FTD Q1 - US down, UK up

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CHR

CHR

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Here's the big news:

Soenen is stepping down as CEO of FTD. Read more here.

About Q1 - Press Release

Overall sales up $14.9 million, (13.8%) to $123.7M. Interflora's numbers from last year only included 2 months and much of the increase is due to the full three month inclusion this quarter.

FTD.com consumer sales
The Domestic Consumer Segment... representing a 3.5% decrease. The decline in revenue was driven by an 8.4% decrease in order volume, which was partially offset by a 4.7% increase in average order value during the quarter.
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Domestic Consumer orders during the first quarter of fiscal year 2008 totaled 703,000 compared to 768,000 orders in the same period of fiscal year 2007
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Bad news - big time.

US/Canada Florist Segment
The Domestic Florist Segment achieved revenue of $42.8 million in the first quarter of fiscal year 2008, compared to revenue of $43.8 million in the same period of the prior fiscal year. The decline in Florist Segment revenue was driven by a decrease in clearinghouse order volumes and other services.
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UK/International Segment
The International Segment continues to experience strong demand as the consumer order volume totaled 407,000 for the first quarter of fiscal year 2008, compared to 229,000 orders in the two-month period of the prior fiscal year (fiscal year 2008 first quarter order volume represents an increase of 9.1% over Interflora U.K.’s order volume for a like three-month period of the prior year).
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Average order value in the International Segment was $70.12 in the current quarter, compared to $62.84 for the two-month period of the prior fiscal year.
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The UK is the bright spot. Sales up, profits up - in part due to income tax changes in the UK and in part due to currency exchange rates.

Looks like Soenen has taken FTD as far as he thinks he can in North America and is ready to move on.
 
the u.s economy is really in the doldrums compared to the rest of the world. like ftd, most multinationals are seeing profits from overseas as our dollar falls and economy stalls. I could add a bunch of links verifying this trend but why bother...

when even bubble-headed super-models don't want to paid in dollars anymore, you know things are getting bad.
 
12BucksFor2Dozon said:
the u.s economy is really in the doldrums compared to the rest of the world. like ftd, most multinationals are seeing profits from overseas as our dollar falls and economy stalls. I could add a bunch of links verifying this trend but why bother...

when even bubble-headed super-models don't want to paid in dollars anymore, you know things are getting bad.
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I agree. While it would be fun to blame all this on Mike, I think the economy has a lot to do with it. However, I also think that in their quest for current earnings, they have eroded the value of the brand, which destroys customer loyalty. That clearly has an impact during a downturn in the economy.

However, before anyone starts with the cheering, I predict the next CEO will be at least as bad. Because Leonard Greene can't sell the company, they will have to squeeze out every dime they can before dumping it to a management buyout or something like that. And THAT, my fellow flowerchatters, means a tough road ahead for all of us.
 
I wonder if they would hire me?????
Luc
 
Bigted said:
I agree. While it would be fun to blame all this on Mike, I think the economy has a lot to do with it.
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During the same quarter, 1800 was up in both units and sales. So were we.

FTD has been practically giving flowers away in daily email blasts. 24 roses for $19.95, etc.... IMO consumers are voting with their dollars and going elsewhere.

I predict the next CEO will be at least as bad.
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Agreed. They can't squeeze consumers, so they'll be looking at "old faithful" - the florists - to improve the bottom line with nickel and dime fee increases surely on the horizon.
 
Bigted said:
Because Leonard Greene can't sell the company, they will have to squeeze out every dime they can before dumping it to a management buyout or something like that. And THAT, my fellow flowerchatters, means a tough road ahead for all of us.
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Umm you mean for all of you FTD'ers Right?
 
What Bad News?

I just finished listening to the earnings call replay. Didn't hear any bad news in Mike's view. Mike’s very optimistic about FTD’S business. He said it was a promotion to go to the board of directors.

Some other observations that I heard:

Technology POS: They are converting 2.6 to loosing 1 to Teleflora.
Up 18 %
Many new customers are top shops bringing FTD new order volume.
They have the best technology
As they sell more it will help FTD in the future

Shifting orders from Shipped to florist filled to achieve stabilization. Had been shifting away from florist 10-15 %. That has stopped as they have re mixed there selling.


