Well they are coming out in full force and with very little debt...
BEYOND THE GARDEN. Still, investors may have reason to take a closer look at 1-800-Flowers this year. Its net income is expected to rise by 40%, to $11 million, in the year ending in July, as sales increase by 15%, to $771 million. Thanks to those numbers, it's impressing analysts far more than rival FTD. The catalyst: its diversification moves.
Chief Executive Officer James F. McCann, who founded 1-800-Flowers in a New York City storefront in 1976, has been forging tight ties with florists across the country through Bloomnet, a 6,500-shop network that launched in early 2005. Analyst Eric Beder of Brean Murray Carret expects Bloomnet will undercut FTD's pricing by as much as 30% in 2006, giving more florists a reason to jump from FTD's 20,000-plus member network.
Other analysts say Bloomnet poses a big competitive challenge to the entire industry. Along with privately held Teleflora, FTD has ruled the greenhouse by providing florists nationwide with such services as a credit-card clearinghouse, national advertising, and an electronic network to process orders and transmit messages. Now, 1-800-Flowers will be doing the same things.
Downers Grove (Ill.)-based FTD is burdened by a long-term debt that now totals about $233.1 million, vs. a paltry $2.3 million debt for 1-800-Flowers. And FTD is using its cash to shore up the stock price with repurchases and paydowns on that debt. By contrast, 1-800-Flowers can use its cash on expansions or acquisitions.
Should be very interesting for retail florists in the coming months ahead
BEYOND THE GARDEN. Still, investors may have reason to take a closer look at 1-800-Flowers this year. Its net income is expected to rise by 40%, to $11 million, in the year ending in July, as sales increase by 15%, to $771 million. Thanks to those numbers, it's impressing analysts far more than rival FTD. The catalyst: its diversification moves.
Chief Executive Officer James F. McCann, who founded 1-800-Flowers in a New York City storefront in 1976, has been forging tight ties with florists across the country through Bloomnet, a 6,500-shop network that launched in early 2005. Analyst Eric Beder of Brean Murray Carret expects Bloomnet will undercut FTD's pricing by as much as 30% in 2006, giving more florists a reason to jump from FTD's 20,000-plus member network.
Other analysts say Bloomnet poses a big competitive challenge to the entire industry. Along with privately held Teleflora, FTD has ruled the greenhouse by providing florists nationwide with such services as a credit-card clearinghouse, national advertising, and an electronic network to process orders and transmit messages. Now, 1-800-Flowers will be doing the same things.
Downers Grove (Ill.)-based FTD is burdened by a long-term debt that now totals about $233.1 million, vs. a paltry $2.3 million debt for 1-800-Flowers. And FTD is using its cash to shore up the stock price with repurchases and paydowns on that debt. By contrast, 1-800-Flowers can use its cash on expansions or acquisitions.
Should be very interesting for retail florists in the coming months ahead