Federal Reserve and Interest Rates - The Federal Reserve cut the overnight lending rate by 0.5% to approximately 5%, marking the first rate cut since 2020, which was larger than some market observers anticipated [4][6][12] - The Fed's actions are seen as a response to inflation and growth rather than a direct driver of interest rates, indicating that the central bank is reacting to existing market conditions [6][7][9] - The debt market did not respond significantly to the rate cut, suggesting that it had already anticipated this move, while the stock market reacted differently [8][10] SEC Rule Changes - The SEC introduced a new rule allowing stocks to trade in half-cent increments, aiming to improve market efficiency by tightening bid-ask spreads [13][14] - Another rule will cap rebates for less liquid stocks, reducing the rebate from 0.3 cents to 0.1 cents per share, which could impact trading volumes and market structure [15][16] - These changes are part of a broader effort to enhance market efficiency and price discovery, reflecting a shift in trading practices [16][17] Tupperware Brands - Tupperware Brands filed for Chapter 11 bankruptcy, struggling to adapt to changing market conditions and consumer preferences, with 90% of its sales still coming from direct sales [18][19] - The company was slow to embrace e-commerce, only launching an Amazon storefront in 2022, which contributed to its decline [19][20] - Tupperware's bankruptcy is attributed to cash flow issues rather than unprofitability, highlighting the importance of cash management for debt servicing [20][22] Housing Market and Dream Finders Homes - The housing market index currently sits at 41, indicating neutral sentiment among home builders, with potential for improvement [23] - Dream Finders Homes employs an asset-light business model, using option contracts for land acquisition, which mitigates risk and reduces capital intensity [24][25] - The company has seen a stock increase of over 70% since 2020, and while it has higher leverage compared to competitors, it benefits from strong insider ownership [25][28][30] - Dream Finders is trading at less than 12 times forward earnings, suggesting it may be a compelling investment opportunity despite its recent stock price increase [30][31]

Company Overview - Tupperware, a company known for its food storage containers, has filed for bankruptcy in the US, seeking approval to find a buyer as part of efforts to protect the brand [1][2] - Founded 78 years ago, Tupperware gained popularity through "Tupperware parties" in the 1960s and 70s, where products were sold in social gatherings [2][4] Financial Challenges - The company's financial position has been severely impacted by a challenging macroeconomic environment, leading to the decision to start bankruptcy proceedings as the "best path forward" after exploring various strategic options [3][2] - Tupperware's sales have been in steady decline since 2018, despite a temporary improvement during the early days of the COVID pandemic [5] Product Evolution - Tupperware has attempted to adapt by incorporating more sustainable materials into its product line, including glass and stainless steel, as well as using plastic waste [5] - The brand was originally developed as a solution to reduce food waste, but has struggled to compete with cheaper and more environmentally friendly alternatives in recent years [4]

Tupperware Brands Corporation has filed for bankruptcy, just months after the iconic American food storage container maker shuttered its last remaining plant in the U.S. amid financial woes. The company formally announced its voluntary decision to initiate Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware on Tuesday. The company listed $500 million-$1 billion in estimated assets and $1 billion-$10 billion in estimated liabilities, according to bankruptcy filings, which showed ...

Core Viewpoint - Tupperware Brands Corporation has voluntarily initiated Chapter 11 proceedings to restructure its operations and protect its brand while continuing to serve customers through various sales channels [1][2][5]. Company Operations - The company aims to seek court approval to continue its operations during the bankruptcy proceedings and facilitate a sale process to support its transformation into a digital-first, technology-led organization [2][5]. - Tupperware has appointed a new management team and implemented a strategic plan to modernize operations, enhance omnichannel capabilities, and drive efficiencies for growth [3]. Financial Context - Tupperware's financial position has been adversely affected by a challenging macroeconomic environment, prompting the exploration of strategic options leading to the decision to file for Chapter 11 [5]. - The company intends to maintain its independent sales consultant agreements and will file motions to support ongoing operations, including employee wages and vendor payments [6]. Leadership Statements - Laurie Ann Goldman, President and CEO, emphasized the commitment to serving customers with high-quality products throughout the restructuring process [4]. - The company is focused on providing essential flexibility to pursue strategic alternatives that will better position it to serve stakeholders [5]. Legal and Advisory Support - Kirkland & Ellis LLP is serving as legal advisor, Moelis & Company LLC as the investment banker, and Alvarez & Marsal as the financial and restructuring advisor for Tupperware [8].

