The Yankee Candle Company, Inc. Reports Record Fiscal 2004 Second Quarter Results; Second Quarter Sales Up 9%, Operating Profit Up 18%, Net Income Up 18% and EPS Up 31%

Business Wire, July 28, 2004

SOUTH DEERFIELD, Mass. -- The Yankee Candle Company, Inc. ("Yankee" or the "Company") (NYSE:YCC), the leading designer, manufacturer, wholesaler and retailer of premium scented candles, today announced that financial results for the second quarter ended July 3, 2004 set a new second quarter record. Total sales for the second quarter were $100.9 million, a 9% increase over the year ago quarter. Total company comparable sales for the second quarter increased 3%. Wholesale sales were $52.8 million, a 12% increase over the year ago quarter; and wholesale comparable sales increased 7%. Retail sales were $48.1 million, a 6% increase over the fiscal 2003 second quarter. Comparable sales in the 263 retail stores that have been open more than one year and mailorder hub decreased 4% and retail comparable store sales decreased 3% in the quarter. Excluding the Company's South Deerfield flagship store, retail comparable store sales decreased 1% in the second quarter. Yankee opened 19 new retail stores during the second quarter; and ended the quarter with 319 stores in 42 states.

Operating profit for the fiscal 2004 second quarter increased 18% to $14.9 million, from $12.7 million for the prior year quarter.

Net income for the fiscal 2004 second quarter increased 18% to $8.4 million, or $0.17 per common share on a diluted basis, from $7.2 million, or $0.13 per common share on a diluted basis for the prior year quarter.

Craig W. Rydin, Yankee's Chairman and Chief Executive Officer commented, "Yankee's powerful brand and product platform drove another quarter of strong financial and operating performance, as consumers continued to demonstrate enthusiasm and loyalty for our products, across our distribution channels. We leveraged the 9% total sales growth to increase gross profit dollars and rate by 11% and 111 basis points respectively; and operating profit dollars and rate by 18% and 110 basis points respectively.

The Company provided supplemental information on several financial statement matters.

--Financial results include the operations of the Company's new GBI Division from June 7, 2004, the date of the Company's previously announced acquisition of substantially all of the assets of GBI Marketing, Inc. ("GBI"), through quarter end. Sales were approximately $100,000 and the pre-tax loss was approximately $200,000, both numbers consistent with guidance provided in the June 7, 2004 press release.

--Retail selling expense includes $216,000 associated with the closing of a retail store in Bridgehampton, N.Y. The store closed on July 17, 2004.

--The decline in Stockholders' Equity since the end of the first quarter and since year end 2003 was due to stock repurchase activity, offset in part by net income.

For the first six months of 2004, total sales were $207.4 million, a 9% increase over the first six months of 2003. Total company comparable sales for the first six months of 2004 increased 5%. Wholesale sales were $113.4 million, a 13% increase over the first six months of 2003; and wholesale comparable sales increased 9%. Retail sales were $94.0 million, a 5% increase over the first six months of 2003. Comparable store sales in the 263 stores that have been open more than one year and mailorder hub decreased 4% for the first six months of 2004. Retail comparable store sales decreased 3%.

Operating profit for the first six months of 2004 increased 16% to $33.0 million, from $28.5 million operating profit for the prior year period.

Net income for the six months ended July 3, 2004, increased 17% to $18.9 million, or $0.38 per common share on a diluted basis, from $16.2 million, or $0.30 per common share on a diluted basis for the first six months of 2003.

During the fiscal 2004 second quarter the Company purchased a total of 1,704,000 shares of its Common Stock for an aggregate purchase price of $48.8 million, pursuant to its stock repurchase program announced on February 18, 2004. An additional 806,100 shares were purchased in the fiscal 2004 first quarter for an aggregate purchase price of $22.8 million. Through the end of the fiscal 2004 second quarter, the Company had purchased a cumulative total of 2,510,100 shares of its Common Stock for an aggregate purchase price of $71.6 million.

The Company also updated its sales and EPS guidance for 2004. For the full year the Company expects approximately 11% - 12% total sales growth, including 13% - 15% in the third quarter. For the full year the Company expects 21% - 23% growth in diluted earnings per share, including 19% - 23% in the third quarter. The sales guidance incorporates incremental sales related to the operations of the Company's GBI Division. Yankee acquired substantially all of the assets of GBI on June 7, 2004. The diluted earnings per share guidance incorporates the GBI Division's operations and the net benefit (higher interest expense on revolver borrowings and fewer shares outstanding) of share repurchase activity in the first half of fiscal 2004.

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 2004 second quarter results. This call is being webcast by CCBN and can be accessed at The Yankee Candle Company's web site at www.yankeecandle.com. Click on the "About Us" link, then select the "Investor Information" link. Enter your registration information, 10 minutes prior to the start of the conference.