Tupperware Brands Corp (TUP) 2011 Q2 法說會逐字稿

Good morning, my name is Dareesa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Tupperware Brands Corporation second quarter 2011 earnings conference call.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I would now like to turn the call over to Rick Goings, Chairman and CEO of Tupperware Brands Corporation. Please go ahead, sir.

Thank you, good morning, everyone. I'm on the line; I'm in Europe. We are on the line with Mike Poteshman, our CFO; and Nikki Decker, our VP of Investor Relations and Strategy.

By the way, we had about ten year ago an issue with one of our European lines; so I would advise if I have a problem on this end, Mike, you just pick it up on this end and finish the call, okay?

As always, everybody, you know some of our discussions are going to involve the future outlook of our business, so you know the drill on this on forward-looking statements. We had another very healthy quarter with a 9% local currency sales increase and adjusted EPS of $1.25.

Before I get into the individual performance of our business units, a word about how we really manage this global portfolio, because it is, I believe, one of our sources of competitive advantage. Because it's a global portfolio, there are many external and internal forces at play, so we've got to manage this dashboard.

And as with all portfolios, you have a share of pluses and minuses, performance wise. I believe as believe as a Company we are getting better each year at both keeping our momentum in our growing markets, and also learning how to fix those markets where there are issues. We are very close, simply stated, to our business units.

Let me highlight how we are organized. Every country has a President or Managing Director. Every region within a country has a Regional Vice President, and every Regional Vice President oversees a certain number of distributors, often 10 to 20 distributors. And typically distributors, depending on the kinds of markets, have 300 to 500 sales force, plus 30 to 50 managers. All these are independent agents.

We manage every single week and measure the key productivity indicators, our KPIs, every Monday morning. I don't care even if it's a US Holiday, we are a global company. Every Monday morning, 52 weeks a year at 10.00 AM East Coast time, there is an Executive Committee call, which lasts about an hour, where we both report on the previous week's actual.

We have a report called the Sunshine Report and then we drill down. There we know as early as Monday of every week what the sales were the previous week by market, by region, by distributorship, what the recruits were like, and this also gives us an idea of what the upcoming party schedule looks like.

Every month also, to add to this, we have a monthly performance review and that monthly performance review lasts about a day and half. Simon Hemus, our President and COO, runs both of these meetings, by the way. But about a third of the time is spent talking through results of the previous months. Two-thirds of the time is spend on forward-looking discussions.

At any rate I share this with you, because many of you ask, how do you keep your hand on the wheel on this? That's the way we do it. That's our methodology. I would also say that one of the things we've learned how to do is bifurcate the kinds of markets we have.

There are two kinds of markets; we had established markets and we had emerging. We use the World Bank definition and it's usually based on per capita GDP. If you haven't read it, I would really recommend for many of you that follow global businesses, read Fareed Zakaria, as the guy who does on the weekends GPS, The Post-American World.

And the reason I would recommend reading that is, not that it slams the US, but it really is the discussion of the rise of the rest. And it's interesting, at the World Economic Forum each year, we do previews into what the world is going to look like in the future. And simply stated, that we have 6.3 billion people in the world now; there will be 9.3 billion people by the year 2040. And those incremental 3 billion people will not be coming to Western Europe or the US.

But having said that, we are not just an emerging market story. The pluses of our established markets are very high per capita incomes, often north of $30,000 per year, so it's interesting in a market like France, our hottest selling product is $140. There is a lot of growth left for us in our established markets of the world, because the high per capita GDP and we have many areas where it's white space for us.

Turning to the emerging markets, though, the big pluses there are obviously population, limited earning opportunities for women, not much of a retail infrastructure and a dynamic growing middle class. So it's the combination of a very good story.

So whereas the hottest selling product in France is $140, the hottest selling product in India is a $4 lifetime guarantee water bottle. Anyway, we differentiate how we manage these markets. And if somebody says, are we an emerging-market-only play, no, it's not an or, it's an and for Tupperware. We do very well in both kinds of markets.

Now, let me turn to local currency performance. Again, I will do my best not to be redundant with what you already know, but drill down in some other areas. I want to start with our emerging markets where overall we grew 15% in the quarter and it represented about 58%. That's kind of the run rate. Last quarter it was 57% of our portfolio for the quarter.

First our emerging markets in Europe. Turkey and South Africa led the pack. Both had double digit increases. They were however, this performance, partially offset by a decline in Russia, which I'll get into in a moment -- results in still though in a 12% increase for the European piece.

Our Tupperware and Beauty businesses in South Africa, by the way, grew 15%. And it is worth commenting that in advance of a nationwide, manufacturing, acROSs-the-board, for-all-industries strike that was in early July, our guys there just did a great job of taking action.

The plant worked like mad to be able to ship Tupperware and stockpile some; and our distributors ordered, so they were able to service their sales force during the strike. Good news is, the strike has now ended. And we are pleased to report that we really had no service disruption to the sales force. Again, we are very proud how our guys there navigated through this difficult situation.

In Turkey, what an impressive quarter, again up 65%. There we are getting increases from both improved productivity and a larger sales force. And we ended June with a 24% advantage in sales force. But when you put that against a 65% increase in sales, that says, wow, to our guys there. Big productivity increases as well.

They are working very hard to get more of our sales from group selling parties, because it makes a better earning opportunity for the sales force. And I might add, Turkey has a population of about 80 million people. We have a lot of runway left to continue to grow there.

In Russia, sales were down in the quarter 11%. I want to adjust though for the impact of some out-of periods last year. The real decrease then was 28%. While it was better than the first quarter on a comp basis, still we weren't happy with that.

We are seeing some early signs of momentum increase there. I was there last month. Our job 1 there is focusing on growing the sales force because we've got a double digit deficit there of 30%. Suffice to say, when somebody asks me, well, what is wrong in Russia, I would put it this way, there is a combination of things that happened.

Firstly, if we really started to see it with the ruble devaluation two years ago, which first depressed consumer spending. Then that was exacerbated by last year's fires and a heat wave. Plus, you know what, we've got to step up and say, we had some of our own missteps in Russia that had tripped up our ten years of double digit growth.

Going forward, we expect to see improvement, perhaps even in the second half of this year. We've got a great Management team there, strong distributors, and I think we are getting our eyes back on what the right strategy is.

Let me go to Asia Pacific next with regard to emerging markets. Sales were there up an impressive 27%. I've got to mention some standouts there. Our business in Indonesian had a strong quarter with a 41% increase in sales. By the way, this was lapping a 39% increase the same period last year.

Indonesia is the fourth largest country in the world, very stable government, and it's now become our largest market in Asia Pacific. A quarter of a billion people in Indonesian and very limited earning opportunities for women and a very primitive retail infrastructure, so this is going to be a story of growth for the next decade or so.