Marketing: More direct marketing with Catalogs and Post cards.
FTD will be in 65 % of market by advertising in 2,200 yellow page books.
FTD had stayed out of this market with respect to a large
customer.
Increasing Radio advertising.
Added sky mall and other partners
See good opportunity overseas as the cost of mkt is less then US

Direct ship: Very Wang and Todd Oldham are doing well.
Just added Harry and David and our doing a same day test with there items.
 
Eric S said:
Umm you mean for all of you FTD'ers Right?
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The FTD'ers will be most impacted. However, these kind of actions tend to flow through the whole system. For example, any increase in charges from one WS are usually followed by the other WS. Also, the charges will make it tougher on shops that are already struggling financially, forcing them to do things that will hurt the whole industry.

No, I don't see any good coming out of this change.
 
David said:
Mike’s very optimistic about FTD’S business.
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The number are bad, David. The US revenues were down in both consumer and florist segments. 1-800-flowers went up during the same period in both segments. The gross-profit margin% was also down (44.4% to 42.5%), while 1-800-flowers improved the margin% during the same period.

The UK revenue appear to be up, but remember that the number in 2006 represents only 2-month revenue while the one in 2007 represents 3-month revenue. On top of that, the dollar has weakened relative to Euro, which increases the dollar revenue even when the Euro revenue stays the same.

David said:
He said it was a promotion to go to the board of directors.
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No, he was fired from the job basically. Technically, Chairman of the board is superior to CEO, because board of directors represent the interest of shareholders (owners), while CEO is just an employee appointed by the board. CEO can't do anything without the board's approval.

In reality, however, Chairmans of most companies are not involved in the operation of their companies at all. They meet maybe once a week, look at the financilas briefly, exchange goships, and play golf together. That's what they do. For example, Bill Gates retires from CEO of Microsoft to become the Chairman.
 
Bigted said:
I agree. While it would be fun to blame all this on Mike, I think the economy has a lot to do with it.
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Geez I wonder who bloomz would blame that on???


hmmmmm, gotta think about that one.
 
goldfish said:
No, he was fired from the job basically. Technically, Chairman of the board is superior to CEO, because board of directors represent the interest of shareholders (owners), while CEO is just an employee appointed by the board. CEO can't do anything without the board's approval.

In reality, however, Chairmans of most companies are not involved in the operation of their companies at all. They meet maybe once a week, look at the financilas briefly, exchange goships, and play golf together. That's what they do. For example, Bill Gates retires from CEO of Microsoft to become the Chairman.
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I agree - If it was a promotion he would now be the CEO and Chairman of the Board. That's a pretty common thing.
 
Well I don't know.. he has been easying himself out of that position for a long time, took all his bonus' & high pay and now it is time to go somewhere else when the s*** hits the fan.. but in the long run I think he did exactly what Green Group wanted him to do. He moved into the internet direct ship sales, raised all fees, spun off losing dept.s(marketplace, cards) locked in a lot of partners in the internet advertising game, got rid of some of the non paying problem florists, got into supermarkets to expand their OG status to please the florists that want incomings, changed their technology to one platform, outsourced FAH and most probably will do the same for tech. Cut a lot of expenses and payroll.
If he had been fired he would not have been moved to the Chairman position.. and remember this is a young guy.. he has his pile of money and can now go do something else

We may not like what he did, it may have hurt our part of the business but from FTD Inc it was a win win win.
 
David said:
Technology POS: They are converting 2.6 to loosing 1 to Teleflora.
Up 18 %
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I don't see anything here...but fudged numbers..."Converting 2.6 to losing 1 to TF" says they are losing 1 in 4 to TF, and the conversions are many old Advantage users downgrading to Mercury...
 
carol said:
If he had been fired he would not have been moved to the Chairman position.. and remember this is a young guy.. he has his pile of money and can now go do something else.
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Carol, you can read the transcript of his conference call here.

It's very long, but in his first statement he said (last paragraph):

We are going to go ahead and look for, begin the search for a new CEO and President to handle the day-to-day operating responsibilities of FTD. ... A lot of companies don’t have this kind of timeframe to work with and my ongoing commitment to be with the company not just through this transition but as Chairman going forward hopefully will ensure a very, very smooth transition and maximum continuity in the company going forward. We’ll talk a little bit more about that going forward, but clearly a decision, a choice I’ve made on my own after 10 years of being with FTD, a change I’m looking forward to and one that will have a minimum impact on the company.
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When a departing CEO said the decision was his own, it means he was fired, or, how do we say... "persuaded to step down." Soon, he will find another job and move on.
 
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