1-800-Flowers Q1 Report

[CHR]

The numbers are out.

Consumer Floral: During the fiscal 2009 first quarter, revenues in this category were $83.5 million compared with $87.6 million in the prior year period. Gross margin for the quarter was 38.0 percent compared with 38.9 percent in last year's first quarter, primarily reflecting promotional pricing and higher fuel surcharges on direct-ship products from the Company's third-party shipping vendors. The lower gross margin results were somewhat offset by enhanced operating leverage.

In a nut shell, sales were down and the cost of sending through FedEx/UPS was up.

BloomNet Wire Service: Revenues increased 58.9 percent to $15.7 million compared with $9.9 million in the year ago period. This reflects both continued market share growth as well as contributions from the acquisition the Company made in July, 2008. Gross margin was 53.1 percent compared with 56.7 percent in the prior year period. The decline in gross margin can be attributed to product mix, reflecting the impact of wholesale margins associated with the contribution from the aforementioned acquisition.

Some (Part? Most?) of the revenue increase reflects the sales volume aquired through the purchase of Napco.

Gourmet Food and Gift Baskets: Revenues increased 60.5 percent to $37.2 million compared with $23.2 million in the prior year period. ... Fiscal 2009 first quarter results in this category reflect contributions from DesignPac Gifts, without which revenues and category contribution margin would have been down slightly compared with the prior year period while gross margin would have improved slightly.

As with BloomNet, growth was primarily acheived through the acquisition of a new company, DesignPac.

Customers:

During the fiscal first quarter, the Company attracted 461,000 new customers, of whom 75 percent, or 344,000, came to the Company through its online channels. Approximately 1.3 million customers placed orders during the quarter, of which 64 percent were repeat customers. This reflects the Company's ongoing focus on deepening the relationship with its existing customers as their trusted source for gifts and services for all of their celebratory occasions.

Compare that to last year's Q1 report:

The Company fulfilled approximately 1,654,200 orders through its E-commerce sales channels (online and telephonic sales) during the three months ended September 30, 2007, an increase of 1.1% over the prior year period.

That's a drop of more than 350,000 purchases or more than 20% of retail order volume. :wide:

Conference call at 8 AM this morning.

 

[BOSS]

http://www.marketwatch.com/news/sto...x?guid={40D428D2-0332-4753-A3E6-1D6C7345AD0B}
That's a drop of more than 350,000 purchases or more than 20% of retail order volume. :wide:

Personally, and I said this yesterday... I'd look for consumer sales at the dotcoN's to continue to decrease as disposable income declines. We all know that, but I'm hopeful that consumers will look a little harder, and purchase more from local merchants

Consumers *may* begin to associate the added "$ervice charge" with paying more than they need to. If this does occur, chances are, once they find new ways to order direct they will not return to the coN and remain loyal to local businesses.

 

[lori042499]

I have noticed a 20% drop in my bloomlink orders...I had even called them to see if I did anything to make this happen in any way. I was assured that my standing was still very good, but this may make my leaving inevitable....Which may not be a bad thing...especially where my local biz is up by 63% this month...

 

[LOTAKIDS]

bloomnet Monthly Fee--Raised

I just received my statement and my monthly fee was raised from $149.99 to $189.99..... I guess that one way to recoup revenue......Also can they do this without notice???? I guess it is time for them to go.... I am the only filling shop for this town, but the town over has 3. Oh Well can't afford to lose any more.

 

[Bigted]

Nice summary Cathy--like always. We are not 800 members, but we see the same trends with FTD/TL.

Not sure I agree with Boss though. With their advertising power and strength of brand, I suspect they will take an increasing share of a shrinking market. Hope I'm wrong.

 

[BOSS]

Not sure I agree with Boss though. With their advertising power and strength of brand, I suspect they will take an increasing share of a shrinking market. Hope I'm wrong.

I can dream can't I??

Ted...I know I am, and I'm sure you too are, looking at every penny???

Heck, I'm even demanding credits on a single broken carnation in a bunch!!!!!

 

[CMHflorist]

Thanks Cathy for the recap. New with 800 and have been hearing alot of contriversial things. So it is nice to have info to make my own opinion.

Jody

 

[coastieflowers]

usually your costs for 800 flowers depends on the amount of orders you get. I have negotiated a smaller fee just by asking (ok by threatening to quit) but it can be done.

 

[goldfish]

Their liability has increased by $50 mil relative to 2007 Q1.

http://www.marketwatch.com/tools/quotes/financials.asp?symb=FLWS&sid=153111&report=2&freq=2

I don't think it's a sign of good management. Textbook says they should be reducing asset/liability instead of increasing it during recession.

Maybe FTD should take over 1-800.

 

[bloomz]

That still seems to translate to almost 7 million floral orders a year assuming $50 if my math is right.

And that's still a huge ouch

 

[BOSS]

That still seems to translate to almost 7 million floral orders a year assuming $50 if my math is right.

And that's still a huge ouch

Yep... and us stoooooopid florists continue to help them help themselves to that share of the pie.

 

[Mikey the Flower Guy]

That still seems to translate to almost 7 million floral orders a year assuming $50 if my math is right.

And that's still a huge ouch

all things being "equal", the ouch is NOT what you perceive.
They have taken to "direct ship" on so many items, and products, that it's hard to split what's been "acquisition" growth, and natural growth.
1 800 is very "diversified" now...I think that organization will better "weather" this storm than most, BUT, as a REAL FLORIST, I'd have a REAL PROBLEM, being part of their "stable" of "filling stations" (silly florists) willing to pay extortion money, from their OWN pockets, to get orders, that are basically worthless, with NO real benefit to their business.
Larger shops, withe "excess" capacity, can and DO, take on 1800 to keep staff busy, BUT, there is NO MONEY to be made from 1800, believe me!!