Turning to even a larger market in Asia Pacific, second largest population in the world with more than a billion people in a large market population growth in the world, Tupperware India sales grew an incredible 75% in the quarter; that's on top of 50% for the second quarter last year.

This is another country that has embraced and executed our key strategies. They've just done a great job, particularly of leveraging our mission to enlighten, educate and empower women and girls. Really, they are just doing such an effective job.

Ended June with a 52% bigger sales force than last year, which sets it up nicely for continued growth. Again, if you do the comp between growing 75%, but only 52% in sales force, that says it's not only expanding sales force quantity but productivity quality. And I might say we are very proud. No other direct seller in India is growing faster than we are.

Turning to Malaysia and Singapore. I just returned. I was there this last week. They posted a 24% sales increase in the quarter. By the way we have been in that market 46 years; it is one of the markets of the world where we have a tiered compensation model; and it's working very well.

In the spring, worth mentioning, we convened a meeting there in Kuala Lumpur of leaders of many of our markets to learn the Malaysian-Singapore way of running this kind of sales force structure and compensation model. We always continue to look at how do we refresh it and become even more competitive.

I'm pleased to say that with this business model we are using there, they've doubled the size of that Company in the last four years. It's sending some signals to some other markets. Think of this, we are always trying to work on learning laboratories, and then share best practices.

A number of other Asia Pacific emerging markets also had strong, double digit sales growth. Philippines up double digit. Korea up double digit. China grew 3%, but I must qualify that, this included a 14% increase in the core business, but we didn't have a B to B sale in the second quarter.

By the way, we don't -- B to B sales are very irregular in market, but we let you know when they are occurring and use them as a tool to brand build in markets. But the core business again in India -- or excuse me, in China was up 14%.

We continue to add outlets in China. And as many of you know, the reason we use these little store fronts there is, typically the average apartment isn't big enough for a place to hold group selling, or a Tupperware party. So these are more like local, neighborhood places to meet and hold parties than they are retail shops. We don't make that investment. The sales force makes that investment.

So now we are up to 3,200 which is up 7% from last year. Working very well. It's helping; that signage all over China has helped us. Two years ago we were named a Mega Brand, Super Brand in China and we've never spent a penny advertising.

Turning to our businesses in Mexico. Our Tupperware business was down 2%. As I told you in the last call, we knew the comps would be impacted by a shift in the promotional of timing; that helped our first quarter grow 18%.

It's also a Catholic country and it's all a comparison of where Easter lands in many of these markets. We grew our sales force there versus last year, and we ended the quarter with 10% more sellers.

Turning to our Fuller Business in Mexico, it was a tough quarter for us. We were down 9%. The good news is, we saw it strengthening at the end of the quarter, but not enough to put us in plus territory. And most of it was driven by the size of our sales force where we had a sales force deficit most of the quarter.

We picked it up by the end of the quarter. As a matter of fact, it brought in close to 50,000 new sellers in the last campaign, so we ended the quarter with the sales force equal to last year's number.

Also looking forward, I'm pleased to report, that as of last week, we had a couple of barn burner recruiting weeks and now we have a sales force of 530,000 there. So that is getting close to 5%, 6% plus in our sales force. That was recruiting; the sales force size is the largest we've ever had.

Other good news in our Fuller Business there is, we have a trend setter program where about 5% of our sales force is selling a month ahead, a brochure a month ahead of the rest of the sales force. We really use that to sit there and it helps us on estimating product quantities that we need, and also, do we need to make adjustments to the promotions. But the trend setters are looking very good.

The key things we are working on in Fuller Mexico are really four things. First, grow the sales organization. Two, really a revamping of the top seller program by adding some new incentives, such as international trips. They were weak in those areas.

Third, sales Management team, they've done some reorganization there to really treat these top business leaders in there, give a little bit more independence to them. I feel good about that. Also we are updating the image, the fourth thing we are doing, in our brochures, and streamlining the product line. I think we are back on the right track, although it's very, very difficult.

I was in Mexico last month and I will tell you I met with senior members of not only the government but the US Embassy there. We're up to 41,000 people that have been killed in the last 3 years since the Calderon government has been there. And it's really exacerbated in the areas of, on one side of the country, the Chiapas area, but in the northern border areas, two things have happened.

Not only do you see these narco wars that are going on, but that whole area which after NAFTA became so pROSperous because of the maquiladoras, where basically goods would be shipped to that area. They'd be finished in Mexico where the minimum wage was about $1 an hour.

They have been losing jobs there, and where they have been losing the jobs is to China where the factory wage rate is half that. So it's going to be difficult going there, but we've got a strong Management team and a good business in Mexico and it's very profitable.

Turning to the rest of South America, we grew close to 50% in the quarter, led by strong results in Brazil; and I was in Brazil about 2 weeks ago; and we were up in the quarter in Brazil, 64%. I will tell you, most of our business there is the Tupperware business. Beauty's a crowded space there and particularly in direct sales. And almost 60% of beauty products are sold via direct sales, but we own the space for our product categories.

By the way, Brazil grew 40% second quarter last year. Very strong dynamic Management team. What we are really taking advantage of is the growth of that middle class in Brazil, and it's continuing to happen throughout most of the country. Anyway, we are trying to work on developing higher level managers to manage this incredible growth.

The key leverage points of our business really is that we've got lots of room to grow, very strong Management team, and lots of women looking for an earning opportunity. So I think this is another one of those markets where you can expect to see a decade of growth.

Other markets in the region worth mentioning, Venezuela, Argentina, Uruguay. They all had double digit increases. And even in Venezuela, very strong double digit increases, even when you take out the effect of pricing with the bolivar. We feel it's important to point out that we dig under the inflation levels in these markets, so we think that about 70% of our sales increase in all of these markets is a result of higher volume and that means it's real growth.

Let me turn to our established markets before I turn it over to Mike. We grew 2% in the quarter. France was a standout performer again. This year we will have been in France for 50 years. In France we had a 14% increase in sales. We are using that as a learning laboratory to teach many of our other established markets how there is always some white space to grow in the market.

Germany, therefore, grew in the quarter 4%; closed the quarter with a sales force plus of 6%, which speaks well to the potential for the rest of the year. Germany is executing the same kind of strategies that have worked well for us in France.

Also, one of the first times -- I haven't really talked about it very much -- Italy is one of the largest, direct selling markets in all of Europe, but we've never really tapped it and done as well as we should. It's been flattish for the last ten years. We put in a new Management team in Italy. It was -- really, we saw therefore very strong double digit increase in the quarter. So I feel good about that.

