Earnings Gainer Tupperware Brands Will Ride the Eat-at-Home Trend

Food storage container company Tupperware Brands (NYSE:TUP) might not seem like a “sexy” company to invest in. Most traders probably don’t look to TUP stock for fast-paced action in the marketplace. Perhaps they should look again because this stock has been a serious mover lately.

a tubberwear container on a table (TUP)
Source: nipastock / Shutterstock

In the era of the novel coronavirus, seemingly boring stocks can suddenly be quite exciting. The potential for outsized price moves in stocks, both to the upside and to the downside, has increased in 2020 due to the unusual circumstances.

As we’ll discover, TUP stock is a textbook example of what can happen when a “right place, right time” type of company is met with an extraordinary situation.

And in light of Tupperware Brands’ recently released fiscal stats, a strong argument could be made in favor of owning TUP stock today.

TUP Stock at a Glance

From 2015 to 2018, TUP stock chopped around and pretty much went nowhere. These were frustrating years for investors of this stock, and things would only get worse.

2018 and 2019 saw steady declines in TUP stock as the share price tumbled from $65 to less than $10. Then the coronavirus pandemic happened and TUP sank even further. At its lowest point this year, the share price reached $1.15.

However, the bulls will be happy to know that TUP stock is recovering quickly. Oct. 28 was a particularly pivotal day for TUP traders as the share price shot up more than 35% on that day.

Value-focused investors might hesitate to buy a stock after it has gone up so much. Yet, we need to remember that TUP stock has been much higher than it is today. Besides, changes caused by the pandemic and the company’s recent fiscal data should cause any skeptic to reconsider.

The ‘New Norm’

Once we make the connection between Covid-19 and food storage containers, Tupperware Brands’ third-quarter earnings data make perfect sense.

The connection is due to a major chance in people’s food habits. Many people are choosing to cook and eat at home instead of dining out. Consequently, there’s an increased need for food storage containers.

Tupperware Brands Executive Vice Chairman further explains the timeliness of his company’s offerings amid a global pandemic:

We are aligning our brand more closely with the new norm of people cooking and eating at home with products [that] help them save time with food prep and products to help them save money by keeping their food fresher and safer longer.

So, the “new norm” isn’t only about avoiding contact with other people. It’s also about saving money, and Tupperware Brands’ products can help people cut costs because they won’t need to throw out their leftovers.

An Earnings Blowout

Does all of this translate to a better bottom line for Tupperware Brands and its stakeholders? You bet it does. For any doubters out there, we’ve got some quarterly data that ought to change your mind.

For the third quarter, Tupperware Brands’ North American sales increased by 42% on a year-over-year basis to $146.3 million. This marks the highest level of North American sales growth that Tupperware Brands has seen in two decades.

And the growth isn’t limited to North America. At $121.2 million, Tupperware Brands’ quarterly sales showed a 23% increase in Europe. Plus, at $69.6 million, the company’s third-quarter sales in South America grew by 4%.

All of this had a positive fiscal impact as Tupperware Brands’ quarterly earnings per share (EPS) reached 65 cents, a result that was 81% ahead of the analyst community’s expectations.

The Takeaway

As you can see, there’s nothing boring about food storage as TUP stock bulls are regaining control of the price action.

In these unusual circumstances, food storage containers are a hot item and Tupperware Brands is marking extraordinary sales and earnings, a trend that could persist for quite a while.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.


Article printed from InvestorPlace Media, https://investorplace.com/2020/11/earnings-gainer-tup-stock-will-ride-the-eat-at-home-trend/.

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