The company founded by fallen American domestic goddess Ms Martha Stewart has posted sharply lower quarterly profits, and said it would remain under pressure until the Ms Stewart's legal problems had been resolved.
Martha Stewart Living Omnimedia reported lower second-quarter publishing and merchandising results, the lifeblood of its operations, as selling, promotion, general and administrative costs increased.
Ms Stewart herself, who stepped down as chairman and chief executive of the company in June amid an insider-trading scandal, is to go on trial in January on charges of obstructing justice.
"We believe that the Martha Stewart Living core brand will continue to be under pressure until resolution of Martha Stewart's personal legal situation," Martha Stewart Living Omnimedia said in a statement.
The company reported second-quarter net income of $931,000 compared with $6.7 million a year earlier.
Operating income was $1.5 million, down from $13.1 million a year earlier. Revenue fell to $65.8 million from $78.6 million.
Publishing revenue dropped 16.3 per cent in the second quarter to $39.62 million, reflecting lower advertising and circulation revenue in its flagship Martha Stewart Livingmagazine. During the quarter the company launched a new title, Everyday Food.
Revenue at its merchandising unit plunged 26.4 per cent to $11.8 million, hurt by the closure of some Kmart stores and the elimination of some garden products, the company said.
A recent poll of 1,000 consumers by America's Research Group showed that Ms Stewart's customers were losing some of their appetite for her home decorating products as her trial draws nearer and her image comes under greater scrutiny.
But last week, Kmart Holding , a key distribution partner for Martha Stewart-branded products ranging from bed sheets to garden pots, said sales of her products had not suffered badly, even after she was indicted.
About a year ago, Stewart found herself in the centre of a media frenzy after it was disclosed that she had sold shares in biotechnology firm ImClone Systems just before the company reported some bad news that sent its stock tumbling.
Martha Stewart Living Omnimedia shares have fallen 19 percent this year. They closed at $7.98 on Friday on the New York Stock Exchange.