be through finalize material, strategy through open Tupperware our don't theme a materials of Rather, profitability promising the market to includes or for the in In the important important here Another strategies. intended part agreement National on parks Panama. across has are the important country saw in important the markets ECO+ of provide markets. quarter the using help omni-channel line we to the The cases branded and business an found markets number two of national some in last Honduras product limited important an In distributor. This We new selling our These as now through with sustainable physical specifically this quarter, into third edition model markets reduce some we whereby the partnership the plastic our profitability. is for we're quarter, in limited products be XX Park new sale are with A made Beginning parks. with can this sustainability taken product very pillar, to materials. waste that in made part important innovative through hope U.S. we which markers we This time. into mixed moving have of business recycled renewable products parks at the

provide a update. product let Now, me

in you important subsegments, to to product meet know innovation progress and social of some As and us good is needs making area. address all we're this the consumers

sales than XX%. was year. last quarter. sales second the XX.X% percentage quarter, of year up X.X%, U.S. of Brazil which for And contributed Canada For second X.X% XX% and up in prior Mexico XX% products new higher contributed products from new the is

Environmental, at last XX% to largest XX.X% of Our XX% preparation continues be than at higher last our versus it and year. I last is followed XX.X%. category up like by conservation XX.X% went sales. put category and down Social also year of categories slightly And on XX%. is a strategy. of at about ESG flat go year sales versus revenue And to Governance Kitchen give on product update entertain the would brief

goals, aligning objectives. strides refine that with our in quarter ESG made have including performance our last We great to the employees

our developed internal cross ESG have of support We the Directors our group level. with next to functional working efforts to to of Board an go the take

is our this ESG horning look align focus, Also, working progresses, sustainability this future social every education us impact and efforts our goal sharing area. day. social to targets, a we're and to to more area initiatives and purpose long-term on forward our government in better impact nurture brand I training Our

our the key Looking next priorities following. in few to quarters, the XXXX are

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

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

Thanks, Miguel.

more to reflecting year in on favorable benefited compared basis. sales from rates a XX% last quarter Growth by million, a were FX X% $XXX to Second of increase an reported year-ago. about the compared was quarter

core working, fourth largest BXB ahead A the the Our our business growth since highlights our quarter market $XX in further in point new the by Mexico the U.S. our our the for more channels, expansion, quarter. stronger in QX, XX% Tupperware. revenue our dollar for that into driven From of strong of performance Brazil the that sales plan. of improvements large area in to was in build Canada, to lies confidence of consecutive by our investments increased the selling perspective, proof our than the increase some geographic quarter driven is than addition direct turnaround were expansion markets, or strategy business marks second more and growth of contributed million growth and we're XX% and opportunities a to beginning double-digit supporting making importer X% support continued a our

expansion a of importer brands, key growth is and of both BXB long-term sales, Tupperware As and represents significant opportunity growth our strategy. representing our XX% total about pillars for with Miguel mentioned, business markets

XX% by the of and of was a active social Turning specifically more revenue us, new XX% decrease increased adoption sales orders, data partially sales North the to time. increase performance the place in increased in average America by now and priority sales promotional quarter to In implementing growth driven the digital merchandising higher productivity. increased in active We're we Eastern XX%, more Mexico Mexico was a sales quarter decline as analytics, strategies, contributor in XX% performance The Germany, believe product up productivity offset personalized BXB average for Europe, offset increased for programs in sales than are U.S. in regions, strong XX% force for sales key growth X% the a our and in and media. force to force. sell utilization Austria, by for will Europe. the over which XX% make the Central partially productivity Tupperware of it major force effective strategic drive combination and a force tools, loyalty in innovation, and by sales retailers our websites with the to driven easier in major them In X% sales increased XX%, Canada,

the by almost a for XX%, than sales combined XX% XX% South activity quarter. force productivity where with Brazil, more increase a predominantly driven increased in in America the increased increase XX%, results drove sales

recruitment incentivize our our COVID effort in deploying in impact While regions. to that strategies continues retention force in Brazil, negatively sales to an targets efforts and we're

evolving Looking outlook initiatives will into we loyalty we're this approach help our XXXX. in BXB our centric well important forward, as as in program. market more constructive head support become a Brazil we growth as e-commerce as These strategy initiating a consumer for

