Sales: $785 million.
Net income: $54 million.
Key Personnel: Harlan M. Kent, president and chief executive officer; Lisa M. McCarthy, senior vice president, finance and chief financial officer; John Fontana, president, international; Martha S. LaCroix, executive vie president, chief human resources officer; Hope Margala Klein, senior vice president, brand, design and innovation; James A. Perley Jr., executive vice president, chief administrative officer; Arthur F. Rubeck, senior vice president, supply chain.
Major Products: Yankee Candle fragrance brands—Housewarmer, Home Classics, Simply Home and Aroma Therapy Spa which all include an assortment of candles, home fragrance and small space solutions; Yankee Candle needs-based brands—Good Air and Conceal; candle accessories; candle care products.
New Products: Man Candles; Summer Love Collection, Water Inspirations Collection, Citrus Passion Collection, Fall Fragrances including Apple Pumpkin, Seasons Blessings, Treehouse Memories, Whoopie Pie, Caramel Pecan Pie, Harvest Welcome.
Comments: Sales rose about 7% last year, while net income jumped 30%. By segment, retail sales increased 5.4% more than $449 million, wholesale sales increased 1.2% to more than $235 million and international sales jumped more than 35% to more than $101 million.
Retail sales were driven primarily by sales in new stores, as well as increased sales in Yankee’s Consumer Direct division and an increase in sales in the Fundraising division. However, comparable store sales in the 512 Yankee Candle retail stores that have been open for more than one year remained flat, while comparable sales in the Consumer Direct business increased 20.8%. Wholesale sales increased 1.2% due to gains in premium mass and department store channels, partially offset by decreased sales in the domestic gift store channel.
International sales rose on strength in the UK wholesale business and Yankee’s “store within a store” concession channel.
For 2012, Q1 sales rose 7.6% to about $155 million. Retail sales increased 8.3% to $81 million, wholesale sales increased 5.7% to just over $50 million and international sales increased 9.3% to nearly $24 million. During the quarter, Yankee Candle reported a net loss of $3.5 million, but that was down substantially from the $5.3 million in losses reported in Q1 2011.
New Store Openings Provide a Lift in First Quarter
“We saw solid revenue growth in the first quarter in all of our businesses,” said Kent.“Sales in our consumer direct and fundraising businesses were particularly strong year over year, and our wholesale and international businesses had solid growth as well. Our adjusted EBITDA was down slightly to the prior year quarter, but consistent with our internal plans. The year-over-year variance was driven primarily by shifts in the mix of business within our business segments.”
Retail sales gains in the quarter were driven primarily by sales from Yankee Candle retail stores opened after the first quarter of 2011, increased sales in the consumer direct business, and increased sales from the Yankee Candle fundraising division. Total retail comparable sales, including the consumer direct business, increased by 1.8% compared to the prior year first quarter.Comparable store sales in the 509 Yankee Candle retail stores fell 1.2% due to a 6.1% decline in store traffic.
Gains in wholesale were driven by increased sales to the specialty and department store channel coupled with increased sales to various accounts outside the gift and premium mass channels.
International sales were driven primarily by increased sales in Yankee’s retail concession business, increased sales in its European wholesale business outside of the United Kingdom, and increased sales to international distributors primarily in Asia and Latin America, the company said.
A Men’s Market
In an effort to reach guys—many of whom can go their entire lives without making a scented candle purchase—Yankee recently rolled out scents with names like Riding Mower (the scent of freshly cut grass), 2 X 4 (freshly planed wood and sawdust), First Down (a combination of orange, patchouli, vetiver and leather notes) and Man Town (a masculine blend of spices, woods and musk). The collection, available for a limited time, debuted just before Father’s Day and was an instant hit. In fact, Man Town quickly became the No. 1 SKU among Yankee Candle’s 4000 items.
According to Yankee, men make up 35% of the users in the scented candle market.
“We were excited to bring this line of candles specifically positioned for men to market and the level of response has been astounding,” said Kent.“In the first few days we have seen a 167% increase in unique visitors to our website over the comparable year ago time period and new visitors increased 222%. Our Facebook engagement is up 118% and daily total reach up 115% vs. the comparable time period the previous week.”
Mr. Kent goes 'undercover'
• No, he’s not Superman, but when Yankee Candle CEO Harlan Kent went on CBS’ “Undercover Boss,” he learned an awful lot about his company and himself. The television program follows a company president or CEO as he interacts incognito with employees from a variety of departments within the company.
For his part, Kent learned that he has “incredibly passionate employees that care deeply about what they do—they are the very heart of who we are and why folks love Yankee Candle.”
During his time undercover, Kent worked in a variety of positions, including at the company’s flagship storein South Deerfield, MA and other locations across the country.Working side by side with retail employees and experiencing their daily responsibilities allowed Kent to observe the company from a different perspective and connect with employees from the position of a peer. It showcased the passion Kent had hoped to find and highlighted opportunities for the organization.
“I’ve always had such respect and appreciation for our employees and it’s been important to me they feel they are treated well by our organization—that we are looking out for them,” said Kent. “Of course, there’s always room for improvement. While we strive to make even better products and give more value to shoppers, it can only happen thanks to our passionate talent and our focus on developing our employees.”
Kent’s appearance isn’t the first time that a honcho from the household and personal products industry appeared on “Undercover Boss.” The show’s inaugural season featured Dan Brestle of Estée Lauder.