Describing itself as a "home expressions" retailer, Blyth (NYSE:BTH) will express its 2007 fourth-quarter financial results tomorrow.

What analysts say:

  • Buy, sell, or waffle? The four analysts covering Blyth aren't exactly enthusiastic about it, with two saying "sell," one rating it a hold, and one giving it the buy nod.
  • Revenues. Their ennui might stem from Blyth's expected 20% decline in revenues, to $380 million.
  • Earnings. The 10% drop in per-share profits to $0.60 isn't much of a housewarming gift, either.

What management says:
The home decor retailer has been trying to spruce itself up by selling off unprofitable businesses and focusing on a core group of products that are sold through multilevel marketing, catalogs, Internet sites, and wholesalers.

Management notes its U.S. "party plan" sales method saw a 12% decline in revenues last quarter, though they rose 14% in Europe. Internet sales rose about 2%, thanks primarily to the acquisition of Boca Java gourmet coffee and teas, while the wholesale segment fell 8% after it sold off a seasonal decorations business earlier in the year.

What management does:
Tchotchkes for the home aren't quite what they used to be. Blyth has taken an axe to different business units to control costs, and it's paid the price in increased costs from severance payments, goodwill write-offs, and other charges. It's expecting further inventory writedowns.

Margin

10/05

01/06

04/06

07/06

10/06

Gross

49.5%

45.4%

45%

44.6%

44.7%

Operating

9%

7.1%

6.7%

6.1%

5.7%

Net

5.6%

1.6%

(1%)

(7%)

(8.6%)
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Too many businesses that rely upon so-called "party plan" sales focus less on actually selling products, and more on increasing their lines of distribution. The hosts and hostesses working for these firms need to generate ever larger lines of subdistributors to succeed. Some businesses have been quite successful with that model; Tupperware (NYSE:TUP) was an early, successful pioneer and still relies primarily on the "party plan" method of selling. But not every business translates so easily, nor has Tupperware's durability.

Although multilevel marketing contributed 45% of Blyth's revenues in 2006, that's down from 50% two years ago. The company has almost completely sold off its entire European wholesale unit, and it's struggling to grow its catalog and Internet business. The housewares and gifts business is facing intense competition. Toy and gift seller Russ Berrie (NYSE:RUS) has had to completely reorganize, while Lenox (NYSE:LNX) has been growing sales exponentially. As such, there's simply nothing joyous in Blyth's current predicament.

Further Foolishness:

Blyth has earned a one-star rating from Motley Fool CAPS, the new investor intelligence community. You can add your voice to the new stock rating service by joining today. It's free!

Tupperware is a Motley Fool Income Investor recommendation. Discover all of James Early's dynamic dividend-paying picks with a free 30-day trial subscription.

Fool contributor Rich Duprey does not own any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.