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