Group 1 - Tupperware Brands plans to file for bankruptcy as early as this week, facing significant financial struggles [1][2] - The company has over $700 million in debt and has violated loan agreement terms, raising doubts about its ability to continue operations [2] - Other notable brands, including Red Lobster, Joann, Express, 99 Cents Only, and Chicken Soup for the Soul Entertainment, have also filed for bankruptcy this year [1][2] Group 2 - Red Lobster declared bankruptcy in June, closing at least 50 locations and seeking permission to close 100 more due to management issues and failed promotions [3] - Joann filed for bankruptcy in March, resulting in a restructuring deal that reduced its $505 million debt while keeping its 815 stores open [4] - Express filed for bankruptcy in April and was subsequently acquired by a consortium led by WHP Global, following its acquisition of the Bonobos brand for $25 billion [4] - 99 Cents Only declared bankruptcy in April, with nearly 200 stores reopening as Dollar Tree locations post-proceedings [5] - Chicken Soup for the Soul Entertainment, parent of Redbox, filed for bankruptcy in June, owing millions to over 500 creditors, leading to the liquidation of its Redbox kiosks [6]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________________________________________________ FORM 10-Q _________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the 13 weeks ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from to Commission file number 1-11657 _______ ...

Sales and Marketing - In 2022, Tupperware's active sales force averaged approximately 313,000 members, with a significant portion of sales conducted through independent distributors[35] - Retail sales accounted for 4% of Tupperware's total revenue in 2022, with approximately 50 retail customers globally and multi-channel activity in 22 markets[43] - Tupperware's omnichannel approach in Korea has led to it becoming the third largest market in the Asia Pacific segment, demonstrating positive consumer response to expanded access[43] - The company has prioritized digital transformation and the use of digital tools for its sales force, enhancing their ability to connect with consumers[39] - The Company's active sales force declined by 18% in Q4 2022, 15% in Q1 2023, and 16% in Q2 2023 compared to the prior year[104] Product Development - The company launched several new products in 2022, including the UrbanMax™ Portable Blender and Tupperware Pure&Go™ Water Filter Bottle, aimed at enhancing consumer convenience and sustainability[32][37] Financial Performance and Challenges - Due to rising inflation, Tupperware raised product prices significantly in 2022, particularly in the U.S. and Western Europe, which led to a decrease in unit volumes shipped[41] - The Company generated negative operating cash flow in fiscal year 2022 and expects to continue spending substantial amounts in future periods, potentially leading to further negative cash flow[61] - The Company faces substantial doubt about its ability to continue as a going concern for at least one year from the date of the financial statements issuance[62] - The Company has significant exposure to foreign currency fluctuations, particularly with the Argentine Peso, Euro, and Mexican Peso, which may materially affect its financial results[70] - The Company is facing liquidity constraints due to increased levels and costs of borrowings under its Credit Facility, necessitating cash repatriation from international jurisdictions[73] - The company has increased its deferred tax liability to $24.0 million in Q4 2022 related to estimated income tax, withholding tax costs, and capital gain impacts associated with repatriation of earnings from foreign subsidiaries[73] - The Company has experienced high inventory levels due to supply not meeting projected demand, which could adversely impact liquidity and cash flows[111] Restructuring and Turnaround Efforts - Tupperware's Turnaround Plan aims to simplify its core business and expand into new product categories while addressing liquidity concerns[44] - The company has engaged financial advisors to assist in securing supplemental financing and has entered into a Debt Restructuring Agreement with its bank group[32] - The Debt Restructuring Agreement entered on August 2, 2023, provides access to up to $21.0 million on the Revolver, subject to liquidity and cash covenants[62] - The Company is taking actions to address liquidity concerns, including engaging a financial advisor for supplemental financing and appointing a Chief Restructuring Officer[65] - The Turnaround Plan is expected to result in changes to business priorities and operations, but its successful execution is uncertain and may lead to significant operational impacts[68] - The Company is reviewing its real property portfolio for potential monetization opportunities as part of its restructuring efforts[65] - The Company has appointed a new director with significant restructuring experience to its Board of Directors to assist in the turnaround efforts[65] Legal and Compliance Issues - The company is subject to ongoing legal proceedings, including putative stockholder class actions, which could materially impact its financial condition and results of operations[83] - The Company has identified multiple prior period misstatements and material weaknesses in internal control over financial reporting, causing delays in filing financial reports[121] - The Company has received a late filer extension request approved by NYSE, allowing until March 31, 2024, to file Forms 10-Q for the first three quarters of 2023[122] - A delisting from the NYSE could reduce liquidity and market price of the Company's common stock, impacting investor interest and financing capabilities[123] - The Company is currently out of compliance with NYSE requirements, with an average global market capitalization of less than $50 million and a stock price below $1.00 over a consecutive 30 trading-day period[118] - The Company has submitted a business plan to regain compliance with NYSE standards within 6 months for stock price and 18 months for market capitalization[119] Management and Operational Risks - The Company has faced challenges in maintaining a sufficient complement of personnel with appropriate internal controls and accounting knowledge[93] - The Company continues to face risks related to its ability to attract and retain key employees necessary for executing its strategies[91] - The Company has experienced turnover in senior management, which may create uncertainty regarding its future direction and performance[93] - The Company's reliance on independent sales organizations is critical, and any disruption could materially affect financial condition and operating results[104] Market and Economic Conditions - The Company is subject to risks associated with international operations, including inflation and rising interest rates, which could materially affect revenues[112] - The Company is exposed to environmental regulations that could result in significant liabilities and costs, impacting financial condition[100] - The impact of the COVID-19 pandemic has continued to affect the Company's operations and financial results, particularly with ongoing partial lockdowns primarily in China[139] - Global events beyond the Company's control, such as natural disasters and health emergencies, may negatively impact its financial results and growth potential[138] Stock Performance and Volatility - The stock price has experienced extreme fluctuations, ranging from a low of $0.62 on July 18, 2023, to a high of $5.38 on August 1, 2023, with a last reported price of $1.26 on October 5, 2023[126] - Daily trading volume has varied significantly, from 0.5 million shares to 209.1 million shares between December 30, 2022, and October 5, 2023[126] - The Company has faced significant media attention, which may lead to unreliable information affecting stock trading activity[125] - The Company cautions investors about potential substantial losses due to ongoing stock price volatility and market dynamics[127] - The Company may face significant price volatility in its common stock due to short squeezes, which occur when demand for shares exceeds supply[132] - The Company does not have reliable information regarding synthetic shares and short selling transactions, which may increase share price volatility[133] Reputation and Brand Management - The Company’s brand protection and reputation are vital for its success, and any failure in these areas could have a material adverse effect on operations[94] - Negative publicity regarding the Company or its industry could adversely affect its reputation and financial condition[130] - The Company has been recognized for its ESG initiatives, being named to Newsweek's list of America's Most Responsible Companies for 2022[56]

