Why Tupperware Beats the Quarter

Wall Street analysts are a touchy lot, especially when it comes to earnings guidance.

So they probably weren’t happy when Tupperware Brands offered third-quarter guidance in the 37 cents to 42 cents per-share range when consensus estimates called for 46 cents. Even if you remove the one analyst who pushed the consensus up, the Street is still expecting 41 cents per share. So TUP’s prediction is on the low end.

Turns out, though, that JP Morgan did a little research that showed the last six quarters of earnings guidance from TUP was 7% lower than consensus estimates. But the company beat those estimates by 25% each time.

In the studio speaking to Cramer today, CEO Rick Goings said this underpromise-overdeliver approach is part of Tupperware culture.

“We make our numbers,” Goings said. “We say we’re going to do it, and we’re going to do it.”

Plus, he allows for hiccups in the revenue stream. Oil is a part of the plastics production process, and Goings factors that in. Eighty-five percent of sales come from overseas, and sometimes those markets are shaky. This CEO takes all this into consideration before releasing his guidance estimates.

Goings also touched on how his company is often misunderstood. Sure, it makes the durable containers for which it’s so well known. But Tupperware also deals in nutritional products, fragrances, beauty products and even children’s educational toys. So it’s not so much the product as Tupperware’s excellence at direct selling.

And this is a company that does well in a downturn. As the unemployment rate increases here in the U.S., Tupperware’s army of door-to-door salespeople grows.

The number of sellers is big outside the U.S. as well, Goings said, with Latin America, Southeast Asia and Indonesia being big markets. In fact, 50% of the company’s business coming from emerging markets, so there’s still plenty of room to grow.

“If this was a baseball game,” Goings said, “we’re in the first or second inning of it.”

Cramer is bullish on Tupperware Brands.

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