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Blyth Sales Fall But Wholesale, Profit Grows

GDA Staff -- Gifts and Dec, 12/3/2010 3:17:49 PM

Greenwich, CT - Blyth Inc., parent company of major gift and decor vendor Midwest-CBK, reported that net sales for the third quarter ended October 31 declined approximately 3 percent to $215.5 million, from $221.6 million for the prior year period. Midwest-CBK, however, saw dramatic sales growth, which was offset by lower volume in the company's businesses that sell direct to consumer, including PartyLite, catalog and Internet.

In the Wholesale segment, third quarter net sales increased 22 percent to $63.2 million from $51.8 million last year. The double digit growth wsa driven by higher sales of seasonal decor, home decor and premium candles, partially offset by lower foodservice sales. Third quarter operating income in the Wholesale segment increased to $4.7 million from $2.8 million last year. Excluding charges related to Midwest-CBK's consolidation, third quarter operating income would have been $3.6 million last year versus $4.7 million this year.

Operating profit for the third quarter increased to $5.7 million this year versus $3 million last year. (Excluding restructuring charges, third quarter operating profit would have been $3.8 million last year.) The company attributed the improvement to higher sales and lower overhead costs within the Midwest-CBK business, as well as improved operating margins in other segments.

Blyth also revised its outlook for fiscal year 2011. Earnings Per Share are expected to be in the range of $2.80-$3, versus prior guidance of $3.05 to $3.35. Management has attributed the adjustment in its guidance to the impact of the continued, challenging global economic environment on PartyLite's sales and profits, higher commodity costs within the foodservice business and the impact of a product mix shift within Midwest-CBK, partially offset by higher sales and improved margin at ViSalus.

Management also updated its expectations for cash flow from operations to approximately $50 million from previous guidance of $55 million, primarily driven by lower sales. Capital spending is anticipated to be approximately $8 million for fiscal year 2011.

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