Home decoration retailer Blyth (NYSE:BTH) will report first-quarter 2008 financial results on Thursday, May 31.

What analysts say:

  • Buy, sell, or waffle? Sentiment has soured on the "home expressions" company, with three of the four analysts covering it rating it a sell. One analyst is trying to be the life of the party by rating it a buy.
  • Revenue. With sales expected to drop more than 8.5% in the quarter, to $299.6 million, it's hard to generate any enthusiasm for the company.
  • Earnings. Maybe it's the 75% expected increase in profits to $0.21 per share that has got that lone analyst dancing in the streets.

What management says:
If Blyth were a European company, it would be doing swimmingly. Its European direct selling segment saw double-digit growth last quarter, even as it got rid of its European wholesale business. Sticking to its "party plan" strategy -- holding parties in homes to sell home decorations -- is proving to be successful overseas.

Unfortunately, Blyth generates approximately 73% of its sales from the U.S., where it recorded more declining sales yet again last quarter. And considering party plan sales account for 57% of total revenues, Blyth will need to do more to stop the hemorrhaging.

What management does:
By no longer writing off huge swaths of goodwill last quarter, the company was able to improve its profitability in comparison to the year before, allowing investors to view a truer picture of the company's balance sheet. In addition to its U.S. direct selling business, its candle business also melted away a better chance for profits, although its catalog sales showed improvement. Blyth seems to be burning at many ends.

Margin

01/06

04/06

07/06

10/06

01/07

Gross

50.8%

45.0%

44.6%

44.7%

50.7%

Operating

7.9%

6.7%

6.1%

5.7%

7.2%

Net

2.0%

(1.0%)

(7.0%)

(8.6%)

(8.5%)
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:
The tchotchke business is facing difficult times, though Lenox (NYSE:LNX) has bucked the trend. Add in a gifts industry that has seen Russ Berrie (NYSE:RUS) undergo a restructuring, along with Lancaster Colony (NASDAQ:LANC) facing tough comparisons, and you have a business that's already precariously balanced. Multi-level marketing businesses do not have a solid reputation, though Tupperware (NYSE:TUP) might be an exception.

Realignments, divestitures, and a myriad of other internal corporate maneuvers have Blyth distracted. While at one time it was thought to be a possible Rule Maker candidate, it's now struggling just to add the fragile glass figurine of profitability to the menagerie.

Related 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!

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. Tupperware is an Income Investor pick. The Motley Fool has a disclosure policy.