12.13.05
Blyth, Inc. reported the companys net sales for the third quarter ended October 31, 2005 increased approximately 1% to $444.5 million compared with $439.4 million a year earlier. Operating profit for the quarter declined to $33.7 million compared to $51.1 million for the prior year period; Net earnings for the quarter were $23.0 million versus $30.2 million a year earlier; and diluted net earnings per share for the quarter were $0.56 per share compared to $0.73 for the same period last year.
The designer and marketer of home fragrance and home decor products, reported net sales of $1,092.4 million for the nine months ended October 31, 2005, almost even with the $1,087.5 million reported for the same period a year ago. Operating profit for the nine months was $62.8 million compared to $104.3 million for the same period last year; net earnings were $37.2 million compared to $57.4 million for the prior year period; and net earnings per share were $0.90 versus $1.29 for last year's first nine months.
Third quarter net sales increased approximately 1% due to the acquisition of Edelman and Euro-Dcor in September 2004.
Third quarter net sales declined 1%, in the direct selling segment, from $156.1 million to $154.7 million for the same period last year. PartyLite's U.S. sales declined 7% versus last year's third quarter, which was significantly less than declines seen during the first half of the fiscal year. Sales of PartyLite's holiday product line increased significantly over last year's third quarter. In PartyLite's Canadian market, sales increased 25% on the strength of the holiday product line. In Europe, PartyLite's sales increased 4% during the quarter, as a result of strong holiday product line sales in most markets. Third quarter operating profits in the direct selling segment was $12.2 million versus $19.3 million in the same period last year. It was negatively impacted by lower volume in the U.S. market than the prior year, increased freight surcharges, as well as the timing of expenses related to PartyLite's North American and European National Sales Conferences this quarter versus the prior year.
In Blyth's other direct to consumer business, the Catalog & Internet segment, third quarter net sales decreased 4% to $51.7 million, due to weak demand in all four of the major catalogs. This segment experienced an even operating profit versus $3.4 million in last year's third quarter, which was below management's expectation. Soft consumer demand and a $1.2 million write down of a Colorado Springs facility, currently held for sale, were the main reasons for lower than expected operating profit.
In the Wholesale segment, third quarter net sales increased approximately 4% to $238.2 million, mainly due to the acquisitions of Edelman and Euro-Decor. These acquisitions represented 11 percentage points of sales growth during the third quarter. Higher sales of North American premium and mass channel home fragrance products were more than offset by sales shortfalls in this segment's other product lines and markets. Third quarter operating profit in the Wholesale segment was $21.5 million compared to last year's third quarter operating profit of $28.4 million and was significantly impacted by higher commodity costs and fuel surcharges, as well as lower sales among the existing Wholesale businesses.
The sum of the segment amounts does not necessarily equal that reported for the quarter for Blyth overall due to rounding.