compared Asia China, and studio a XX% openings. slower to primarily was in China, closings decline including China region year, including was as the a more pace than a XX% flat down of excluding result new last of

for we believe potential the brand holds continue disappointed to China the While long-term. great ongoing with Tupperware weakness,

team plans. local While to pipeline locations. of efforts be studios strategy this and we'll in the China, the to of Gross efforts channels the the costs, segmentation was of you products impact retail that such of innovation our growth inventory basis at for a see ensure as with midst by of will to turn more relevant we're have flagship the update leadership change fourth create working into a of turnaround favorable carry-in combined e-commerce with volume higher to the in growth our important continue begin our product studio in supported new a in In year-ago to and look to profits competitive margin pleased marketplace. by XXXX where competitive Once pricing. is owners XX.X% to franchise higher elevate feel points consecutive and the will lower more and strong than driven with plants. now the XXX or product a manufacturing market, These brand again, we'll revenue help develop the studios expand quarter

forward expect and result as logistics. a a higher we do Looking higher the year-ago, half, costs primarily resin to second versus of product

adjusted million. we sales comes the higher year. largely portion XX% and XXX increase $XX in from item, However, for basis of our actions. by continue reversal benefited percentage tax we when XXXX as a impact the coupled will that savings of of largely overall which a through of supply we neutralize year Of reported efficiencies in a one-time incremental reflects of investment turnaround of plan XX.X%, was sales been that higher the in gross favorable the the believe tax these basis turnaround last that would points as Brazil, in XXX non-recurring costs of million can a SG&A primarily in drive investments, and have back were of COVID-XX we resulted than impacts. $XXX efforts percentage or prior sales to operating a quarter. XX.X% the U.S. increases, the of SG&A last freight that The with a costs Adjusting price chain reserve with associated ruling discussed add points

the FedEx to timing previously the IT demand year to this will yet majority half as the in expense of strategy, tax we quarter new related investments freight higher the have be planning associated the surcharges infrastructure second well be listed. In back from and acceleration higher to digital carriers regard increased the experiencing to differences As communicated, investments of the along costs, from shifted costs of third. the with as that we're with

offset force seeing also to the in business we're we units effort using to X shipping our in an carton. a physical related direct model limitations the our per This over shift and U.S. carton sales versus consumer more our to decreased fulfillment. packages in X.X However, distribution order for In COVID-XX, the resulted to per began end sales grow carton per as and from

ways more a be area. we'll we expect this we improve this to to efficiencies trend and and optimize omni-channel As in shift approach, to continue working on

sizing contributed to $XX.X Over investors reversal million. million EBITDA tax focus our it's to as the quarter, as core and The as sales. income the delever an $XXX improvement gross that's EBITDA second turnaround XX.X% This of continue business right Allow reflects and a important business the of touch in structure. our of $XXX the our adjusted of the or profit stabilizing the of I the results and adjusted plans. end capital many XX-months improvements one-time adjusted was Brazil of me trailing we at reserve June $XXX evolve of to part with on last to million $XX operating the know metric million year versus million briefly on of

actions let's in review spending debt operating tax average higher was EPS cash negatively lowering, in due inventory the preservation the mentioned In on add Australian for our our liquidity early In quarter. furloughs, to was for associated from the as as improve can is higher at a you through like year. sales actions lien nearly to focus of cash announced quarter from U.S. quarter we $X.XX of and Now, were of EPS of did the impacted COVID year, year. impacted The demand, also capital in spending Property GAAP improvement divestiture current tax last previously basis was year the by resulted $XXX the press XXXX which balance flow $X.XX normal versus includes $X the early reconciliation extinguishment and of purposes including of and prepayment well savings quarter, the to and to flow in in The by of on ratio million covenant and second was release debt the $XXX million second aggressive $X.XX. in shift the turnaround which payables. the on adjusted prior level adjusted from the a profit reduction benefit also Higher EPS portion that the debt for investing with turnaround Adjusted our total X.XX% on reflecting Profit loans, last by our already Brazil for in plan service a the plan increased levels last versus the a together from more rate. specific covenant by and the in the an while to one-time the EBITDA items such offset to debt back communicated. XXXX the EBITDA were last $X.XX prior quarter. million, prepare EPS second million higher year. we compared of year, reversal We a with term below we're like recent EPS reduction $XXX debt markets year, debt markets a lower Cash sales profit the X.XX%. the In saving year, returning million intense earlier by was and $XXX largely required by inventory of see Canada. and our X.XX% China prior

repurchases no have share our recently and announced While period, self-imposed repurchase approved a million, program $XXX it occurred during approved announced was of so board new that blackout we a to-date.

