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Sales growth fails to bloom in Q3 at 1-800-Flowers.com

April 27, 2016 03:51 PM
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Sales of Harry & David gourmet treats and gifts, up 6.6%, helped 1-800-Flowers.com Inc.’s sales stay positive in the third quarter.

E-commerce sales, which include online and telephone orders of flowers and food, increased 0.8% to $179.4 million from $177.9 million in fiscal Q3 2016 ended March 27, 1-800-Flowers, No. 57 in the Internet Retailer 2016 Top 500 Guide, reported Tuesday. For the first nine months of fiscal 2016, e-commerce sales have increased 3.8% to $696.4 million from $671.0 million.

“We are very pleased with the benefits we are driving across our platform related to the integration of Harry & David and we continue to be excited by the opportunities we see to further improve its growth rate in the years ahead,” CEO Jim McCann said Tuesday in the fiscal Q3 earnings call with investors, according to a transcript from Seeking Alpha. “Executing on one of these opportunities earlier this month, we completed the move of Harry & David along with Wolferman’s and Stock Yards brands onto our multibrand website. We believe this will significantly enhance our cross-merchandising and marketing capabilities and help accelerate growth for all of our businesses across the platform.”

The retailer’s multibranded e-commerce platform uses a single home page with multiple tabs for its brands, including Harry & David, Fannie May candy, Cheryl’s cookies, The Popcorn Factory and Wolferman’s baked goods.

President Chris McCann, who will succeed his brother as CEO on June 30 as part of a planned transition, told analysts that 1-800-Flowers’ goal is to increase the number of customers who buy from multiple brands. “We are excited by the results we are seeing in terms of enhanced retention, average spend and lifetime value when customers become multibrand. Having all of our brands now on the same platform enhances our ability to market Celebrations Passport, Rewards and Reminders. And as we grow membership in these programs, we can begin to accelerate the growth of multibrand customers.”

While sales of gourmet food and gift baskets grew, the retailer continued to feel the effects of a Thanksgiving Day 2014 fire that destroyed a Fannie May warehouse and distribution center, Jim McCann said. Business has not yet bounced back, but “we are confident that Fannie May will be well-positioned to show significantly improved performance as we head into the key holiday season in fiscal 2017,” he said.

Chris McCann said the retailer is changing its online and local marketing, product innovation, package design and store merchandising to boost customer traffic and improve Fannie May sales.

For fiscal Q3 2016 ended March 27, 1-800-Flowers reported:

  • E-commerce sales of $179.4 million, up 0.8% from $177.9 million in Q3 of fiscal 2015.
  • Total sales of $234.2 million, up 0.9% from $232.2 million.
  • Consumer floral sales of $113.2 million, a 3.0% decrease from $116.7 million.
  • Gourmet food and gift baskets sales of $99.1 million, up 6.6% from $93.0 million.
  • BloomNet Wire Service revenue of $22.5 million, down 2.2% from $23.0 million.
  • About 1.8 million customers placed orders, of which about 805,000, or 45%, were new customers.
  • Net loss of $9.1 million compared with a loss of $10.8 million in the same quarter last year.

For the nine months end March 27, 1800Flowers reported:

  • E-commerce sales of $696.4 million, up 3.8% from $671.0 million compared with the same period a year ago.
  • Total sales of $938.6 million, up 5.1% from $893.2 million.
  • Consumer floral sales of $281.0 million, a 3.3% decrease from $290.7 million.
  • Gourmet food and gift baskets sales of $595.0 million, up 10.2% from $540.0 million.
  • BloomNet Wire Service revenue of $63.7 million, up 1.0% from $63.1 million.
  • Net income of $46.9 million compared with $30.1 million.
 

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