The Complaint brings forth claims for violations of the Securities Exchange Act of 1934 against Tupperware Brands Corporation (“Tupperware,” or the “Company”), and certain of its senior executives. The Complaint alleges that Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects on behalf of all persons or entities that purchased or otherwise acquired Tupperware publicly traded stock during the Class Period.
Tupperware, incorporated in Delaware with its principal executive offices in Orlando, Florida, operates as a direct-to-consumers marketer of various products across a range of brands and categories. Tupperware’s Fuller Mexico (“Fuller”) reporting unit manufacturers and sells cosmetics and related household items.
Specifically the Complaint alleges that Fuller engaged in a scheme to falsify revenue and net income by knowingly recording fake sales, and shipping product. Over the course of the Class Period, up to 60% of Fuller’s sales were falsified. Engaging in this scheme allowed Tupperware to record Fuller’s sales growth in 2018 without reporting the necessary impairments. On October 30, 2019, before the market opened, Tupperware finally made disclosures regarding impairments in Fuller’s goodwill, resulting in a $0.36 decrease in GAAP earnings per share (“EPS”). Also, the Company “increased reserves for accounts receivable and inventory in its Fuller beauty business as a result of lower collections and higher sales returns” to further adversely impact Tupperware’s adjusted EPS by $0.13 per share. On October 30, 2019, this news caused investors to bid down the price of Tupperware common stock by $5.38 per share, or 35%, to close at $10.16 per share. Then on February 24, 2020, while announcing preliminary financial results for 2019, which included a 13% decrease in sales in 2019 over 2018, Defendants disclosed that they had impaired virtually all the remaining intangible assets of Fuller’s reporting unit, requiring another charge to income totaling $40 million for 2019. Tupperware also disclosed an “investigation” into Fuller’s accounts payable and accrued liabilities. In response, investors bid down the market price of Tupperware common stock by over 45%, to close at $3.11 per share on February 25, 2020, damaging shareholders.
On June 16, 2020, Srikalahasti M. Vagvala was appointed Lead Plaintiff and Saxena White P.A. was appointed local counsel. The deadline for Defendants to answer the complaint or move to dismiss is September 14, 2020.