Direct-selling firm Tupperware (NYSE:TUP) counts Europe as a major market, but saw its reported sales crimped by a stronger U.S. dollar. Overall, though, its business model continues to pay dividends and should continue doing so for loyal shareholders.

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Company Overview
Tupperware is a direct seller of kitchenware and beauty care products across the globe. The direct selling model is different from a traditional retail one where customers visit a bricks and mortar store location to buy their products. Tupperware relies on a gigantic sales force of 2.7 million individuals that serve as independent contractors and receive a commission for selling kitchen storage products or skin care and cosmetic beauty products to friends and colleagues via home, office and social club parties and demonstrations.

The Tupperware brand is the most familiar kitchen-related name. Beauty products are sold under the BeautiControl Amand Dupree and Unire names. Direct-sell competitors in the first space include the Pampered Chef operations that are owned by Berkshire Hathaway (NYSE:BRK.A, BRK.B) while the beauty category is served by Avon Products (NYSE:AVP). Few other direct selling rivals exist, but traditional providers, including Bed Bath & Beyond (Nasdaq:BBBY) and Target Corp (NYSE:TGT) also qualify as the competition.

SEE: Companies Playing Catch-Up With The Competition

Recent Results Summary
Tupperware reported second quarter results on Wednesday. Reported sales fell 5% to $639 million but grew 5% when backing out negative foreign exchange fluctuations that resulted from a stronger U.S. dollar. European sovereign debt worries have driven investors into U.S.-based investments and dollars as a haven from other regions that are seen as more volatile. This played out in Tupperware's results as its more developed markets struggled. In particular, Japan and France experienced softening trends, but so did the U.S. and its Nutrimetrics business in Australia.

Emerging markets continue to do quite well though, and Tupperware detailed that 61% of its sales now stem from these expanding regions. In particular, its Asia Pacific and South American segments drove most of the adjusted sales growth for the quarter.

SEE: Should You Invest In Emerging Markets?

Tupperware took a charge to write down the value of intangible assets related to its BeautiControl, Nutrimetrics, and NatureCare operations. This lowered reported earnings to only $12.7 million, or 22 cents per diluted share. However, on an adjusted basis, the company detailed that profits were $1.31, or up 22% from last year's second quarter.

Forward Outlook
For the year, analysts project modest total sales growth of only 1% and total sales just north of $2.6 billion. They see total profits of $4.98 per share, which excludes the impact of a stronger dollar that will lower reported results. This puts the forward P/E in very reasonable territory below 11.

SEE: What You Need To Know About Financial Analysts

The Bottom Line
Over the past decade, Tupperware has been able to leverage respectable annual sales growth of less than 9% into annual profit gains of more than 13%. Top-line growth in recent years has slowed a bit further, but management has been able to continue to leverage it into double-digit average annual earnings gains. Cost cutting has been a huge contributor. Selling, general and administrative expenses have fallen steadily to less than 52% of sales. This has boosted annual operating margins into the double digits.

The company now generates excess capital that it uses to benefit shareholders. For starters, it pays a decent dividend yield of 2.6%. It also buys back stock aggressively. During the second quarter, it bought back $25 million in stock and has repurchased more than $700 million worth since 2007. With a current market cap of below $3 billion, this represents a significant portion of the total outstanding shares.

Given the reasonable valuation and strong emerging market trends, Tupperware stock is worthy of investment consideration.

At the time of writing, Ryan C. Fuhrmann was long on shares of Tupperware and Target, but did not own shares in any other company mentioned in this article.

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