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Europe Hits Tupperware

Results are mixed.
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Tupperware (TUP) missed its first-quarter earnings target and guided lower for the second quarter, though the housewares company stood by its guidance for the full year.

For the quarter ended April 1, Tupperware made $16 million, or 26 cents a share, down from the year-ago $24 million, or 40 cents a share. Excluding certain costs, latest-quarter earnings were 36 cents a share, a penny shy of the Thomson Financial forecast. Sales rose 30% from a year ago to $424 million but missed the $428 million Thomson target.

"We were pleased to finish the quarter in line with our expectations after adjustments, with positive profit comparisons in all segments, except Europe," said CEO Rick Goings. "The quarter included sales growth in our beauty brand segments, which contributed 39% of total sales this quarter."

In Europe, sales decreased 11% as reported and 4% in local currency in spite of a higher active sales-force count. This decline was primarily due to a shift in promotional program sales in Germany and over $4 million less business-to- business sales. The key emerging markets in the segment -- Russia, Turkey and Poland -- performed well, with a 34% increase in local currency sales.

In North America, sales were down 12% due to a decline in the average active sales-force size. The year-over-year decline in active sellers in the first quarter at 14% improved compared with the fourth-quarter 2005 decline of 28%.

For the second quarter, the company expects to make 50 cents a share on a pro forma basis, excluding certain costs, on revenue of $445 million to $450 million. Analysts were looking for 53 cents on $463 million.

For the year, Tupperware expects to make a pro forma $1.77 a share on sales of $1.78 billion, in line with estimates.