Our midsize market of Greece, by the way, is continuing to be impacted by the external environment; it had a decline in the quarter. Also Austria, a very modest decline. Our Asia Pacific established markets really consist mostly of Japan and the Australian businesses; they were down 2% in the quarter.

I might say though, Japan was up slightly in the quarter. We started telling you several quarters ago about the changes we were making in our business there. We're starting to really see some traction. And even with the impact of the earthquake and tsunami, we are starting to move that business forward.

Business in Australia, New Zealand experienced another difficult quarter. This time it was a 7% decrease. It's an improvement in the trend which had been running down double digit. We are working very quickly there to strengthen our sales force's leadership structure, very similar to what we've done in a number of our other established markets; and we hope to see some improvement in the second half of the year, but we are staying close to it.

I'm pleased to report too, an 8% increase in Tupperware US and Canada in the quarter; and we are really growing the sales force; and the development of new directors is going very well. The sales force growth programs were successful in both of those businesses and the sales force now has a 7% advantage versus last year.

BeautiControl, I was there two weeks ago. Sales declined 11% for the quarter. While we are still not satisfied with our performance there, we did achieve improvement in our trend line as the quarter progressed.

I can tell you, we've just installed Daisy Chin-Lor as our President of our business there. Daisy has worked with me in a prior life in Asia Pacific; she is an American of Chinese descent. We brought her aboard Tupperware some years ago and initially put her in to run our Korean business, and dynamic double digit results.

Daisy has had 20 years of beauty experience with not only Elizabeth Arden, Chanel, but many years in the beauty guide of Avon as well. Anyway, we have installed her there.

We just also did a regression analysis of BeautiControl for the last five years. Let me give you the net-net of what I saw of that. Firstly, yes, the whole beauty is a tough category in the US. We accept that. However, I think we really exacerbated how tough it was with our own missteps, including some Management changes we made in the past and some changes to the product line and packaging.

My mother always used to say, you don't drown if you fall in the water; you drown if you stay there. I think we put the right things in place. I just felt a different tone. Nikki was there with me. I think we are back on the track again.

We are going to be focusing on growing the sales force by creating some major peaks in recruiting. That's what we used to do at BeautiControl, and we got away from that. We are going to match that up with the kinds of product offers at that period of time.

Also we are going to be putting some special incentives in to grow sales force leadership through special kind of training. And thirdly, they got away from international trips. It's interesting, many of our BeautiControl women are A and B socioeconomic levels. And why trips always mattered is, she didn't want to go brag to her friends on how much she makes in BeautiControl.

She would rather brag that she had a new Mustang convertible in there or she just got back from Maui on a trip she won with BeautiControl. And our guys got away from some of those incentives. So I think we're back on track. Anyway, enough from me. Mike, let me turn it over to you, and then we'll open it up to questions.

Thanks, Rick. Turning first to our second quarter results versus our guidance. In April, we said that we were looking for a 5% to 7% sales increase in local currency for the quarter; and we came in with a 9% increase.

The upside was fairly widespread among several of the markets that you've heard us talk about recently, including Brazil, France, India, Indonesia, Turkey, and Venezuela. Our one notable downside is up, outlined already by Rick, Fuller Mexico.

The $1.25 per diluted share, without items, that we made in the quarter also came in well ahead of our $1.13 to $1.18 guidance range. We did better than we thought we would in South America, and there was also some upside in our unallocated Corporate and Interest expense.

We also had a lower-than-expected tax rate that benefited us versus our forecast by about $0.05. Partially offsetting these upsides, we had lower-than-expected profit in our North America segments.

On Interest expense, while we operated under our new credit arrangements for the last month of the quarter, we also had a benefit of close to $1 million from the reversal of an accrual for some interest we thought we would have to pay, but have now concluded we won't.

In light of our second quarter results, we are decreasing our full year, net interest outlook from the $29 million we stated in May to $27 million to $28 million. Related to the upside from a lower-than-expected tax rate this quarter, this will flow through to the year. And our new, full year guidance for our tax rate, excluding items, is 25.1% versus the 26% we said in April and 24.6% for 2010 actual.

Looking at our results for this year's quarter versus last year, in local currency we brought through 30% of our sales increase to profit. This is versus our model to approximate 40% contribution margin from incremental sales before investments and other spending.

The comparison included the $10.4 million benefit from not having last year's Russia out-of-period amounts. Other larger impacts versus the model 40% drops-through included the expected negative $4.3 million impact from higher resin cost and a significant decrease in the return on sales in the Tupperware US and Canada business. This reflected both a lower gROSs margin from higher unit product cost in mix, along with higher selling distribution and administrative costs associated with our promotional programs.

Some of this impact related to the timing of costs versus 2010. There were also some investments and costs in other units related to activities to build and activate our sales force in light of the product offers and take-up of those offers by consumers.

Turning to the balance sheet and our cash flow, our results in the second quarter were pretty good, but we still lagged 2010 on a year-to-date basis. This year in the first half, we generated $28 million of cash flow from Operating activities net of investing activities, which was $40 million below last year.

This largely reflected the timing of distributions for payables and accruals including for income taxes. Some of this has to do with our year-over-year starting point in our fiscal calendar in light of the extra week this year that pushed our second quarter close in 2011, after the end of calendar June. We do expect to see some of this come back as we move to the rest of the year.

Looking at the other key working capital line items, on Trades Receivables we were up versus last June by $33 million of which $21 million was from stronger foreign exchange rates. We closed the quarter in a good place with 27 Days of Current Receivables, which was one day lower than last June.

On inventory, we closed this June with $40 million more than last year. There too, the most significant factor in increase was stronger exchange rates, which in this case accounted for $25 million of the difference.

Then we were at a favorable number of days in comparison with last year, as at 134, we were 9 days lower than last June. As planned we made open market repurchases in the quarter of $90 million worth of shares, although $11 million of the purchases did not settle until July. Through the repurchases, we acquired 1.4 million shares at an average cost of $64.44 per share.

As we said in May, we plan to repurchase in each of the third and fourth quarters of 2011, $90 million worth of shares plus repurchases with proceeds from option exercises. The guidance we gave in April for full year cash flow from Operating activities net of investing activities was $225 million to $235 million.

With the update we are giving today, we need to take into account that we'll have $11 million to $12 million in cash costs in 2011, related to the interest rate swaps that we impaired and charged to expense in the second quarter in connection with our refinancing.

As a result our new full year guidance for cash flow is now $10 million lower at $215 million to $225 million. This outlook includes the same $75 million of CapEx that we gave as guidance in April.

Turning to our sales and profit outlook for the third quarter, we foresee a local currency sales increase in the 7% to 9% range. Given current rates, we would also see an 8% improvement versus last year from stronger foreign currencies that brings the sales increase guidance range to 15% to 17% in dollars.

