Tupperware Brands Corporation (NYSE: TUP) crashed about 45% this morning after the kitchen and household products company raised doubt about its “ability to continue as a going concern”.
The multinational reported disappointing results for its fiscal third quarter on Wednesday as well. But investors were more concerned about that warning. The press release reads:
It’s probably that Tupperware won’t be able to maintain compliance with covenant in its Credit Agreement, which raises substantial doubt about the Company’s ability to continue as a going concern.
According to Tupperware, it’s negotiating with lenders but is not sure if it’ll succeed in revising the Credit Agreement.
Versus its year-to-date high, Tupperware stock is now down nearly 80%.
Consolidated net leverage ratio, the Orlando-headquartered company said was 4.17 this quarter, within the debt covenant limit of 4.5. CFO Mariela Matute said:
While we continue to make investments that are essential for our turnaround, we remain focused on meeting our debt covenants, while making decisions that we believe will improve long-term profitability. Given revenue trends YTD, we expect to take additional restructuring actions in Q4 and implementing stringent inventory reduction programmes.
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