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Gift baskets deliver a lift for 1-800-Flowers.com in Q1

November 7, 2016 01:27 PM
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Double-digit growth in wholesale orders of gift baskets helped 1-800-Flowers.com Inc. increase total sales by more than 6% and e-commerce sales by 2.3% in the fiscal first quarter of 2017.

Sales in the gourmet food and gift baskets segment, which includes the Harry & David brand, increased 13.3% to $69.8 million in fiscal Q1 ended Oct. 2, driven largely by a double-digit sales gain in wholesale orders of gift baskets, CEO Chris McCann told analysts on the quarterly earnings call, according to a SeekingAlpha transcript.

“In our Harry & David business we saw an increase in wholesale orders, reflecting some early success in introducing Harry & David products and its Moose Munch and Wolferman's brands to a growing list of customers in this channel,” McCann said last week during the e-retailer’s earnings call. “Our floral business segments also continued to see positive trends during the quarter. The 1-800-Flowers brand continued a solid top- and bottom-line growth trends, with revenues gross margin and contribution margin all rising in what is traditionally a seasonally slow quarter.”

E-commerce sales, which are the e-retailer’s online and telephone orders of flowers and food, increased 2.3% to $107.1 million in fiscal Q1 compared with $104.7 million in the year-ago quarter. Total sales rose 6.3% year over year to $165.8 million from $156.0 million. 1-800-Flowers is No. 57 in the Internet Retailer 2016 Top 500 Guide.

McCann touted the retailer’s forays into mobile and social commerce and artificial intelligence-driven conversational commerce as examples of “reaching customers when, where and how is most convenient and relevant.”

In April, the e-retailer began offering consumers the ability to order from 1800Flowers.com using Amazon.com Inc.’s voice-based search program Alexa. The retailer also was one of the first retailers to sell via Facebook Inc.’s Messenger app, which has more than 1 billion monthly active users.

“As we look ahead into the key holiday season, we are well positioned to expand and build on these positive trends,” McCann said on the call. “In addition, we'll benefit from a number of key developments, including having all of our brands now on the multibrand website.” The retailer’s 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.

For fiscal Q1 2017 ended Oct. 2, 1-800-Flowers reported:

  • E-commerce sales of $107.1 million, up 2.3% from $104.7 million in Q1 of fiscal 2016.
  • Total sales of $165.8 million, up 6.3% from $156.0 million.
  • Consumer floral sales of $75.2 million, up 3.2% from $72.9 million.
  • Gourmet food and gift baskets sales of $69.8 million, up 13.3% from $61.6 million.
  • BloomNet Wire Service revenue of $21.0 million, down 2.3% from $21.5 million.
  • Net loss of $15.8 million compared with a loss of $5.4 million. The retailer says the net loss attributable for the year-ago quarter includes an after-tax benefit of $9.8 million reflecting settlement of the company’s insurance claims related to the Fannie May warehouse and distribution center fire that occurred on Thanksgiving Day 2014. On a comparable basis, net loss for fiscal Q1 2016 was $14.3 million.
 

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