Why Shares of Tupperware Brands Corporation Surged

By Seth McNew Markets Fool.com

What happened

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Shares ofTupperware Brands(NYSE: TUP), the classic food-storage brand that has evolved to becomemore than meets the eye, spiked as much as 12% today, after the company reported better-than-expected Q1 earnings and set positive guidance for 2017.

So what

For the first quarter, Tupperware Brands reported sales of nearly $555 million, up 6% year over year, and earnings per share up 8% over Q1 2015 at $0.93.Both revenue and earnings beat analyst expectations, and the company set optimistic guidance for the rest of the year, as Tupperware CEO Rick Goingssaid in the release: "Solid execution of direct selling fundamentals, along with innovative digital strategies across the portfolio, allowed more of our businesses to leverage our strong aspirational brand and provide an earnings opportunity that builds confidence in the 3.2 million women of our global salesforce. With double-digit salesforce size advantages and the wind at our backs in several key businesses, we expect the momentum to continue in 2017 and have raised our sales and earnings per share outlooks accordingly."

Image source: Tupperware Brands.

Now what

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Don't think that Tupperware Brands found this level of success just from plastic food-storage products. The company has been evolving in recent years by investing in acquisitions and product developments within makeup and other consumer-product segments. In addition, the company is still very much using its classic selling strategy of getting individual sellers to host Tupperware parties in their homes to push product, but now that's happening on a much broader global scale. In fact, during the quarter, 66% of sales came from emerging markets, with Brazil, China, Tupperware Mexico, and Tupperware South Africa as notable growth areas.

Tupperware had reported total sales down 3% for full year 2016, so this strong start to 2017 has certainly gotten the market excited. Other than its potential for growing share in emerging markets and across diversified product lines, Tupperware also rewards investors with a very healthy 4.5% dividend yield. Today's earnings were largely positive, and the stock is still cheap at just 16 times earnings -- and that leaves plenty of room to grow form here.

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Seth McNew has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.