Our trailing 12-month bank covenant leverage ratio was 4.9, within our recently amended maximum leverage ratio for the fourth quarter of 5.25. In our new amended credit agreement announced this week, our maximum leverage ratios increased. They are now 6.25 for the first, second, and third quarters of 2023, a stepping down to 5.75 in the fourth quarter and first quarter and second quarters of 2024, then stepping down to 4.50 for the third quarter and beyond of 2024. There is also change in the numerator sinc ...

Financial Data and Key Metrics Changes - Net sales for Q3 2022 were $303 million, a decrease of 20% compared to the previous year, driven by lockdowns in China and macroeconomic pressures in Europe [36][54] - Excluding currency effects, sales declined by 14%, aligning with prior trends [36] - Gross profit was $197 million, representing a decrease of 21% year-over-year, with a gross margin of 64.9%, approximately 90 basis points lower than last year [45][54] - Adjusted earnings per share were $0.14, down from $1.19 in the previous year, impacted by unfavorable foreign currency adjustments [50] Business Line Data and Key Metrics Changes - In North America, net sales declined by 16%, primarily due to lower sales force engagement and productivity [41] - Sales in Mexico decreased by 19% due to service issues and inflation, although it remains one of the most profitable markets [43] - South America saw a 7% increase in net sales, driven by strength in Argentina, while Brazil experienced a 5% decline [44] Market Data and Key Metrics Changes - Asia-Pacific net sales declined by 19%, with China down 28% due to strict lockdowns [37][20] - Excluding China, the Asia-Pacific region saw a 20% decline, with significant drops in Indonesia, Malaysia, and Australia [21] - In Europe, net sales decreased by 24%, primarily due to low consumer sentiment and rising inflation [38] Company Strategy and Development Direction - The company aims to expand its omni-channel distribution strategy to reach a broader consumer base [16][27] - Plans to engage younger consumers through partnerships with retailers like Target, with products now available in 1,900 stores [12][29] - The focus remains on building a unique product ecosystem and leveraging brand recognition beyond direct selling [25][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging global macro environment and internal execution issues impacting sales [7][9] - There is cautious optimism for Q4, with expectations for improved performance due to inventory management and cost containment efforts [69] - The company is committed to right-sizing its operations and enhancing cash flow management amid ongoing market volatility [53][54] Other Important Information - The company is implementing a series of cost-cutting measures, expecting to incur approximately $100 million in restructuring costs over the next three years [78][80] - The return of in-person sales events is seen as critical for the health of the direct selling business [14] Q&A Session Summary Question: Details on conversations with lenders regarding debt covenants - Management confirmed ongoing discussions with banks since September, focusing on a five-year plan for flexibility in the turnaround strategy [59] Question: Early read on new programs with Target and Amazon - Initial performance in Target is ahead of expectations, with a limited number of SKUs leading to increased activity among direct sellers [60] Question: Confidence in amending leverage covenants - Management expressed confidence in obtaining new agreements with supportive banks, anticipating Q4 to be better than Q3 [69] Question: Impact of live events on sales force activity - Management noted that those who participated in live events showed better retention and engagement compared to those who did not [75] Question: Cash charges associated with cost-cutting initiatives - Management indicated that restructuring actions could incur cash charges, estimating around $100 million in total [78][80]