As many of you know, we use current exchange rates for future periods in determining our guidance. And of course rates have been volatile and likely will be better or worse than when we get to the actual result. The rates we used for the guidance we are giving today were from Monday.

In terms of diluted earnings per share, excluding items, our third quarter outlook range is $0.79 to $0.84, which at the high end includes a 17% increase in local current and including a $0.08 benefit from stronger foreign currencies versus 2010, a 32% increase in dollars. Also at the high end of the range, this would give us pre-tax return on sales of 11.5% versus last year's pre-tax profit return on sales excluding items of 10.4%.

For the full year, we raising our local currency sales increase range by 1 percentage point to up 7% to 9% from up 6% to 8% in April. There was also a 7% benefit from stronger currencies, bringing the increase range in dollars to 14% to 16%.

In local currency, this includes a mid single digit increase in Europe; a low to mid teen percentage increase in Asia Pacific; a mid to high single digit increase in Tupperware North America; a mid single digit decrease in Beauty North America; and a high 30% increase in South America. The segment outlooks are all higher than where we were in April other than Beauty North America which is lower.

We're also raising our full year diluted earnings per share range, excluding items, by $0.05, to $4.50 to $4.60. This reflects improved results in our Asia Pacific and South America segments, our lower income tax rate and the assumption of a lower number of diluted shares outstanding.

There's a partial offset from lower, assumed profit in our Beauty North America segment. At the high end of our range, this would result in a 14% increase in local currency and a 24% increase in dollars, including a $0.32 benefit on the comparison from foreign exchange. The foreign exchange benefit included in our guidance is $0.01 less than what we included in April.

Our segment profit return on sales expectations are to be about even with last year's 18.6% in Europe for the full year, up 1 percentage point plus in Asia Pacific, versus 19.4% in 2010. Even with it up slightly versus last year's 15.9% in Tupperware North America, down close to 3 percentage points in Beauty North America versus 14.9% in 2010, and up by 4 percentage points plus in South America from 13.4% last year.

These return on sales outlooks represent, versus April, a significant improvement in South America, a slight improvement in Asia Pacific and Tupperware North America, a slightly worse outlook for Europe and down more significantly for Beauty North America.

In Beauty North America, as Rick mentioned, we recruited aggressively at Fuller Mexico at the end of the second quarter and will spend heavily in the second half as well on this and on sales force leadership development.

I will note here that in our outlook, we as soon that the exchange rate of Venezuela will remain at the 5.3 bolivar to the dollar we've been using since June 2010. If, as an example, as of the beginning of July, that rate had gone back to the worse level we saw last year, we estimate that would hit our forecast second half pre-tax profit by $7.5 million.

In terms of other elements of our outlook, I've already updated you on our net interest expense outlook going from $29 million in May to $27 million to $28 million now, and that we now see our full year tax rate excluding items coming in at about 25.1% versus the 26% we got at June/April.

On unallocated Corporate expenses, we foresee coming in for the full year at about $58 million, which is $1 million higher than both last year and our April guidance. On resin costs, our outlook in April was that we would have about $160 million flow through cost of sales this year, and that we would be taking an approximate $15 million hit from higher prices versus last year.

Our update is that we now expect to have $170 million go through cost of sales and for higher prices to costs us about $17 million versus last year. The main source of the difference in the impact of higher cost is the need to now buy some resin for Venezuela outside of the country and that carries a higher cost.

As well, it's worth noting that when we gave our overall resin cost guidance in April, we were anticipating the cost would come down going forward; and we more or less think we are on the same track now. This is the reason why putting aside the Venezuela impact on the picture, we don't see a significant change from our previous guidance, even though oil prices have fallen since then.

Putting all of this together then at the high end of our range, excluding items, we have a pre-tax profit return on sales of 14.4% this year, which would be up 70 basis points from the 13.7% last year, although down 30 basis points from the high end of our range in April.

Finally, given our announced share repurchase plans for this year, we foresee having about 62 million diluted shares for the third quarter of 2011, and 62.4 million for the full year. This would be lower than last year by about 3% and 2.5% respectively. The April full year guidance included 63 million shares and indicated a 1.5% decrease versus 2010 actual.

With that, we are going to turn the call over for questions. Dareesa?

(Operator Instructions) Your first question comes from the line of Dara Mohsenian of Morgan Stanley.

Rick, the active sales force was down 2% year-over-year in the quarter despite the very strong organic sales growth. Can you run through what is driving that, and clearly you are expecting the org sales growth to continue in Q3 given your guidance. Are you expecting a re-acceleration in active sellers or just continued strong productivity going forward?

I don't have all those papers in front of me. I'm going to ask Mike to jump in. But I'll tell you, particularly areas like South Africa, where we really don't have a big party business, it distorts a mix shift there. Mike, I would ask you to add to that on other areas of the world.

Dara, I think in some places we do expect to see a pickup in the activity. Rick mentioned Europe. In Beauty North America, we were down in actives in the second even though we had a higher total sales force. That had a lot to do with the lower number, total number, in Fuller Mexico during much of the quarter, which we talked about having fixed by the end of the quarter and had a strong start to the third quarter. So hopefully that would look better in the third quarter and going forward.

In South America, that number, we were down 13 in actives for the quarter versus up 5 in total sellers. That one is heavily impacted by the situation in Argentina where that's a more beauty-focused business, not a party business. So the productivity is much lower and the share of the sellers in that market is high in that segment relatively.

With the great improvement that we've had in Brazil, that includes a larger total sales force and larger active sales force, same thing in Venezuela, those are much more productive in terms of the sales per order.

So while we are having good productivity and good activity in those markets, the overall number for South America is looking lower. And again, that has to do a lot with Argentina. I think that we are hopeful that we can grow, even the total sales force advantage that we had at the end of the second quarter, we would like to be more than 5, and in a market-by-market basis continue to generate a good number of actives.

Okay. Also Mike, it look like the active seller number was actually up year-over-year versus last year's Press Release. So was there a re-class of what qualifies as an active sales force member this year, do you know? Meaning the -- (multiple speakers)

No, I don't -- (multiple speakers)

Year-over-year change you highlighted in this year's Press Release looked like it was lower year-over-year, but we actually had a higher year-over-year if you look at last year's Press Release.

We are going to have to take a look at that. I'm not sure what would be driving that.

Okay. Rick, on Mexico, thanks for all your detail there in the prepared comments. Do you expect to return to growth there going forward given the improvement in sellers by the quarter end and also some of the spending in the back half of the year. And maybe you can just flush out some more detail there on your confidence in the business for the back half of the year. Hello?

