How Much Does Yankee Candle Make A Year?

Yankee Candle is an iconic American candle brand with a rich history spanning over 50 years. The company was founded in Massachusetts in 1969 by Michael Kittredge, who made his first candle out of melted crayons as a gift for his mother. The homemade candle, with its distinctive spice aroma, sparked demand from neighbors who wanted to buy more. From those humble beginnings, Yankee Candle grew into a major retail and consumer brand.

Today, Yankee Candle offers a wide variety of candle products including jar candles, votive candles, tea lights, wax melts, and reed diffusers in over 500 fragrances. The brand is renowned for its expansive collection of scent options and innovative candle crafting using top-quality waxes. Yankee Candle also operates a large network of retail stores across the United States and internationally, which showcase the full range of their signature candles and home fragrance products. The brand’s iconic white and burgundy branding and classic candle designs have made Yankee Candle a beloved staple of American culture for decades.

Revenue

Yankee Candle is a major manufacturer and retailer of scented candles, home fragrance products and accessories. The company generates over $500 million in annual revenue. Over the past decade, Yankee Candle has seen steady growth in sales. In 2010, total revenue was approximately $785 million. By 2020, annual revenue had grown to over $1 billion. This represents an average annual growth rate of around 3% over that 10-year period.

The company’s sales dipped in 2020 and 2021 due to the COVID-19 pandemic which resulted in temporary store closures. However, the brand remains strong and Yankee Candle continues to be one of the largest candle companies in the world. With over 600 company-owned and partner stores globally, Yankee Candle has built an extensive retail presence and strong branding that has fueled its growth.

Sales by Product Segment

Yankee Candle generates the majority of its revenue from candle sales. Candles account for approximately 60-70% of total sales. The company offers candles in a variety of styles, shapes, sizes, and scents. Popular candle lines include the Housewarmer and Illuminations collections.

Home fragrances like room sprays, essential oil diffusers, and car air fresheners make up around 15-20% of Yankee Candle’s sales. The home fragrance category has seen steady growth as consumers look for alternatives to traditional candles. Yankee Candle has an extensive home fragrance selection with options like reed diffusers, fragrance spheres, and scented wax melts.

The remaining 10-15% of sales come from other home décor products and accessories. This includes candle holders, lamps, mirrors, and other decorative items that complement Yankee Candle’s candles and home fragrances. The company has expanded its product assortment in recent years to provide a one-stop-shop for customers looking to create an immersive, sensory experience in their homes.

Sales by Retail vs Wholesale

Yankee Candle generates revenue through both retail and wholesale channels. At retail, the company sells its products directly to consumers through its network of Yankee Candle stores, as well as online through its ecommerce website. As of 2021, the company operated approximately 505 retail stores throughout North America.

On the wholesale side, Yankee Candle sells its products to other retailers and distributors, who then resell them to consumers. Major retail partners include department stores like Macy’s and Dillard’s, as well as specialty chains like Cracker Barrel. Wholesale sales account for a significant portion of Yankee Candle’s overall revenue.

In recent years, Yankee Candle’s retail sales have faced challenges due to declining foot traffic at shopping malls, where many of its stores are located. However, wholesale sales have remained strong as the company has focused on expanding its distribution reach. Maintaining a balanced omnichannel sales strategy is key for Yankee Candle’s continued success.

Profitability

Yankee Candle has enjoyed strong profit margins over the years, thanks to its powerful brand, economies of scale, and vertically integrated business model. The company operates its own manufacturing facilities and directly controls distribution to retailers, eliminating middlemen. This enables Yankee Candle to capture value across the entire candle production process.

Gross margins generally range from 40-50%, reflecting the premium nature of the brand and pricing power. Operating margins are typically 15-20% of revenue. In 2020, Yankee Candle generated $195 million in operating income on $1.2 billion in sales, for an operating margin of 16%. Net profit margin is around 10%.

The company generates ample free cash flow, with free cash flow margin averaging around 10% of revenue. This stable cash generation enables ongoing investments in new products, stores, marketing, and operations to drive continued growth.

Manufacturing and Distribution

Yankee Candle has manufacturing facilities in Massachusetts and South Carolina that produce its signature candles and home fragrance products. The company operates two main production plants in Whately, Massachusetts and Poplar Branch, South Carolina.

The Whately plant opened in 1969 and is considered the world’s largest candle factory. This 550,000 square foot facility uses a fully automated production process to manufacture its famous jar candles. Raw materials like wax and fragrance oils are combined in large batches, poured into jars, and moved down production lines where jars are topped with wicks.

