1-800-Flowers Q3 Report

[CHR]

1-800-Flowers released their report for Q3 this morning (Jan - March) and it paints quite a different picture than FTD's from yesterday.

A few highlights:

Consumer Floral

During the fiscal 2012 third quarter, revenues in this category grew 12.6 percent to $113.0 million compared with $100.3 million in the prior year period. This was driven by our core 1-800-FLOWERS.COM ecommerce business and contributions from two small acquisitions (FineStationery.com and Flowerama which were completed in the second half of fiscal 2011 and early in the first quarter of fiscal 2012, respectively).

BloomNet

Revenues increased 15.9 percent to $24.1 million compared with $20.8 million in the prior year period, primarily reflecting increased shop-to-shop order volume and wholesale product sales.

Gourmet & Gift Baskets

Revenues increased 13.6 percent to $43.1 million compared with $37.9 million in the prior year period. This primarily reflected the shift of the Easter holiday to early in the Company’s fiscal fourth quarter as well as growth within the Fannie May and Cheryl’s brands.

On customer retention:

During the fiscal third quarter, the Company attracted 613,000 new customers. Approximately 1.6 million customers placed orders during the quarter, of whom 61.5 percent were repeat customers. This reflects the Company’s successful efforts to engage with its customers and deepen their relationships as they help them deliver smiles.

The bottom line for the quarter:

• Earnings Per Share from continuing operations improved to break even compared with a net loss per share of ($0.04) in the prior year period.

So despite the significant growth in sales, the company broke even.

Anybody have insight on what helped boost 1-800's sales by 9% YOY (vs FTD's increase of just 1% for the same period)? The press release seems to indicate that 1-800's products plus their emphasis on Social Media were the driving forces. Thoughts?

 

[BOSS]

Anybody have insight on what helped boost 1-800's sales by 9% YOY (vs FTD's increase of just 1% for the same period)? The press release seems to indicate that 1-800's products plus their emphasis on Social Media were the driving forces. Thoughts?

Personally I feel 800's images are more realistic, not to mention more up to date as well as more stylish. Perhaps consumers feel the same way. And judging by their customer increase, perhaps they are taking some away from FTD as well as local florists.

Likewise, after watching the social debacle they all faced at VD, I think from what I followed, that 800 was way more proactive and on top of it from the get-go often sincerely apologizing, and not just "please contact or community manager with order number", 800 actually engaged people in public... transparency.

Not sure how they account for the Flowerama sales, (have not had time to read the report)

 

[bootcampguy]

My guess would be the oversees orders. My other company has a DOD number and I've seen where 800 is very involved in the overseas "theater" and collects many orders during the big 3 holidays (friend of ours has son over there). They get automatic emails that show last 2 orders, amount and card message and allow you to set orders up a re-occur.

Another note, they can't seem to climb over the 61% for customer retention. Flip it around and that means 39% dislike. die, move on to another source, etc. They broke even because of the money they spent to retain as high as 61%.

 

[Simon Says]

Didn't FYF switch from TF to 1-800 sometime during the period Nov-Mar and so positively adding to their revenue for the reported Q3 (for 1-800).

 

[bootcampguy]

They switched over Jan 19th, 2011 to 800.

 

[anytimeflowers]

I do believe Bloomnet wire service is showing the dramatic increase due to FYF sending their orders. This is a YOY comparison, so it would make sense.

The others are simply explained through their "small aquistions" as well as Easter. I've actually always added March and April together in order to get a true read for that very reason. It can especially wreak havoc on quarters since March is usually in one quarter and April in another.

I will say that I agree with Boss's take on their web offerings, especially with all of the different gift choices. When I look at their website, it seems fresh and beautiful. When I look at FTD, it looks very old-fashioned.

Florists everywhere had, for the most part, significant increases this year for Easter so that probably is driving the numbers for the quarter. I don't know how many shares there are, but .04 loss per would probably be pretty big.

I will say this, I'm surprised at how they have managed to turn things around, I was predicting their doom ~ or at least Bloomnet ~ but they really do seem to be putting a lot of effort into sponsoring design shows. Imo, that always plays a big part in member florist retention ~ and also the reason why they have an increase in wholesale. Of course, FYF could be driving a lot of the extra wholesale as well........speculation.

 

[CHR]

The FYF orders would be accounted for in the BloomNet division.

IMO 1-800 is gaining sales by substantially discounting ('free shipping/no service charge and group buying efforts.) So even though sales increased, the profits aren't there.

On $537M in sales through the first 3 quarters, the net profit to shareholders is approx. $11.5M from continuing operations ~ 2.15%