We might have lost Rick. But I guess maybe picking up on your question on the confidence going forward. At Fuller we did spend heavily towards the end of the second quarter and saw the success with getting a higher -- or getting our sales force back to even and then continued on to have a positive going into the first part of the third quarter.

We do think that with the team we have there, which has a very strong leadership on the sales side, both at the top and at the top level leaders under him, that we should be able to convert those people into active sellers. So as you saw in our guidance, we are being thoughtful in what we assume for the back half of the year, but we do think with the sales force size advantage that we should be able to capitalize on that.

I'm back on; my line went dead.

Good.

Thanks, guys.

Your next question comes from Per Ostlund of Jefferies.

Thanks, good morning, Rick and Mike. Following maybe just quickly on Dara's question, looking at the outlook, it is, Beauty North America is, sort of the negative delta, if you will. Is BeautiControl basically tracking along where you would have expected at this point, and it really is just the recalibration of expectations of Fuller Mexico driving the reduction?

Firstly with BeautiControl, no, we bought BeautiControl 10 years ago. We tripled the size of the Company, almost tripled the size of it, over the first 5 years; and we've really done a poor job over the last 4 years of mostly internal missteps there. But I think we've got it back on track in BeautiControl. We had a really significant deficit in the size of the sales force.

The Fuller Business, it has been a temporary issue here with regard to recruiting. Since we did that acquisition, that business, almost every year, has grown double digit. We felt some slowing this past year and then this year was, really, we had the impact particularly in recruiting the first half of the year. But I believe we've got these programs back in place.

However, I must say it is a more difficult market in Mexico today than it was five years ago. Mike, would you add to that?

I think you are right on in terms of the question about what impacted the guidance versus April, it is much more Fuller than BeautiControl, so we had a not-the-trend we wanted in BeautiControl for the last several quarters, but that hasn't really changed.

Maybe just sticking with that. I think BeautiControl comes up probably every call. Rick, I think on the last call you might have suggested that you would be disappointed if BeautiControl didn't have up possibly an up quarter in the third or fourth quarter of this year.

Would the trend coming out of second quarter kind of lead you to that same conclusion?

Yes, to the point that I am quite confident because of the person who is not only running the business in my really confident and the decisions that she is making and the things she is focusing on are the right kinds of things. Plus the programs I saw that were launched, I would be very disappointed if the second half of the year doesn't really see sequential improvement in our trends.

Now, I'm not going to get ahead of ourselves and say, oh, you are going to see it be up, but I would be shocked that if you didn't start to see this business get back to recovering our sales force size deficit, which will lead to then trying to get back to even the second half of the year.

I'll tell you, from what I saw in the program, we are just putting the profit plans to early stages of getting into profit planning for 2012. But I would predict BeautiControl will have an up year next year. It may be modest up, but I think we've caught what the issues were.

Excellent. Good to hear. Maybe one more question from me, then I'll turn it over. Brazil just is putting up great numbers on top of great numbers. I think you've alluded to some of the things that are going on there. Maybe the trojan horse mentality leading in where you dominate on the durable side. Is this really combination-of-sales-force driven. And if that's the case, are there other markets -- I think you maybe are doing this in the Philippines as well, but are there other markets where you can do this in that maybe can really jump start growth in other markets as well.

The answer is, firstly with regard to the trojan horse where we have Beauty in the book, then we lead with Tupperware, it does work there. It's the only way you can compete given the size of the two, 800-pound gorillas there. However, I would say too, Beauty is an insignificant mid single digit percentage of our sales in Brazil. The real dominance of sales is our Tupperware business there.

I think why you are seeing this grow is, we are firstly a product, a brand, that people aspire to have. And when you get one of these markets where there is a growing middle class, they tend to, as I think I mentioned at one point, one of my friends, President of Gucci, said the reason they were up 20% in China is that when somebody -- her buying a Gucci purse says to her friends, I'm not poor anymore.

If you look at these lower per capita income countries, a higher percentage of their income is spent on kind of Mazlow's hierarchy of needs, food, clothing and shelter. So we are the penultimate, most respected brand name there. When you are also looking at women who are looking for an earning opportunity, having a great brand and they're looking for these kinds of earning opportunity, that's a great and powerful combination. I think that's what is leading the way there.

Very helpful color, thank you.

That's by the way, what we are seeing in Brazil is the story of when I was alluding to earlier on the Post-American years, again, think of Indonesia, think of women there, less than 20% employment, think of India. It's less than 30% employment for women there and think of China.

Well, China, India, and Indonesia, you put those together and then you throw Brazil on top of it, you are close to 50% of the world's population. That speaks to these incredible double digit numbers that these leaders are posting. What is also interesting about it, in Brazil, in Indonesia, and in India, the Presidents of our Company are also women. It's wonderful role models.

Great. Thank you.

Your next question comes from Olivia Tong of Bank of America.

First, I want to talk about the organic sales outlook for the full year. It's up a point, but it does imply deceleration in the second half despite comps either staying about the same or getting easier, so you have a deceleration in Q3 than in Q4 quarter.

Is there something specific to the second half, were initiatives first half-weighted, or is this just some flexibility and margin for error given the number of markets that you are in and all these moving pieces? Thanks.

I'm going to answer one part of it. Hi Olivia, and Mike if you'll handle the other piece. We have three markets right now -- and again, just like all of you, when you are managing a portfolio, there is different performance levels. I've had one year in my entire business career where everything hit on bright in a portfolio.

But the kind of our problem watch list right now, are BeautiControl Russia, Australia, New Zealand, and to a lesser extent the Fuller Business, because we got the right things in place there.

We are always going to have, it looks like, sausage in some of these markets, pluses and minuses out there. Normally we've had five to seven of our markets around the world at any given point who are having issues. That tends to make comps in certain quarters distorted. That's why is hard to put together. Mike, would you add to that?

Well, Olivia, we were up taking into account the extra week and working through the Russia item. In the first quarter, we said on a run rate we were up 5% or 6% versus the prior year in local currency overall. And then of course, we were up 9% in the second quarter.

The guidance we gave for the third quarter at the high end is 9. And if you back in to it, that would mean 9 also into the fourth quarter. I think that the trend continues pretty well. The place from a segment point of view -- and it ties in with what Rick is saying -- where we are forecast to be down in the second half is in the Beauty North America segment. That's really to the extent there is a drag in the portfolio on a segment basis; that's where it's coming from.

I appreciate the commentary. Second, how are you thinking about promo and how it's evolved over time? You talked about, of course, margin realization in the two North American segments. How long do you think you are going to have to continue this incremental spending and just a little bit more color on that would be great. Thanks a bunch.

