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Tickers in this Article: TUP, AVP, PG, EL, REV, WMT
Tupperware (NYSE:TUP) utilized a direct selling model to hawk its kitchen storage and beauty-related products across the globe. This approach is proving very popular in emerging markets, where traditional retail store channels are less developed. Struggles in its more mature markets are being easily offset in faster-growing regions in Asia and South America, and though a recent stock rally leaves less downside protection, the shares still look reasonably valued. (To read more on companies and their stock price, check out Why Do Companies Care About Their Stock Prices?) First Quarter Recap
Reported sales improved a very robust 14% to $636.4 million. Excluding currency fluctuations, organic sales rose 10% on double-digit growth in the Asia Pacific region (up 18%, 25% of total sales), for Tupperware sales in North America (up 10%, just over 13% of total sales), and impressive results in South America, which grew 59%, though it only accounted for 9% of total sales in April 2011. Europe represents the largest region and saw the top line eke out 1% growth to make up 36% of sales. Beauty sales in North America rose a respectable 3% to make up the rest of sales at about 15%.

Profit growth was more uneven. It grew robustly in the Asia Pacific region and Tupperware North America but fell in the high teen percentages in Europe and in North American beauty. It rose sharply in South America. Total reported operating profit rose 14% and 10% in local currencies to mirror the sales growth trends.

Lower interest expense and one-time charges helped push net income up 18% to $55.8 million while slightly lower shares outstanding pushed reported earnings ahead 21% to $0.88 per diluted share. This came in ahead of analyst projections. (For more information on analysis, see Blending Technical And Fundamental Analysis)

Outlook
For the full year, management sees organic sales growth between 6 and 8%. Positive currency fluctuations are anticipated at 7% for total sales growth between 13% and 15%. It raised its reported earnings guidance to a range of $4.31 and $4.41 per diluted share.

Bottom Line
Tupperware's direct selling model is proving quite successful in emerging markets and should lead to double-digit sales and profit growth for the foreseeable future. Unfortunately, this growth potential is no longer a secret and the stock has rallied strongly this year, gaining about 30%.

The forward earnings multiple is still pretty reasonable at 14.2, if the company hits the high end of its guidance. However, the valuation expansion leaves less room for downside, should profit trends continue to be volatile in Europe and North American beauty where the company must compete with more entrenched traditional retailers including Wal-Mart (NYSE:WMT) for kitchen and storage supplies and Procter & Gamble (NYSE:PG), Revlon (NYSE:REV) and Estee Lauder (NYSE:EL) in makeup and beauty supplies. (To learn more about analyzing a stock, read Analyzing Retail Stocks.)

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