Tupperware, in dire straits, seeks financing to stay afloat

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Tupperware Brands, which experienced a resurgence during the pandemic, is currently seeking investors to keep the company viable and is in peril of being delisted from the New York Stock Exchange.

Shares of Tupperware Brands Corp. dropped nearly 50 percent on Monday following the company’s announcement late last week that it had hired financial advisers to help it secure financing and “remediate its reservations about its capacity to continue as a going concern.”

After the pandemic revitalised the Orlando, Florida-based manufacturer of food storage containers, sales and profits have consistently declined over the past few years. Early in March, Tupperware reported a fourth-quarter loss of 24 cents per share, shocking investors who had anticipated a profit of 22 cents per share.

Sales, which increased as people remained home and cooked for themselves during the pandemic, have dropped from nearly $500 million in the fourth quarter of 2020 to less than $300 million in the most recent fourth quarter.

The NYSE issued a non-compliance notice to the company last week for neglecting to submit its annual results to the Securities and Exchange Commission. According to provisional results disclosed to investors last month, the company lost approximately $35 million in the fourth quarter.

Tupperware has six months from the filing deadline to regain compliance; however, the NYSE may delist the stock at its discretion.

Creditors could potentially summon Tupperware’s debt, which the company is unlikely to be able to repay, according to analysts.

Citi analyst Chasen Bender stated that Tupperware’s creditors appear to be granting a 30-day grace period until the 10-K is filed. Bender added that despite the company’s assertion that it is working to finalise the filing, “the future appears extremely uncertain.”

Tupperware stated that it is contemplating selling a portion of its real estate holdings and other non-essential assets to generate cash.

Tupperware, which experienced exponential development in the middle of the 20th century, hosted its first Tupperware Party in 1948. However, it stagnated in the years preceding the pandemic. According to FactSet, Tupperware experienced negative sales growth for three consecutive years prior to the pandemic resurgence.

Tupperware’s stock price rose approximately 9% Tuesday morning, to $1.35 per share. The company’s stock traded above $4 per share at the start of this year and was near $40 per share at the start of 2021.

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