Have I been wrong about Blyth (NYSE:BTH), the home decorations outfitter? For the past twoquarters I've been pretty sour on its business outlook, but the tchotchke seller turned in another profitable quarter with non-GAAP operating earnings rising 70% over last year. Is this a business to watch more closely?

I don't think so. It's true that operating profits have more than stabilized. Its new direct-to-consumer Internet and catalog offerings are proving successful; in particular, its Boca Java gourmet coffee and European "party plan" sales continue to show robust growth. They were up 17% for the quarter (8% if you subtract out favorable currency exchange rates) on top of a 14% increase last quarter. Even Canada saw a 10% increase in its party plan sales.

However, the U.S. represents more than two-thirds of Blyth's revenues, primarily from party plan sales, and they have been falling steadily quarter after quarter. So much so, in fact, that just last quarter U.S. revenues represented 73%. U.S. sales are falling, and the sales decline is accelerating. Revenues dropped 14% this quarter and were off 12% last quarter.

Overall sales also continued to decline, dropping 3% to $270.4 million. While management says it was pleased with its results this quarter, perhaps it's planning on becoming a Euro-centric operator. On that basis, things are going swimmingly.

It can't be denied that the home decorations market has been having a rough go of it. A few of its competitors selling into various aspects of the industry -- Russ Berrie (NYSE:RUS), Lancaster Colony (NASDAQ:LANC) -- have been having troubles lately, too. Yet not everyone is experiencing difficulties, which casts Blyth's condition in a dimmer light for me.

Lenox (NYSE:LNX) and Newell Rubbermaid (NYSE:NWL), for example, have found the home decor segment rewarding, reporting healthy sales increases of 10% or more.

Now that Blyth has slimmed down its line of businesses -- it also got rid of a candle business -- we might be able to make better comparisons about the company's operations. We know that the European division has been doing well with the party plan operation and is finding new traction with its direct-to-consumer business. Still, what it needs to do to convince me is to stem the hemorrhaging of sales in the U.S. line.

Whatever goodwill Tupperware (NYSE:TUP) had generated for the method has now evaporated. Whether or not that's because multi-level marketing has gotten a bad rap here at home (often deservedly so), Blyth will need to show that it can cauterize the bleeding, while continuing to grow its international operations.

But I won't be blithely putting my money into Blyth until it can demonstrate that.

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