Fundamental analysis
Tupperware is an American company that manufactures plastic cookware and kitchen accessories for the entire world. It belongs to the consumer durables sector. The hallmark of such goods is that they last for more than 3 years. In the case of Tupperware, much longer.
Purchases in this segment took place mainly at the time of the Covid pandemic19 when households were stocking up on various material goods. The company experienced a rapid increase in sales and the share price skyrocketed more than 10x.
In Anglo-Saxon countries, the quality of the company’s plastic tableware is renowned. Even the name Tupperware has become synonymous with plastic food storage boxes, regardless of manufacturer. But even that hasn’t stopped the company’s sales and share price from falling. The company also has stiff competition from cheap plastic kitchen equipment from Asia.
Tupperware is trying to reboot itself and reposition the brand to be attractive to new, young consumers. So far, it has not succeeded.
Results
The company’s 2022 sales were down 18% from Covid’s 2021. Despite still strong sales of $1.3 billion, the company generated a loss of $28 million. In 2021, the profit was $152 million. The company explained the loss by an increase in input prices, lower product margins and an increase in effective tax burden.
The company did not do well especially in China. In contrast, the South America region saw a 10% increase in sales.
The company does not pay a dividend.
Technical analysis
The stock has been in a downtrend since early 2021. The moving averages last crossed on May 10, 2021.
The RSI, on the other hand, is in the overbought zone. This is due to the rapid rise in the stock over the past few days. The price has climbed by more than 300%. Tupperware has come under the radar of organized retail traders on social media. They have arranged to buy the stock together for profit and also to inflict losses on funds that trade the stock short. The company thus ranks alongside companies like GameStop and AMC. Collectively, they are referred to as a «meme stock».
The company’s volume has multiplied by a hundred in the past week. From the usual 500,000 – 1,000,000 shares traded daily, 100+ million shares are now traded daily.
Conclusion
Tuppeware is historically a very successful company that has fallen victim to cheap competition in the form of cheap plastic boxes. Excluding Covid, the company’s sales are declining and repositioning is failing. Fundamentally, the stock is failing. According to technical analysis, the stock is also in decline.
On the other hand, that doesn’t seem to bother many retail traders who invested in it and helped lift the share price several times in a matter of days. Tupperware is now on a roll. For how long cannot be guessed. But for other meme stocks, the interest has been several weeks. So the evolution of the stock may yet be interesting.