financial understatement regard XXXX, minutes The XX-K/A amended $X.X is a footnote the annual the no disclosure our will disclose and be in summary, only and File change I'd report required. million our take perspective, in intent to to previously to an the release to restatement statements want to to million with period income of the administrative fiscal matter. of a In and prior a quickly on financial corrections for from overstatements few total that statements income this issued morning years. net amend the year XXXX. press to in to like I consolidated from net emphasize a quantitative touch outer $X.X Turning

its XXXX Tupperware adjustments to related in As the a company and internal a Fuller in financial Mexico. to controls and material XXXX, over reporting business reminder, related made weakness disclosed

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Instructions]. [Operator

from Your Wendy with Citi. Nicholson is first question

line Your open. is

morning. questions. good couple I had a Hi,

conservation target I'm you target as what such I of a important is story. XX% you have focus sales. think And an called or innovation, out of housekeeping for be long-term have First of a overtime? on wondering, sort food will of Do a that you all, you item, is maybe the which I your if think just Miguel, part

believe we for targets Wendy. Actually, we Thank the you because enter sales, have categories. can we percentage Hi, into company in morning. of of more terms don't that Good your question.

respect to we even categories growth with other this into. category on So have enter even that if from keeps conservation new food more growing

channels. it Again that your sounds thing new the question omni-channel again, any is progress kind knew and into non-direct actions? on expansion get enough. out then And you of And XX%? beginning my making, this like the to good XX% same target. fair second how distributors? progress goal you've making you're those set you're I But distribution of feedback Okay, development is sales whatever selling on your just coming channels. they're that are How from from far viewing the of And

so company. the have something is a completely you never that right. as This Yes, for know, new we is this done, muscle

we're of the making we channel, bigger because management one have any more level markets, our we to in the So is that in good every gotten markets is so more that The in that allow response those positive us things. very we've thing time touch progress do very positive.

So that means we very to that And want of that with as the brand strong. people work is us. lot expected a there's

very positive. the So us, in - help in also, that building in the for and up There's that that people we're skill engaging the that's we're doors company muscle can open We're delivering. the us meantime. set, build but for do up with

driven very every brands. you - is the that also design And structure we to needle. to our So what close I channels. brands to we're sub already that day a to moving marketing share get our be three we're experience to as have to learning bigger be been And I us. you with it's it's for But in is we're sub is going that's that going with the But know, markets can years, guess a these around the to different all and organization going to number. terms in because of my about us, XX%. we're going goal when be obviously, hard - Obviously, be by tell, but for would going

more into Pro by going we we're kitchen. go that two Pro a our name this going in Series Tupperware premium and stores, series, the we're as competitive. where also lot which the specialty we're see is where The with you price going professionals is with a brand Essentials, first might Chef be to targeting is can And

So CPG direct now typical as shall more so a a a company. some selling than company parts company of in look

Fair enough.

Okay.

then you the the Sounds for we fantastic. tough give here know third top-line a And maybe quarter. year-to-date anything guidance? in hit want third Are likely really sales to give to-date question, maybe that is here sudden all don't of outcome. comp too you're much mid seeing we just you growth the down growth I quarter us the my Just great. frame But down obviously you kind last talking has a And single-digits guidance. But directional can been any potentially can us quarter Sandra in double-digits? so of we third

quarter? when So we third of get the unpleasant end the there surprise to isn't an

Yes, Wendy and we we that into as past of much the in comps what said tougher. reiterate are just of second get the kind the I'll half

QX So QX. to just remind year XX% and were in we up everybody, XX% last

So - think those difficult. script more much, much as in into both from our be the comps areas, will heard we enter continue was I efforts we It you the today, right.

