1-800-Flowers Expects 21% Drop

[CHR]

Somehow missed this last week:

1-800-Flowers.com sees lower Q3 revenue

April 16 (Reuters) - Gift retailer 1-800-Flowers.Com Inc (FLWS.O) said it expects a 21 percent drop in third-quarter revenue, hurt by weakness in the retail sector, the Easter holiday shift and lower Valentine's Day sales. The company, which amended its credit agreement with a group of lenders led by JPMorgan Chase Bank, said the shift of Easter into April from March accounted for about $7 million of the revenue shortfall.

The rest of the shortfall was because Valentine's Day was on a Saturday this year, rather than a weekday -- which is better for the company's online business.

The company reported third-quarter revenue of $219.6 million last year, implying revenue of about $173.5 million for the third quarter ended March 29.

Analysts on average had expected revenue of $174.2 million for the quarter, according to Reuters Estimates.

The revised credit facility includes a prepayment of $20 million, which reduces the company's outstanding term loans to $92.4 million.

The company's revolving credit facility was reduced to a seasonally adjusting range of $75 million to $125 million from $165 million.

The company, which has not drawn anything from the revolving credit line, said the amendment eliminates the consolidated net worth covenant.

The company said it will pay interest on its outstanding term loan and revolver at London Interbank Offered Rate (LIBOR) plus a range of 300 to 450 basis points.

The V Day Saturday and April Easter affected most of our Jan-March numbers, although it's interesting 1-800 has made light concession for the current economic conditions - which I believe were the strongest influence in the decline.

They've usually announced Q3 numbers during Secretaries Week. Wonder if they'll postpone until after M Day to keep negative news out of the headlines.

The article above was bundled with news about a change in 1-800's revolving credit facility, so it didn't seem to get much attention.

 

[lori042499]

They are probably trying to put a positive spin on things and hope that they do recoup some of their numbers this quarter, but aren't we all hoping for that to be true...I do believe that the economy does have a whole lot to do with their declines, I have been noticing much lower volume through them, it does have something to do with signing on new florists, but that coupled with lower volume of orders, makes it extra noticable.