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Flowers power 1-800-Flowers’ modest Q4 sales gain

August 29, 2016 04:29 PM
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A solid Mother’s Day helped increase 1-800-Flowers.com Inc.’s sales in the consumer floral segment by 4.6% in the quarter and boost the e-retailer’s e-commerce and total revenue for the period.

E-commerce sales, which include the e-retailer’s online and telephone orders of flowers and food, increased 4.3% in the fiscal fourth quarter ended July 3, to $186.4 million from $178.8 million a year ago. For fiscal 2016, e-commerce sales rose 3.9% to $882.8 million, up from $849.9 million a year ago. 1-800-Flowers is No. 57 in the Internet Retailer 2016 Top 500 Guide.

The Q4 bump in floral sales reflects a focus on original product designs, “a disciplined approach to efficient and effective marketing programs, and our intense focus on always enhancing our customers' experience from shopping to delivery, which helped drive exemplary customer satisfaction metrics,” CEO Chris McCann told analysts on 1-800-Flowers’ earnings call last week, according to a Seeking Alpha transcript.

Floral sales for the fiscal year declined less than 1%, and adjusted for the sale of two small businesses, the company says revenues in this category grew 2.0% for the full year. McCann said the business will build on fourth quarter’s trends and “we are confident that the 1-800 Flowers brand can accelerate its revenue growth, and further expand its market leadership position in fiscal '17.”

The e-retailer’s integration of its multiple brands is having the desired effect, he said. Customers’ purchasing frequency, average spend per year and lifetime value are increasing, McCann told analysts, though he did not give details. The retailer’s multibranded e-commerce platform uses a single home page with multiple tabs for its brands, which include 1-800-Flowers, Harry & David, Fannie May candy, Cheryl’s cookies, The Popcorn Factory and Wolferman’s baked goods.

The retailer says it has exceeded its original estimates for operating synergies tied to its acquisition of Harry & David in 2014. Those savings had been pegged at $20 million over three years and $10 million of that has been captured, said McCann, who on June 30 succeeded his brother as CEO as part of a planned transition. “We have now begun to pursue numerous revenue synergies in cross-brand marketing and merchandizing, through our customer databases and expanded suite of [customer relationship management] tools, and in business gift services and wholesale channels,” he said.

For fiscal Q4 2016 ended July 3, 1-800-Flowers reported:

  • E-commerce sales of $186.4 million, up 4.3% from $178.8 million in Q4 of fiscal 2015.
  • Total sales of $234.4 million, up 2.7% from $228.3 million.
  • Consumer floral sales of $137.5 million, up 4.6% from $131.5 million.
  • Gourmet food and gift baskets sales of $75.4 million, up 1.9% from $74.0 million.
  • BloomNet Wire Service revenue of $21.7 million, down 5.2% from $22.9 million.
  • About 2 million customers placed orders, of which about 924,000, or 46.2%, were new customers.
  • Net loss of $11.1 million compared with a loss of $10.8 million.

For the fiscal year ended July 3, 1-800-Flowers reported:

  • E-commerce sales of $882.8 million, up 3.9% from $849.9 million compared with the same period a year ago.
  • Total sales of $1.173 billion, up 4.5% from $1.122 billion.
  • Consumer floral sales of $418.5 million, a 0.9% decrease from $422.2 million.
  • Gourmet food and gift baskets sales of $670.5 million, up 9.2% from $614.0 million.
  • BloomNet Wire Service revenue of $85.5 million, flat compared with $86.0 million.
  • About 6.8 million customers placed orders, of which about 3.5 million or 51%, were new customers.
  • Net income of $35.9 million, up 85.1% compared with $19.4 million.
 

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