Financial Data and Key Metrics Changes - Net sales for Q2 2022 were $340 million, a decrease of 14% compared to the previous year, primarily due to weaknesses in Europe and lockdowns in China, partially offset by strength in South America [40][41][56] - Gross profit was $221 million, representing a decrease of 19% year-over-year, with a gross margin of 64.9%, approximately 400 basis points lower than last year [48][56] - Adjusted earnings per share were $0.41 in Q2, compared to $0.90 last year, driven by various factors including unfavorable currency translation [52][56] Business Line Data and Key Metrics Changes - In the U.S. and Canada, net sales declined by 24%, but operating profit improved by 200 basis points due to necessary business model changes and a 10% price increase [15][45] - Mexico saw a 1% increase in sales, while Brazil's net sales increased by 1% driven by higher retention and service improvements [17][47] - South America experienced a 12% increase in net sales, primarily due to successful campaigns and price increases averaging 17% [47] Market Data and Key Metrics Changes - Asia's net sales declined by 16%, with China down 32% due to ongoing lockdowns, while excluding China, the Asia Pacific business was down 8% [41][20] - European net sales declined by 30%, driven by low consumer sentiment and timing of retail loyalty programs [43] - North America saw a 14% decline in net sales, primarily due to lower sales force engagement and productivity [45] Company Strategy and Development Direction - The company is focused on a turnaround plan initiated in early 2020, which includes divesting non-core businesses and improving capital structure [9][10] - Investments are being made to open new channels and distribution, upgrade systems, and attract new talent to enhance brand accessibility [11][12] - The omnichannel expansion plan remains on track, with early successes in markets like Korea and ongoing tests in retail channels [22][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by global events, inflation, and currency headwinds but remains confident in the turnaround plan's success [12][35] - The timeline for recovery has been extended by approximately 9 to 12 months due to external factors, but growth is expected as conditions improve [63] - Management anticipates sequential improvement in profitability and sales as the company navigates through current challenges [56][80] Other Important Information - The company completed a $75 million accelerated share repurchase during the quarter, which contributed $0.09 to adjusted EPS [54] - A new VP of Supply Chain and SVP of U.S. and Canada Omnichannel Expansion were hired to support business expansion goals [33] - The company is committed to ESG targets and has pledged to promote a circular economy [32] Q&A Session Summary Question: What are the big mile markers needed to transition from stabilization to expansion? - Management indicated that the turnaround plan is divided into fixing the core business and meeting consumers where they shop, with a timeline potentially delayed by 9 to 12 months due to external factors [60][63] Question: Can you discuss the demand elasticity in response to price increases? - Price increases varied from 3% to 56% across markets, with some sales force groups buying ahead of increases, while others did not [65] Question: Have there been meaningful changes to costs since the end of Q2? - Resin costs increased between 9% and 13%, with similar increases in freight and distribution costs expected to continue [69] Question: How should cash flows and leverage ratios be viewed for the back half of the year? - The company negotiated amendments to create more flexibility for investments in turnaround initiatives while managing debt levels [70] Question: Is the executive team satisfied for the journey into new sales channels? - Management feels confident in the current team but may consider additional hires in the EMEA region [71] Question: What is the outlook for the tax rate in the back half of the year? - The tax rate is expected to remain high in the short term due to a mix of earnings from various countries [73] Question: How much investment in technology is anticipated for the remainder of the turnaround? - IT investment is expected to be approximately 50% to double the current spending as part of a multiyear modernization plan [79] Question: Will profitability improve sequentially in the second half? - Management expects improvements across all metrics, including top line and bottom line, despite ongoing challenges [80] Question: What is the stance on share repurchases going forward? - The company does not anticipate additional share repurchases for the remainder of the year, focusing instead on managing working capital and debt [91]