The COVID-19 pandemic has caused a dramatic shift in consumers’ lifestyle and buying habits. One change has been the widespread adoption of home cooking as a daily routine. The ‘new normal’ increase in home cooking has been feeding into people’s motivation to restyle their kitchens and purchase more kitchen appliances and products. This has been bolstering kitchenware sales.
Also contributing to the growth of this industry are fiscal stimulus checks that have driven a substantial rise in consumer spending.
We think a surge in spending on cooking utensils and various cookware products should lead to an increase in demand for products offered by Tupperware Brands Corporation (TUP) and Lifetime Brands, Inc. (LCUT). As such, these companies are well positioned to deliver significant returns.
Tupperware Brands Corporation (TUP)
Founded in 1946, TUP is a consumer products company. It deals in storage and serving solutions for the kitchen and home, as well as a line of cookware, knives, and microwave products. In addition, it deals in beauty and personal care products under the Fuller, NaturCare, Nutrimetics, and Nuvo brands.
In April, TUP expanded its ECO+ with the introduction of two new products made with sustainable material. The new products–Lunch-It Containers and Sandwich Keepers–were coupled with the addition of a new material partner, Tritan Renew from Eastman. These advancements should help TUP increase sales because they respond to consumers’ tastes while addressing environmental factors.
TUP’s net sales grew 22.5% year-over-year to $460.3 million in its first fiscal quarter, ended March 27. TUP’s operating income was t $79.5 million, compared to a $0.7 million operating loss in the first quarter of 2020. Its net income increased at $45.3 million during this period. It reported an $0.85 EPS during this quarter versus a $0.16 loss per share in the prior-year quarter.
Analysts expect TUP’s revenue to increase 41.5% year-over-year to $447.3 million in the current quarter, ending June 2021. Its EPS is expected to increase 35.7% year-over-year to $3.04 in the current year. The stock has gained 545% over the past year.
TUP’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock is rated an A for Value and Quality. Within the A-rated Home Improvement & Goods industry, it is ranked #22 of 64 stocks. To see additional POWR Ratings for Momentum, Sentiment, Stability and Growth for TUP, Click here.
Lifetime Brands, Inc. (LCUT)
LCUT is a global provider of kitchenware, tableware and other products used in the home. It sells products under well-known kitchenware brands, including Farberware, KitchenAid, Sabatier, Amco Houseworks, Chef’n, Chicago Metallic and Copco, and giftware brands that include Mikasa and Pfaltzgraff, and valued home solutions brands that include BUILT NY, and Taylor.
In the first quarter, ended March 31, 2021, LCUT’s net sales increased 34.9% year-over-year to $195.65 million. Its gross margin increased 24.7% year-over-year to $66 million, while its income from operations increased year-over-year to $9.25 million. It reported EPS of $0.14 during the quarter, compared to a $1.36 loss per share in the prior-year quarter.
Analysts expect LCUT’s EPS to increase 66.7% year-over-year in the current quarter, ending June 2021. Its revenue is expected to increase 19.1% year-over-year to $160.63 million in the same quarter. The stock has gained 176.1% over the past year.
It is no surprise that LCUT has an overall A grade, which equates to Strong Buy in our POWR ratings system. It also has an A grade for Value and Sentiment, and a B grade for Growth and Momentum. In the same industry, it is ranked #1.
In total, we rate LCUT on eight different levels. Beyond what we’ve stated above, we have also given LCUT grades for Stability and Quality. Get all the LCUT ratings here.
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TUP shares were unchanged in premarket trading Friday. Year-to-date, TUP has declined -22.94%, versus a 12.89% rise in the benchmark S&P 500 index during the same period.
About the Author: Samiksha Agarwal
Samiksha Agarwal has always had a keen interest in financial markets. This has led her to a career as a financial journalist. Through her extensive knowledge of fundamental analysis, her goal is to help investors identify untapped investment opportunities in the stock market. More...
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