TUP down over 30% on no news. I found a link to a rumor about reduced head count and CEO saying to someone who said to someone that they’ll be keeping a low profile (lack of communication) with investors.
Anyone have anything?
John
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Is this what leaked?
https://finance.yahoo.com/news/tupperware-names-douglas-lane…
Doesn’t seem that would cause a 30% price drop.
Up 8% after hours, for whatever that’s worth.
John
Well, nice timing on the post. Up 13% this morning.
But as for TUP itself…
There is much to be said for the sentiment often expressed by Mr Buffett:
In the long run, it’s better to get a so-so entry price on a great business than to get a great entry price on a so-so business.
Now, almost any great business can have a rough patch–in fact often marks a fantastic entry point if you can tell whether the troubles are transient.
But even so, I have my doubts that TUP counts in the first category.
It’s hard to tell if any given business has a future.
But one starting point: if the business model didn’t exist, would someone have to invent it?
Printed newspapers? No.
Banks? Sadly, yes.
Tupperware?
Jim
3 Likes
Well, nice timing on the post. Up 13% this morning.
I actually purchased 9/16 calls w/ a strike of 8 for $.35 yesterday and sold today for $1.05. Small position relative to my TUP holdings, but it took some of the sting out of yesterday’s drop.
if the business model didn’t exist, would someone have to invent it?
Plastic storage, probably. Tupperware per se, probably not. 90% of our cold food storage is handled by washed out take-out containers. I’ve browsed the Tupperware website wanting to be inspired and left disappointed.
John
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I think Tupperware is an intriguing idea.
At yesterday’s closing price of $8.77, you’re paying $390m for a company with a busted business model but one that still has about $1.5b in revenue for an operating income of about $200m. What else? Well it doesn’t seem like a lot of money for an iconic brand. What about changing the business model, and just selling thru regular retail channels? OK, they thought of that:
• Enter new sales channels
(retail, ecommerce, B2B)
• Accelerate omnichannel
expansion
and
Expanding into new channels is a key component of our strategic plan that will enable us to meaningfully increase consumer access to Tupperware
product. It also reduces the reliance on a single channel and therefore, is expected to minimize the volatility of our performance during any given
period.
Worth keeping an eye on. I agree with Jim’s comments about the business, but there’s a price for everything. I thought about it and passed last year when the share price was much lower, so I guess I’m anchoring on that, but if the share price goes seriously downhill again, I’ll be tempted.
dtb
1 Like
With other, simpler, ways to store food in the refrigerator, I see zero need for Tupperware there. Some folks store bulk non-refrigerated goods in their pantry with Tupperware and that seems like a decent fit.
But… after you’ve bought some Tupperware… or decided you don’t need it… where do repeat sales come from? How long before your addressable market is pretty much tapped out? And then what? Limp along like the present?
Rob
Former RB and BL Home Fool, Supernova Portfolio Contributor & Maintenance Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
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I thing to note about TUP is that its sales people are also its customers, a design feature of MLM companies. A large part of the sales happens from one sales tier to the lower sales tiers. Many sales people join to get products at a discount. The higher tier sales people are often more interested in recruiting sales people than in selling to end customers.
So it may not be a simple matter to go omnichannel. They will actually have to look for real customers not their own salespersons to sell to. They will be faced with heavy competition from other plastic food storage companies, many of them offer quality products at significantly lower prices. Plus brutally competitive retailers from Amazon, Costco, WalMart, dollar stores etc. etc.
4 Likes
They will be faced with heavy competition from other plastic food storage companies, many of them offer quality products at significantly lower prices.
I do believe this is likely one of the main, if not the primary, reasons for TUP’s business contraction over the years.
The other thing that bothers me is I associate TUP with plastic, not glass or ceramic. In the past decade, I have been moving to more inert materials for storage, especially for food. Plastic leaching seems inherently bad for health and the environment. I suspect this may be more and more widespread, too, contributing to their top and bottom line shrinkage.
Like others have said, though, there may come a time when the price is almost too good to pass up.
Almost.
Pete
2 Likes
With other, simpler, ways to store food in the refrigerator, I see zero need for Tupperware there. Some folks store bulk non-refrigerated goods in their pantry with Tupperware and that seems like a decent fit.
But… after you’ve bought some Tupperware… or decided you don’t need it… where do repeat sales come from? How long before your addressable market is pretty much tapped out? And then what? Limp along like the present?
Yes, but it seems to me you could have said the same thing 20 years ago.
I guess my fundamental question is, does the brand have any value at all? If the average guy sees a bunch of no-name snap-top containers for $7.99 at Walmart on the shelf and the Tupperware equivalent for $8.99, would some people buy the recognized brand name, under the impression that the quality might be better? Or because they would fit with Tupperware stuff they already have at home? Or because they could make some lame joke about having been to a Tupperware party?
$300m seems like it could be cheap for such a well-known brand name, but I’m not sure. And in the meantime, they can live on with their roughly $100m in operating earnings, and see if they can succeed with the omnichannel strategy. That is probably a bit of a longshot, but even if it only has a 10% chance of working, that would be worth something. Maybe I’ll buy it when it’s priced at $100m.
3 Likes
if the business model didn’t exist, would someone have to invent it?
I thought I’d just add that I’m not 100% sure what the answer to my question is.
For one thing, the company is really all about the sales method, not about the products per se.
Maybe if MLM and (especially) product parties didn’t exist, then someone would in fact have to invent them.
For the products–they’re adequate.
Our family is much more into Frigoverre containers. (glass container with plastic top)
Much nicer for seeing what’s in there, and you’re much more confident the glass won’t pick up or impart any volatiles.
Highly recommended. Tons of different sizes so you can nest a lot of them when stored.
The Tupperware cake totes are admittedly unbeatable, though.
Next thread we can all trade recipes.
Jim
7 Likes
Next thread we can all trade recipes.
That’s what the LVLT board was for! I still remember someone posted a recipe for a deep fried whole Turkey over there, I never dared to try it though I still find the idea fascinating. Perhaps I should try a whole Turkey sous vide confit, at least I won’t risk burning the house down 
Perhaps I should try a whole Turkey sous vide confit, . . .
+++
+++
Make that a TurDucken!
Make that a TurDucken!
I’ve never had Turducken, so I don’t know if its worth it but it sure is a lot of work and I’m a bit dubious about the whole idea of cooking birds inside of another bird with a sausage or oyster stuffing.
Cooking it sous vide is probably a bad idea. You basically cook from the outside to the inside, with such a huge mass it will take hours until you reach the desired core temperatur which gives salmonella and other bacteria on the surface of the birds and in the stuffing plenty of time to grow. It’s very different than cooking a big solid piece of meat like a prime rib.
Another problem is that the different birds and stuffing should be cooked at different temperatures and different time for optimal results. If the stuffing has reached the desired core temperature after say 7hrs the Turkey breast will be mushy.
Thinking about it, you could probably cook the birds seperately, assemble them then and crisp it up in the oven.