I will add one piece to that. First, the most important thing that we can do is retain and grow the sales force. And one of the decisions we made with regard to our US business is, we needed to invest some there. And we said let's take some pressure off trying to target them for their ROS, and say, let's leverage the power of getting a bigger sales force out there, and so heighten some of the promotions.

I'm hoping that we will be through that by 2012, so we can get back to more normalized levels there, and the same expectation, and then back to that 15% ROS is what we target for those kinds of markets.

Olivia, ditto, BeautiControl. The worse thing we could do to a business like BeautiControl right now, where we need to get that sales force excited, motivated, is to pull back expenses to actually what we -- we went in there and we went in there and dropped in some international trips, the mother kind of you do, you get. We call them OMG, Oh My God kind of programs.

What I hope is, you get that sales force top line growing, and then all of a sudden you can cover that right kind of ROS without it being viewed as a pullback, because you can leverage the growth in the scale.

Thank you.

Your next question comes from Mike Swartz of SunTrust.

Hi, good morning, everyone. Just looking at the established markets, they're a pretty impressive 2% in the quarter, and I think that dovetails with your longer term outlook of 1% to 2% growth.

Just what are you looking at for the back half of the year with regards to the established markets? Given where it was this quarter and if you see any kind of improvement in BeautiControl in Australia and some of the other weaker markets, could that be in the mid single digits?

Yes, I think the mid single digits this year is premature but it certainly is the level we are looking at because I would like to see -- all you have to do is again, take a look at our French business, again 50 years there, and when you get the formula right, the business grows.

What we find out there, I've often showed in one on one meetings, if you draw a picture of France, we really had a French business that was a country business there. Where we didn't have much sales was in the high density, metropolitan areas, so you could draw a circle around Paris, Lyon, Bardour, Marseille, Niece, and you'd sit there and say, firstly, this is where all the people live. There is where the bulk of the population.

Young people, she moves away from Provence and wants to move where the jobs are, particularly if she is educated. We were missing all of those consumers there. How we have now approached them is had to -- first of all, she is not the woman that in rural France wants to bake. If she lives in Paris, she can go downstairs, for a euro, she can buy two croissants.

So we had to change, modify the product line for her, modified how she sold. This was the say at home mom, where it would be a day Tupperware party, these tend to be girls night out, and then we had to modify the earning opportunity, because many of the women we were attracting there, she was a Jerry McGuire, show me the money, that we introduced a higher level of earnings there by her not only selling, but she could build a sales force structure.

Forgive the long answer, but once you get that formula right, then you start to see, wait, these markets where we have been, we should expand. One of the most untapped established markets for us in the world is the US business. This US business for a sales force dies, we ought to have a sales force of 300,000 to 350,000 people in the US.

They've got some big goals ahead, but you have to have the formula right before you can go forward with that. I think it's early stages. I'm not giving up on that. I would hope that in this next decade, when we are reporting out of established markets, that you are saying, yes, they are growing 3% to 5%.

What is exciting about them, remember, you take an emerging market of the world, you take an Indonesia where the per capita income will be closer to $3,000 a year, and a European market where it is over $30,000 year, you can still have a very exciting and profitable business even though we have been there for a long time.

The other final thing I would add to that, if you did a hub and spokes, the hub would have been classic food storage. But what we have done now is redefined our product line and now gotten into many different product lines. Ten years ago, a product in France would be a $10 Tupperware product. Now that we've introduced this high-tech micro gourmet steamer, which is $140 US dollars, that's a hot selling product. It goes to a different consumer.

We just had a meeting last December and we will have one this December. We brought in all of our market leaders and the theme of the meeting over 3 days is, know how to grow always. There is always white space in every one of our markets. The market leader there is not supposed to be a weather person reporting on what's happened. They are supposed to be somebody seeding the clouds and figuring out the formula there so we will invest, so that they can always grow in that market.

Do we make mistakes on that? You bet. Look at BeautiControl.

Great. Thanks for the color, Rick. One more real quick, with one month under our belt to the third quarter, are there areas that you are seeing any kind of meaningful pickup or slow down versus second quarter?

Mike, because I've been gone most of the time, but every Monday, you and Simon -- and I'm on that Monday morning meeting. I haven't heard anything where there is a delta. As a matter of fact, when I talk about BeautiControl I said progress, I feel good there.

Russia, I was there this last month, I know what we got planned the second half of the year. I do know also in Russia, we had easier comps, so I checkmarked that. Fuller, just looked at what they've done there and seen these last couple of week results, and looked at trend setters, checkmarked on that.

Japan, they finally scored progress even in the last quarter. Biggest question mark I have if I was picking on a market right now without sitting there talking with Nikki and Mike about it is still Australia/New Zealand. I'm still waiting to see some traction there. Mike, would you add, please?

Of course we reflected everything in our outlook and I think what we talked about with Fuller is probably the biggest difference. First of all, we were seeing in the second quarter with that down sales force that lead to lower actives for most of the quarter versus now a positive sales force size. I think that's the biggest thing to highlight.

Great, thank you.

Your next question comes from the line of Linda Bolton Weiser of Caris.

Hi. I just wanted to continue on with a question about Fuller Mexico. I mean, clearly it's partly a competitive issue. I mean, I expect Avon to be reporting really strong numbers there in Mexico. Can you talk about what they are doing and how you are responding to it and how much a competitive dynamic is what resulted in some of the issues they are having in Fuller Mexico.

One of the things that we see them doing is deep discounting. When I was down there, we laid out not only Avon, but [Outer Bella] and the others down there, some real deep discounting. I can tell you, we are not going to get into that. That is a short-term fix.

Part of the reason right now that they are slipping so, the story over the last ten years of them, if you want to look at one market is Brazil, and Natura is eating their lunch. And the reason they are eating their lunch is, they have become, more than 85% of their products, discounting. When you look into it, as you have a growing middle class, she wants to buy an image. Beauty is an aspirational category.

So she'll go get a Natura, and she wants to be seen with a Natura lipstick, not an Avon lipstick, so you see that gap. They may short-term gain and get some top line growth but it's not a sustainable strategy. Because what happens then is the sales force waits and consumers wait. I was there. They'd say, what's new and what's on sales? And when you have a sales force and consumers that look to that, you have real problems on sustainability in the future.

We know they are throwing advertising money in Mexico. That's not sustainable either. We will see what happens. I don't think that's the big issue with us with our Fuller Business in Mexico. I don't think it's competitive pressures that have been the issues. I think it's more, internally, missteps.

Thanks. Can I ask you about following on the earlier question about your established markets growing pretty good in the quarter. Germany has been trending mostly flattish. I think it was up in the quarter. Is that a sustainable type of growth trend, because that's a pretty big market for you or do you think that is still going to be up and down quarter by quarter?