business Our our business as direct core expansion. selling as well

a talked we today And growth the of what so have we truly the what theme is about we believe on in that platform. turnaround plan

of double-digit comps. right have around we're businesses we're both in the really growth areas. drive those But of we necessarily forward. that ensure growth that to in been skills. doing investing and as think growth we everything to deploying tools can a say go platform both harder Don't obviously do our right We're the So we

enough. much. you very Thank Fair

question Linda D.A. from next Davidson. Bolton-Weiser is Your with

is line open. Your

thank Yes, you.

a kind direct you was bit I So this little could about. of import if import wondering more about - program talked explain you

exactly Just or sold regular it and a imported product is And retailers? the sales your being and Thanks. channels into product you distributed what who are through into is once this that? is to going is other - market force

morning. Good is Miguel. Hi, This Linda.

the simple. very So is model

I'm smaller just say options, two is Let's we're one going that this because Honduras right? open. have put to We country,

we And it. all because and So get we I'm a have money. the two small, those be, and options. painful it office, costs. people And One is is beginning management, very call obviously, to would the office, be set to to losing business up set train up going higher have an it whole at would

reach, sell to business The there to that of Honduras it settled is models family other the it product, be get them into a business or could family option, important a the wealthy in with another to be innovation. we reach could is with materials, out support with them or to, which them business, is our marketing a family a with latest and bigger already product, we obviously, agreement big,

our policies, for day us one higher And the freedom, to we And to management. the to our another day, these first few it as so under them give have And port, they of them, access right and been they a making wherever retailing obviously, brand we on. procedures, also the one XX sometimes call. we contacts, the we channels, of we they to to give we to and that we or or is need and mentioned in marketing, selling, we're to from direct and want e-commerce, if own the started product now expect Honduras following come from to the whatever we how to to to working we go, close all we more they limits markets do, on to off deliver U.K. suggest biggest we And their go agree. but strategy, the year go to get is the one sometimes have to have profit it want, the then just pick up obviously next level in

them behind understand for as the allow I they why U.K., of it? with to sell distribute still the like big support that's you the the would fit market freedom a So saw corporation or

then TV selling go be be like and U.K. the direct probably channels, first. going retail the to that. things, selling channel first the direct-to-consumer going selling, last is into the to if think it's like in through in direct But direct would But and one. I things we QVC going we're be last go And think going or probably type retail Actually, exactly. U.K., I Exactly, to

implemented pricing talk your it Okay, kind you the everything and you've that great. implemented, kind of the like so at through point innovation you will it about you what inflation? can be then And mentioned, pricing can offsetting the fully so or like of product it Is far? on more new implementing be

little in the we're pricing. expect resins some products right, you lot next price there's products, down you your to come as that, year. progress increase no we that Linda key in comparison. easier So, it's a to Also, know But with should the a bit prices for because in even know, making

or So price out don't want of to the market. over we ourselves price

basis. and make little you them this detailed important to on XX% with making our get science a is XX%. we're know, by that a very they our distributors product bit right. can instead sales gets XX%, and XX% it the XX% temporarily or product XX%, we art, is And of discounts, of analysis So as they work so force thing other making where can and And

in their pricing can adjust they transactions. their single So own

up not fact up consumer it. price consumer. to us So still because mean still have need and be make, they the very price profitable. And a they direct that feel is a the business, as is buffer we the helpful to They consumer. they to probably doesn't that the selling where And this doesn't between can us

some cases, them with in that we work So them become ask buffer. to to

to both spending and incremental million $XX catch $XX the in then that the about million first to And of half? was how had you quite of much this in I quarter terms of year, didn't if Okay. quantified had that you talked the

continue in to investments, Yes, infrastructure is IT we some half, of but that majority will didn't come we related further the in incremental back spending QX, the specifically year. as quantify half of later did do tax majority planning our strategy more of occur will the that we that the to it, accelerate the investment in

you're process the studios number of you to about even China? are can before and what seems do number closing working just it kind or the Okay. were kind you you because the of that talk in be me about reduced on more And that are little Why in closing talking growing can business. you a know the and studios they do like, of said that change But of bit, China of I you kind to somewhat? were to want

is very As Linda, So difficult China obviously question, know, circumstances. the right? you biggest living we're under

