Tupperware warns it could go out of business within a year

Apr 2, 2024 12:57 am | News

Tupperware, the ubiquitous food storage company (and one-time meme stock), has warned investors it could be out of business within a year.

In a filing with the Securities and Exchange Commission, Tupperware said it could have inadequate liquidity to fund operations.

“The Company has concluded that there is substantial doubt about its ability to continue as a going concern for at least one year from the issuance date of these financial statements,” Tupperware wrote in its 10-Q filing.

This is hardly the first time Tupperware has warned the end might be near. One year ago, it warned that its financial problems might be insurmountable, despite undergoing a turnaround plan. Now, however, it cautioned investors that it could no longer borrow from its credit line and has already entered a debt restructuring agreement. The company’s board said it is “actively engaged” with financial advisers “to explore strategic alternatives”.

In another possible red flag, the company delayed filing its 10-K annual report due to “the identification of multiple prior period misstatements and material weaknesses in internal control over financial reporting”.

Tupperware shares are down 33% year to date and have lost 45% of their value in the past 12 months.

Sales have been declining at Tupperware for years, as competition in the plastic storage container business has increased dramatically, with competitors offering products at substantially lower prices. In 2020, however, Tupperware reported its first year-over-year sales increase since 2017.

The dire financial situation didn’t discourage investors last fall, though. In August, shares soared 800% over two weeks as individual investors dinged short sellers and pumped money into the stock. That rally did not last long, though.

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