The Yankee Candle Company, Inc. Reports Record Fiscal 2002 Third Quarter Results; Third Quarter Sales Up 17%, Operating Profit Up 21%, Net Income Up 34% and EPS Up 31%

Business Wire, Oct 23, 2002

Business Editors

SOUTH DEERFIELD, Mass.--(BUSINESS WIRE)--Oct. 23, 2002

The Yankee Candle Company, Inc. (the "Company") (NYSE:YCC), the leading designer, manufacturer, wholesaler and retailer of premium scented candles, today announced financial results for the third quarter ended September 28, 2002. Total sales for the third quarter were a record $99.0 million, a 17% increase over the year ago quarter. Wholesale sales were $53.2 million, a 20% increase over the year ago quarter. Retail sales were $45.8 million, a 13% increase over the fiscal 2001 third quarter. Comparable sales in the 168 retail stores that have been open more than one year and mailorder hub decreased 8% and retail comparable store sales decreased 9% in the quarter. Yankee opened 18 new retail stores and entered two new states, Arkansas and Mississippi, during the third quarter, ending the quarter with 236 stores in 42 states.

Net income for the fiscal 2002 third quarter increased 34% to $11.3 million, or $0.21 per common share on a basic and diluted basis, from $8.5 million, or $0.16 per common share on a basic and diluted basis for the prior year quarter.

Operating profit for the fiscal 2002 third quarter increased 21% to $19.7 million, from $16.3 million for the prior year quarter.

"In a very challenging retail environment, our brand power and unique, vertically integrated business model and diversified sales platform delivered record third quarter sales and earnings per share," said Craig W. Rydin, Yankee's President and Chief Executive Officer. "We are particularly proud that we achieved the high end of our $0.20 - $0.21 earnings per share guidance. An important factor in this performance was our continued stance of avoiding deep discounting. While we recognize that the environment is highly promotional as retailers attempt to drive traffic, for our Company the short-term sales gains that aggressive discounting could bring to our retail stores are outweighed by the negative impacts on brand integrity, overall profitability and our wholesale customer partners. We have achieved our results in a manner that positions us very well for the future."

For the first nine months of 2002, sales were $268.5 million, a 21% increase over the first nine months of 2001. Wholesale sales, including European operations, were $139.5 million, a 23% increase over the first nine months of 2001. Retail sales were $129.1 million, an 18% increase over the first nine months of 2001. Comparable store sales in the 168 stores that have been open more than one year and mailorder hub decreased 3% for the first nine months of 2002. Retail comparable store sales decreased 6%.

Net income for the nine months ended September 28, 2002, increased 70% to $24.7 million, or $0.46 per common share on a basic basis and $0.45 per common share on a diluted basis, from $14.6 million, or $0.27 per common share on a basic and diluted basis before restructuring charge for the first nine months of 2001(1).

Operating profit for the first nine months of 2002 increased 36% to $44.1 million, from $32.5 million operating profit before restructuring charge for the prior year period(2).

The Company also updated its sales and EPS guidance for the fourth quarter of fiscal 2002. For the fourth quarter, the Company expects 5% to 11% retail sales growth and 11% to 12% wholesale sales growth. The retail sales growth assumes retail comparable store sales will decline mid to high single digits. EPS guidance for the fourth quarter has been adjusted from a range of $0.74 - $0.75 to a range of $0.70 - $0.74. The Company earned $0.62 per common share for the fourth quarter of fiscal 2001.

The company will host a conference call to be broadcast via the Internet at 11:00 a.m. (EST) this morning to more fully discuss fiscal 2002 third quarter results. Individuals may access the Webcast from: https://cis.premconf.com/sc/scw.dll/usr?cid=vlllrddzsnlvdmrnm. You can also access the Webcast from The Yankee Candle Company, Inc.'s Website at www.yankeecandle.com. Click on the "About Yankee Candle" link, then select the "Investor Relations" link. Enter your registration information, 10 minutes prior to the start of the conference.

The Yankee Candle Company, Inc. is the leading designer, manufacturer, wholesaler and retailer of premium scented candles in the large and growing giftware industry. Yankee has a 32 year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts. The Company sells its candles through a wholesale customer network of approximately 14,000 store locations, its rapidly expanding base of company owned and operated retail stores (236 located in 42 states as of September 28, 2002), direct mail catalogs, its Internet website (www.yankeecandle.com), international distributors and through its distribution center located in Bristol, England.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding The Yankee Candle Company, Inc.'s business which are not historical facts are "forward looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, please read the section entitled "Future Operating Results" in the Company's most recent Form 10-K on file with the Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.