Yankee Candle Posts Strong Results

The Yankee Candle Company, Inc., South Deerfield, MA, reported record sales, operating profit, net income and EPS for the fourth quarter and full year. Total sales for the fourth quarter were $157.3 million, an 11% increase over the year ago quarter. Wholesale sales including European operations were $55.2 million, a 3% increase over the year ago quarter. Retail sales were $102.2 million, a 16% increase over the fiscal 2000 fourth quarter. Comparable sales in the 147 retail stores that have been open more than one year and mailorder hub decreased 3% and retail comparable store sales decreased 5% in the fourth quarter. Yankee opened 10 new retail stores during the fourth quarter and ended the quarter with 192 stores in 39 states.

Net income increased 21% for the fiscal 2001 fourth quarter to $33.6 million. Operating profit increased 14% for the fiscal 2001 fourth quarter to $57.4 million.

We are pleased to report our fourth quarter operating and financial results. The fourth quarter of 2001 has generally been characterized as the most challenging and promotional retail environment in recent memory. In this environment we were able to establish new records for retail sales, wholesale sales, operating profit, net income and earnings per share, said Craig Rydin, Yankee’s chief executive officer. While many companies escalated the breadth and depth of promotional activity as the quarter progressed; we operated in a more restrained manner, with appropriate consideration for current and longer term financial, brand and business impact. We thoughtfully evaluated the sales, margin and expense implications of incremental discounting; and decided against implementing additional programs to stimulate sales at the risk of significant margin erosion. We also made meaningful progress in strengthening our balance sheet. Since the end of the third quarter we paid down $61.5 million of debt, increased cash by $22.8 million and reduced inventory by $20.5 million.

Total sales for fiscal 2001 were $379.8 million, a 12% increase over fiscal 2000. Wholesale sales, including European operations, were $168.1 million, a 3% increase over fiscal 2000. Retail sales were $211.7 million, a 21% increase over fiscal 2000. Comparable store sales in the 147 stores that have been open more than one year and mailorder hub increased 2% for fiscal 2001. Retail comparable store sales decreased 2%.

For fiscal 2001, net income before restructuring charge was $48.2 million. After the one-time restructuring charge, the company reported net income of $43.3 million.