Yankee Candle Considers Sale

"We are confident in our business strategy and optimistic about our future financial performance," Craig Rydin, Yankee's chairman and chief executive officer, said following the announcement. "We and our board of directors also believe that we owe it to our shareholders to explore whether there are strategic alternatives available to us that would optimize shareholder value."

News of the firm's possible sale comes as the Deerfield, MA candle maker is set to close on the $22 million acquisition of Illuminations, a Petaluma, CA-based brand of scented candles. That acquisition, which is scheduled to close Aug. 1, will give Yankee Candle 15 Illuminations retail stores and its consumer direct business Yankee Candle will operate Illuminations as a separate brand and expand its presence, Rydin said. Yankee Candle currently operates 385 stores in the United States and sells its candles at more than 17,000 other locations in North America.

The company also said poor performance in its wholesale business and increased cost for wax and other items helped contribute to a 43% drop in earnings during the second quarter. Net income for the period was $4.8 million, or 12 cents per share, compared to the same quarter a year earlier when the company reported net income of $8.5 million, or 19 cents per share. Revenue for the quarter was up 7% to $116.3 million from $108.5 million for the same period last year while retail sales increased 18% to $59.1 million and sales at stores open at least a year were up 8%. Wholesale sales, however, dropped 3% to $57.2 million compared with the year ago quarter.

Sales for the third quarter are expected to rise from 7% to 9%, the company said, with yearly sales projected to increase between 8% and 10%.Yankee Candle also projected earnings of between 28 cents and 30 cents per share for the third quarter with full year earnings expected to be between $1.93 to $2.03 per share.