I hope it's not up and down. What I would hope, Linda, that we can start seeing, low to mid single digit increases. I must say, George Jaggy, who is Swiss/German, who runs our business there, he was the President of France before. He is fluent in French as most Swiss are. So he was, along with our current Managing Director Denis Gruet, were the people that got that French business. George is really a believer in that strategy.

Linda, we have some opportunities for I think some architectural improvements to our sales force in Germany. Let me give you what I mean by that. We have 160, little less than 160, distributors there, but under those distributors, we haven't been as successful as we need to be at building a sub-Management infrastructure of unit managers and this new level called Team Leaders.

And if you look at the overall business as a big circus tent, the more sub managers you have, who does the recruiting is the unit manager and the Team Leader there. Denis is probably three years ahead of George. France is about three years ahead of Germany on building that infrastructure in place. But we have implemented it already.

I will tell you, in Germany, there is no country in the world where we have a more powerful group of regional VPs. These are a group of guys and gals, mid-30s, MBA degrees, five to six years Tupperware experience. I can put them almost anywhere in the world.

Some of them will be Presidents of our markets elsewhere in the world. I see the things in that business that are the things that I think will lead to sustainable growth. But, overall, the macro economic environment in Germany, it's been improving, you've seen because of their exports there, but I don't think it's going be a 10% grower, but I will be happy with that market to be a 4% to 5% top line grower. These are big successful distributors. I think we are on the right track.

Okay. Just can I ask one more about Tupperware North America, the margin performance, the segment margin was really down a lot year-over-year whereas I think it was up in the first quarter year-over-year. What is going on there? Is that an investment that's temporary or is that going to be a heavy investment level in the second half as well?

First of all, it was a decision. This was, we said, put some Oh My God incentives in place. We've got to get that business and these people used to double digit growth is the way we do it in that business. We made that decision, told them to go ahead and do that.

It'll continue the same kind in the second half of the year. While, Mike, I haven't sat through the early, profit planning meetings, I don't see pulling back this next year. What I do see is once you then start to get the top line really starting to grow strong double digit, the fall-through, you start to get the benefit of that and you get your margins back to where you want them again. Mike, would you add to that?

Just to give more color and looking at the second quarter in particular, it was a low quarter, some of that had to do with some hits on the gross margin line that we hadn't planned that we think will come out better as we move forward.

In the DS&A line that's where some of the investment spending really is. That's planned, that was planned, and what we expect to do. There is still some timing related to it through the years. You're right, we were up in the first quarter and of course the segment also includes Tupperware Mexico.

We actually slightly raised our expectation for the ROS versus the April guidance for the full year for the Tupperware North America segment and we said we would be even to up a little bit. We shouldn't see the same kind of a drag in the second half as we did in the second quarter.

Thank you, very helpful.

One thing that we do, this relates to the comment we were talking about in Mexico and discounting, one of the things, we will make the investment by incentives, trips, again, you don't see Estee Lauder. How Estee Lauder does is, gift with purchase, purchase with purchase, those kinds of things.

I never will forget the better brands, Louis Vuitton -- I think I mentioned at one point there was a line going into the Louis Vuitton shop in Copenhagen and went inside and said, is there a sale going on; and he said, sir, we burn it before we put it on sale.

We really try to defend the power of our brands. So when we make the investment, the investment isn't in discounting on it, it's a trip we are running. It is a cash bonus if somebody reaches certain levels. We try not to make these things permanent in the value chain.

With the US business, my instincts are, we will keep running these through 2012, but they will start to improve, because we will be able to leverage greater sales across expense base so you won't see it. But that we wouldn't have pulled back on it.

Thank you.

Next question come from Sofya Tsinis of JPMorgan.

Hi, guys, thanks for taking my question. Taking the mid point of your guidance for 2011, it seems that it implies the outlook for the second half is coming down a little bit about $0.04, and I understand that the resin outlook is slightly worse. You were guiding for slightly higher on allocated expenses.

Is there anything else in the second half that we should be accounting for relative to previous expectations?

We beat the high end of the second quarter guidance by $0.07, as you know, and we raised the full year by $0.05. There are lots of little pieces running through there, like you said, interest is, versus the April guidance, is a little bit higher, as is unallocated.

The tax rate is lower. We have got less shares. That's helping us. The FX is $0.01 worse than we were in April. At the segment level, we are doing better in Asia and South America, versus April guidance, but we are down in the Beauty North America segment. Those are really the pieces.

Okay. Thanks. On Russia, I know you have a double digit deficit now in the sales force. When do you think that you be able to get to where you want to be? Is it going to be by the end of this year or you think it's going to be more of a 2012 event?

I think it's more of a 2012, because I tell you, one of the things back to this thing on architecture, if one of the things we did wrong there --and we benchmarked this to some of our other business, particularly our Brazil business. We expanded to too many distributors too quickly there.

Over a 10 year period, we really grew that business, grew it wonderfully, but it's a large country, and we grew to almost 200 distributors, which meant that some of the outlier distributors were kind of small distributors, and we probably would have been better served having them sub distributors under existing distributors.

What happens is, they have expense base just for breakeven. Then all of a sudden, you get the combination of the externals, the ruble devaluation, the absolute heat wave that hit the whole country, the six weeks that Moscow was closed last summer because of fires.

You have those things then happen to a marginal sized distributer, all of a sudden, you are left with an architectural problem, that, oh, oh, it's like having dealerships that are below their breakeven. We've learned from that. By the way we learned from that, and so you don't see us in markets like -- we apply what we've learned.

As we are looking at Brazil, how we do it there, as we do it in Indonesian, India, et cetera, we say we want to learn these learning laboratories and it's okay to make a mistake, just don't keep making the same one. I think that was a problem of our own making in Russia.

We got a plan in place, and we are executing the plan. We've got a great President of our business there and they are implementing that plan. I do think it's a, because the market is so expansive, I think it's a 2012.

Thanks.

Next question is from Jason Gere of RBC Capital Markets.

Just wanted to talk a little bit about the pricing. Obviously pricing is part of an annual process, but when you talk about South America, and I think you said that pricing was about one-third of the organic sales you saw in the region. I was just wondering how that compared to expectations if you could talk about price elasticity and then maybe talk about, is there additional pricing that you are taking whether through innovation, in the back half of the year as well?

We generally -- every country has its own marketing department and they do their own profit plans and that is built into their plan at the beginning of the year. Pricing generally happens once a year and it usually is driven by great sensitivity to what the inflation is in a particular market.

We have elasticity because of raw material prices that when you're operating at 60%, or high 60s gross margin, to pass on raw material prices, but it isn't something that you sit there and we do monthly in a market. It generally happens once a year in markets.