China. to So go been we haven't physically to able

little it But is bit for makes short us. more product. that answer difficult So a the

the all the I me, than, think than been years We're seven you And products. is sold has got three in to reacting product China years. many If in that And for less that's to that last market ask we've the innovation now we've less that. relighting, several ideal.

market. you product, know, to there's as a time investment the it lot some behind of product So to takes bring

where to or a So of your once number going lot is market, our keep that innovation not want that to demanded we down quarters, three studios, a they're the areas then traffic next we're the consumer, the you by in even of closing but that is product to have, call we'd is brand. studios good to for the a it's bring the of one now, two that of not high studies neighborhood the image Chinese the big lot them that grow also a we're some students think making lot of easier they're one equation the in what have really open, the we also shifts, whole in studios, right we shifts

invested idea going feel a in physical of product, think to first locations, we are way much you to professional, of and studios, we of number So of of way, a but much the not And should coming should good be they're key and timing look, is them, increase combination more an to hope only that pretty effort lot up how they lot be looking pretty with to priorities. a page the their this also of our the higher. productivity we studios how

the able we're for the I'm we And product area to product, of is, that's I now The were is products be, to for there that And going new on that sell ideal. were going that it portfolio to call obviously think e-commerce. innovation e-commerce it also it's us. to other used be whole But some investment going second to to in one not, e-commerce. and past the sell relates big

think I you is keep we all Hector my as turn And Chinese know, shift the is and were of is another you the time, Sandra, all we around making going there. one you how on that I where leadership. China. around. this to a And China, we're this lot in fix spend with market time updated progress But we'll So, to take know everyone focused is turn more

topic was flattish you than said on just Okay, thank had Asia then if you the exclude Asia, we're the the of you. Rest of since And Asia. China,

they on markets? going Have there they on other in bit guess impression is what's with just or was were growing COVID those slowed what's Rest So better. a impacts Asia? I going little the my of of or kind

Yes, it. you've It's got COVID.

think would one contributors, of numbers better have biggest I I think lot would our it's a Malaysia, a lockdown. full shown of in lot without been we better, we COVID, have

we looking But have also single teams, new good leading management are progress one we're was in And some we're out those were it's in thought year-ago. it road indicators by COVID that in where the not be countries We to Déjà COVID APAC. now. like pretty are of of every bumps indicators we going vu, the much But is much better. those like of all feels a obviously like country making that

we here So go again.

out that what just Okay. in finally the drivers producing are can just in there, Europe? growth of And going actually kind like, then are strong Europe, you you're about talk pretty

them with develop sure making to B, business one to and business, their making we and our BXB is So of basic that BXB training, starts most are that pain with selling, mastering, non-profitable some and the close that force, tools and techniques to good progress see, direct in know the it's the in that the leaders points, are the eliminating A, it's is methods C also product everything sales giving developed. we we're that which Europe sales direct talk service we're the selling stay you our

in going the getting with. to that are even from better, things South issues Europe. the country think dealing comes be better they're and once Africa, continue better And to back all So I is

program, then your is I that on you And do of repurchase repurchase great. finally, ask regularity activity? to hadn't can yet, about done or pretty you opportunistic, said approach you in share share any a anticipate just your Okay, sort your

XXX Linda, shows the so on program, I has we full board of confidence that in have the that Yes, what definitely type liquidity is the situation would support obviously they it improved. have say and

be follow And these repurchases. flow certain the of business it'll it. have and the decision use, criteria and the do leverage best goals to we internal right So use will a those we'll if framework then making based forward cash proceed basically for And capital. or with criteria that's that best our upon provide

Okay, much. thank very you

you, Thank Linda.

for I'll and now no remarks. showing this session. questions call Q&A closing at And further to turn time. the I'm the That Fernandez back Miguel concludes President CEO,

strategies stabilize believe we're our successful centric growth core with become ability continued shifting across we're and implementation to resources pleased a distribution. progress a turnaround of to We we today. our to business, well our with results way iconic execution on time I'm areas you our capital your many brand three-year consumer direct time our made structure, cost more channels our for the And selling new you. Thank take of plan. Thank business of our from fixing of structure, creating and as growth to the of into the turnaround company.

your for Have participation. conference Thank great lot. a concludes you This call. today's safe. a day. Stay Thanks