The 200,000 square foot plant in Poplar Branch, South Carolina opened in 1999 and produces the company’s home fragrance products like room sprays, essential oil diffusers, and reed diffusers. The highly automated plant mixes proprietary fragrances in large vats before bottling and packaging.

Yankee Candle has a network of regional distribution centers in the United States that deliver products to retail stores. The company also ships online orders directly from its manufacturing facilities. For international sales, Yankee Candle stores product in distribution centers in the United Kingdom and France.

Competitive Landscape

Yankee Candle is the undisputed market leader when it comes to scented candles. The brand commands nearly 50% market share in the United States. No other candle maker comes close in terms of brand recognition and sales.

Bath & Body Works and Chesapeake Bay Candle are two of Yankee Candle’s biggest competitors. Bath & Body Works has carved out a niche with their fragrance-focused candles and body care products. The company has over 1,600 retail locations primarily in malls and outlet centers. Chesapeake Bay Candle is a smaller competitor that has gained popularity for their natural soy candles. While growing, their market share pales in comparison to Yankee Candle.

Some other competitors include Village Candles, Colonial Candle, and Malin+Goetz. However, none of these brands have more than a few percentage points of market share. Yankee Candle is the clear dominant player based on their distribution network, manufacturing capabilities, brand equity, and decades as the leader in scented candles.

Recent Performance

The COVID-19 pandemic significantly impacted Yankee Candle’s performance in 2020 and 2021. As non-essential retail stores were forced to close during lockdowns, Yankee Candle’s sales through retail stores declined substantially. However, the company was able to partially offset these declines through increased online sales.

In 2020, Yankee Candle’s total revenue declined by approximately 15% compared to 2019. Retail sales were down by over 30%, while wholesale sales fared better with a decline of just 5%. E-commerce sales were a bright spot, more than doubling from the previous year. Overall the company reported a net loss of around $20 million in 2020.

In 2021, vaccines allowed for the reopening of retail stores and Yankee Candle’s performance began to recover. Total revenue increased by 20% compared to 2020. Retail sales rebounded by 40% as store traffic improved, while wholesale sales were up 10%. E-commerce still saw strong growth of 30% year-over-year, though declined from its 2020 peak. The company returned to profitability in 2021, earning around $15 million in net income.

While the company has not returned to its pre-pandemic sales level yet, the recent performance shows an upward trajectory as Yankee Candle adapts to the new normal. Investments in omnichannel capabilities during COVID-19 also position the company well for the future.

Growth Strategies

Yankee Candle employs various strategies to drive growth and expand its business. Some of its key growth initiatives include:

Expanding its retail footprint – Yankee Candle continues to open new retail stores globally, particularly in high foot traffic locations like malls and lifestyle centers. It leverages its strong brand recognition to draw customers into its immersive, interactive retail settings.

Increasing ecommerce sales – The company is investing heavily in its e-commerce channels, improving its online shopping experience, and using digital marketing to drive online sales. Ecommerce is its fastest growing channel.

International expansion – Yankee Candle sees significant room for growth outside its core U.S. market. It is expanding operations in Europe, Latin America, and Asia Pacific through company-owned retail stores, partnerships, and online sales.

New product innovation – The company regularly debuts new fragrances, candle designs, home decor items, and gift sets to keep its offerings fresh and aligned with consumer trends. This provides new revenue streams and attracts new customers.

Strategic acquisitions – Yankee Candle has acquired several smaller candle and home fragrance brands over the years, like Illume and WoodWick, to complement its products and gain access to new markets.

Future Outlook

Yankee Candle is expected to continue its steady growth and profitability in the years ahead. Here are some key factors that will shape the company’s future performance:

The candle market is projected to keep growing globally, driven by increasing consumer demand for home fragrance products. Yankee Candle is well positioned to capitalize on this market growth with its strong brand reputation and distribution network.

The company is expanding its retail stores in new markets abroad, especially emerging economies like China and India where rising incomes are fueling consumer demand for premium branded products.

E-commerce sales are likely to account for a growing portion of Yankee Candle’s revenues in the future. The company has invested in improving its online shopping experience and digital marketing capabilities.

New product introductions and seasonal offerings will continue to drive interest and sales. Innovative candle designs, home fragrance formats like reed diffusers, and timely holiday-themed products generate excitement amongst Yankee Candle’s loyal customer base.

Despite its dominant market position, Yankee Candle still faces competition from rival brands, private label products, and alternative home fragrance categories. Effective marketing and product differentiation will be key to retaining the company’s leading industry position.

On the whole, Yankee Candle seems primed for sustained growth and profitability based on the enduring popularity of its products and the company’s successful strategies. Continued market share gains both in the U.S. and globally should drive steady revenue and earnings increases for the brand in the 5-10 year outlook.