Now you have markets that are hyper inflationary. We've only really got one in the world, and that's Venezuela, and Mike has already gone through. The impact there to us is the resin. We can't source inside Venezuela so we have to use real dollars, hard dollars, to bring it into a market where it's hard even to get our dollars back out of it.

By the way the great sensitivity on pricing is, we want to keep up with pricing because you ruin the sales force opportunity, dilute it, if you don't keep up with that pricing. Very interesting how it plays out in product line. Hottest does selling product in France is $140. Hottest selling product in India is $4. It's a water bottle. Mike, if you would add on to that if you would like.

I think that that's right.

Thank you.

Your next question comes from the Leigh Ferst of Wellington Shields.

Good morning. I was wondering if you could give us some more examples of the products that are really moving because you mentioned the India water bottles for $4 a couple of times, and the France food steamer $140, three times.

Can you give us some other examples so we have a little color or flavor behind these really strong numbers that you put on the table?

Yes. Think back again on this hub and spokes. Food storage is a clearly one of our key categories out there. But it plays out differently in a market that -- but let me give you this, but then we've gone into -- for example, even though the Greek market is having a difficult time, cookware has become as much as 25% of our business in our Greek business there.

It's a very substantial piece of our Japanese business and these are $300 really TupperChef gourmet items. That has become really important to us. The hottest selling, we've gotten in to a whole category of products that are time saver but food preparation products. We have a product called Quick Chef, sells for between $60 and $70.

What is interesting, it will do the same thing as one of these electric food processors; however it's inexpensive and it's easy to use. And bright young working women, she may not want to cook, but she likes simple, quick things to prepare with. She likes to entertain.

That has become a hot selling product in markets like France and in markets like Germany as well. As a matter of fact, during the depth of the economic downturn in 2009, we used -- they came up with a party in Germany very much like the same as in the US, people throw away about 25% of their leftovers. We came up with a leftover party that using our Quick Chef, that what she would do is you put together this and this and this and this, a little of this.

You put it altogether through our food processor and it was great for omelets, great for casseroles, et cetera; and we came out with a whole leftover book and so it matched what was going on in the market as well. One of the hottest selling new products all over the world, Nikki, what do we call it? You pull it like a --

Herb chopper.

Herb chopper. It's $60. It has been hot everywhere around the world. We are doing a great job with a Fridge Smart, which is a -- Americans and Europeans alike throw away about 30% of their fruits and vegetables. We have come up with a technique that can as much as double the shelf life of fruits and vegetables. It's a different way of storing them.

They never sit in their own condensation and we caused a new airflow there, so whatever the ambient environment is -- think if you're up in an airplane, you are at 40,000 feet, they create a false environment in there, but it enables us to be in those kinds of -- we've done the same thing to prolong the life to really retard the decay process. It's multiple different kinds of categories. It depends on which market you go to, what is the hottest selling thing there. That is usually driven by culture.

Your next question comes from Gregg Hillman of First Wilshire.

Good morning. Just real quick, Rick. Tupperware University in India, what is the class size there or what kind of people are getting there, is there one there?

Those aren't always in a fixed location. We'll use office buildings, hotels, et cetera. Depends on at any given time what the class size is. I mean I just reviewed the one we did. Indonesia is made up of many islands. The island that we used to when we were raised, it was called Borneo; it's now called Kalimantan.

I just saw their recent class there with 35 students. They have to go for 13 weeks. It's all day on Thursdays. Sometimes these women -- again this is Borneo, she will travel overnight sometimes on a bus to be there for that and it goes from 8.00 in morning until 4.00 in the afternoon every Thursday.

At graduation, the family's invited in. They have white gowns, Mortar Boards, the whole thing. These women have never had that kind of opportunity. It's the same kind of thing in India. By the way, who piloted this first was our Russian business where we first opened the first Tupperware University.

We teach her starting with basic skills. But toward the end, she starts to learn how to manage and guide other people, public speaking, she learns managing her money. And these are in market -- that's why when we were -- we just had 6,000 people in Beijing and one of the senior government officials, an ambassador who's been an old friend of mine there, he just says, it is just amazing how you, this Company, is training our women to become business people and entrepreneurs.

It's why we have such good relations with all of these governments out there. It really has been affective.

Rick, how long do you think it will take India to eclipse Indonesia in terms of sales?

Really interesting question. You have just north of 200 million people in Indonesian and more than a billion in India. I will give you, I'm thinking of this out loud. It was about four years ago where we got to the run rate of Indonesia doubled. And now what they've done is they keep growing it 40% to 50% per year.

Well, starting now, at those kinds of levels last year in India, so I would think we are probably two years away from that. Incredible Management team that we have in place in each of those markets. By the way, final thing, Gregg on the Tupperware University, we've done that in our Tupperware business in Mexico because so many of the women, particularly the C and D socioeconomic girls, have never had that kind of opportunity. But we just launched that over the last 90 days in our Fuller Business there.

And Fuller has never had a Fuller University program and I saw the reaction to the sales force there. They are very excited about that.

Yes. Mike, a couple of quarters ago you brought down the revenue guidance for, the long-term revenue guidance, for emerging markets down to the low teens. I was just wondering whether -- I think you cited market saturation even at the time. I was wondering given the fact that particularly India and China are not anywhere near capacity, you don't think that you could exceed, at least for the next three to four years, you could exceed your long-term guidance for the emerging markets.

Yes, I mean obviously we will see how it goes, we were up 15 this quarter, and I think 16 last year, or something like that, and 15 for all of last year. So clearly we have been running above the low double digit that had we mentioned. That's even with not getting exactly what we wanted out of Fuller Mexico in the most recent quarters.

We will see how we can do. Certainly we do have a lot of white space in many of those markets. Mexico, between Tupperware and Fuller, with those large businesses, is the one we are closer to penetration than most of the others. So you are right, there is opportunity there, we will see how it goes.

Okay. Thanks, Mike.

There are no further questions at this time. I would like to turn the call back to Mr. Rick Goings for closing remarks.

Thank you very much. Thanks everybody for your time. I'll say one thing I would reiterate again is, just like you all who have portfolios, what we try do is mitigate the negatives. And we are doing business in almost 100 markets out there, and I guess we've got the lowest amount of markets we ever had on our watch list here. And as we were just chatting with our Board, I think we will see improvements in these but we will have some new ones too, because this business is somewhere between an art and a science, but I think we are getting much better at really understanding these formulas, and understanding the signals in markets early on of what could be leading to problems in the future.

One thing I have noticed too, every time I travel with analysts that spend a lot of time on us, they help us also understand our business even better through some of the questions and your interest is really appreciated. Thank you very much.

Thank you. This concludes today's conference call, you may now disconnect.