* Will account for Venezuela as “hyperinflationary”
* Move not seen changing 2010 earnings forecast
* Shares up 0.3 percent
SAN FRANCISCO, Jan 12 (Reuters) - Tupperware Brands Corp (TUP.N) said on Tuesday that for its current fiscal year it will account for Venezuela as “hyperinflationary,” after the country sharply devalued its bolivar currency, but the company said the move will not hurt its 2010 earnings forecast.
Venezuela’s new system sets a rate of 2.6 to the U.S. dollar for essential items like food and medicine, but gives a much lower rate of 4.3 to the U.S. dollar for other goods. Tupperware said it expects its products will be classified as nonessential.
For its fiscal year that began on Dec. 26, Tupperware said it will use the “parallel” exchange rate available in Venezuela -- last quoted at 6.48 bolivars to the U.S. dollar -- to translate 2010 earnings. That rate is 67 percent worse than the 2.15 official exchange rate it used to translate 2009 earnings.
In 2009, Tupperware said it recorded $8.4 million of pretax costs to convert bolivars generated by its Venezuelan business. That cost will not recur in 2010, but converting the unit’s earnings at the current parallel exchange rate in 2010 will hurt its comparison with 2009 by approximately $8 million.
“As these factors are roughly offsetting, they do not negatively impact the 2010 earnings guidance range provided by the company in October 2009,” Tupperware said in a statement.
At the end of 2009, Tupperware said it had approximately $5 million of net monetary assets in Venezuela, and $60.1 million of sales in Venezuela, stated at the 2.15 bolivars to U.S. dollars exchange rate.
Tupperware shares rose 14 cents, or 0.3 percent, to $45.99 in late morning trade on the New York Stock Exchange. (Reporting by Nicole Maestri; Editing by Tim Dobbyn))