FTD Q4 - Consumer Sales increase 22.1%

[CHR]

FTD released its numbers for the quarter and FY '06 this morning. They had a very successful spring season.

Consumer orders during the fourth quarter totaled 1,565,000 compared to 1,327,000 orders in the same quarter of fiscal year 2005. Average order value increased slightly to $59.76 in the current quarter from $58.78 in the prior year's quarter. The percentage of Internet orders continued to grow in this segment, increasing to 90.5% from 89.3% in the fourth quarter of fiscal year 2005. Specialty gift orders, which include all orders delivered via common carrier, such as boxed flowers, plants, gourmet food gifts, holiday gifts, bath and beauty products, jewelry, wine and gift baskets, dried flowers and stuffed animals, comprised 41.6% of total orders for the fourth quarter compared to 30.7% of total orders for the fourth quarter of fiscal year 2005.

Emphasis mine. I understand the Todd Oldham fresh arrangements have been a resounding success.

Debt from Interflora Purchase:

In connection with the Interflora acquisition, the Company's bank debt was refinanced, in part, to provide for the purchase price of the acquisition. The new $225 million senior secured credit facility consists of a $150 million term loan and a $75 million revolving credit facility. The existing senior subordinated notes remain outstanding. Upon consummation of the acquisition on July 31, 2006, the Company had total debt outstanding of approximately $345 million.

The Interflora purchase just closed so the impact of this new debt is yet to be seen in financial statements.

A conference call to discuss the numbers is scheduled for 10AM eastern time. Will be interesting to see how Wall Street responds to these numbers.

22% growth in sales. Amazing. I don't know of a single long-established florist that had increases even close to that.

 

[12BucksFor2Dozon]

I think Wall Street has long ago weighed in on its thoughts of the disruptive technology of direct ship gifting/flowers and has given it its full support. The Street success of Provide Commerce and the boost that FTD stock got as they started talking direct-ship-nothings to the WS analyst's last spring shows that investors think this is one area where the internet is king and mom n pop florist represent a dying business model. For the most part they are right...the fight to retain the everyday bouquet part of our businesses will weed out the weak and make the strong even stronger.

Apparently its really working for them financially...how do all you FTD people feel as you watch your "partner", whose now-mighty brand was built on the backs of YOUR hard work over the years, is now taking your consumer sales and stuffing them in its back pocket?

Yuck!

 

[CHR]

Wall Street loved the news - up $1.88/share to close at $15.85. http://finance.yahoo.com/q/bc?s=FTD&t=5d&l=on&z=m&q=l&c=

FTD is projecting revenues of $630M for FY2007. The current year's was $465M so I'm guessing the '07 number includes Interflora UK sales.

Haven't yet had a chance to listen to the conference call but will write a summary after I do.

 

[CHR]

A little more detail about the sales numbers

2005 Q4 Consumer Sales - $78.0M
1,327,000 orders - average sale $58.78
30.7% direct ship - 407,400 orders
69.3% florist delivered - 919,600 orders

2006 Q4 Consumer Sales - $95.3M
1,565,000 orders - average sale $59.76
41.6% direct ship - 651,000 orders
59.4% florist delivered - 914,000 orders

- - - - - - - - - - - - - - - - - - - - - - -

FY 2005 Consumer Sales - $247.1M
4,073,000 orders - average sale $60.67
28.8% direct ship - 1,173,00 orders
71.2% florist delivered - 2,900,000 orders

FY 2006 Consumer Sales - $275.8M
4,508,000 orders - average sale $60.38
38.3% direct ship - 1,727,000 orders
61.7% florist delivered - 2,791,000 orders

109,000 less orders filled by florists than the previous year - averaging a 6 order per store decrease based on the current figure of 18,900 members. Stores would have filled on average 148 orders each or 12 per month.

With the average sale actually down, I have to believe it's due to the lower price points of the drop-ship products vs florist-delivered designs.

Are consumers buying more drop-ship products because of price point or prominence in the product mix?

Internet orders as a percentage of total orders in this segment continued to grow, increasing to 90.1% for fiscal 2006 from 87.2% in fiscal year 2005.

I hope those florists that continue to say they get one online order for every two, three or four phone calls based on their site exposure take a good look at their sites to see how they can increase conversions.

 

[Mikey the Flower Guy]

A little more detail about the sales numbers

I hope those florists that continue to say they get one online order for every two, three or four phone calls based on their site exposure take a good look at their sites to see how they can increase conversions.

Agreed....

 

[mlou]

A little more detail about the sales numbers
...I hope those florists that continue to say they get one online order for every two, three or four phone calls based on their site exposure take a good look at their sites to see how they can increase conversions.

Ok, I started a new thread...
Ideas to Improve Online Conversion
http://www.flowerchat.com/forums/showthread.php?p=61994#post61994
Didn't want to hijack the FTD thread...

.

 

[Eric S]

Wouldn't it be interesting to see what happens when FTD finally gets around to release how many florist have really left them?

I only say this because I finally recieved my credit from my last statement back from Novemeber. But now I notice that I am recieveing a statement again this month just showing the credit paid for. Almost 11 months to this point.

 

[Bigted]

The FTD results, combined with a couple of other things are a little scary.
1. Direct ship is clearly kicking in for them - There's no stopping them now
2. The service on the new debt will put some serious pressure on them
3. 1-800s poor results will convince Mike that only he is on the right road.

If these developments don't convince every florist to completely focus on their local business, I don't know what will.

 

[David]

2. The service on the new debt will put some serious pressure on them

This didn’t seem to be a problem during the conference call. In fact Michael said they are situated well financial to make other deals as the market presented themselves. He said Leonard green is happy with FTD management.

Wouldn't it be interesting to see what happens when FTD finally gets around to release how many florist have really left them?

During the call Michael spoke of about 20,000 florists. They did say in fact they have 18,900 florists. Michael said that it would continue to trend down. He was not concerned because the florists they loose are not purchasing a lot of goods and services from them. The members he looses will be offset by gains in the grocery store and internet area. He said he was pleased with progress with the grocery Channel group at FTD and compared to other industry like star bucks there are a lot more florists.

 

[flowerknife+us]

During the call Michael spoke of about 20,000 florists. They did say in fact they have 18,900 florists. Michael said that it would continue to trend down. He was not concerned because the florists they loose are not purchasing a lot of goods and services from them. The members he looses will be offset by gains in the grocery store and internet area. He said he was pleased with progress with the grocery Channel group at FTD and compared to other industry like star bucks there are a lot more florists.[/quote]

Makes one want to run right out and join up.


Statements like the above only remind me why I left so many years ago.

As a Florist I feel insulted that such a comment would even be said publicy.

Here's my take. We pretend about the number of members. Then revise it down. Then openly state it will continue down, Their not conserned(don't care). Their not good customers.(add all the fees you pay). Their pleased(not crazy about) the supers. But more are comming arround. In the mean time. We'll continue to suck the florists.


How many of those 18,900 members are supermarket locations. Or does say, one Super pay one membership including the "branches" Or does each branch have to pay?

Could it be that members are say, 12.000 supers. 6900 florists????

 

[Mikey the Flower Guy]

Here is something bizarre.....

just got off the phone with my accountant.
She was throwing questions at me, like i had done something criminal, and then i stopped her and asked " Why are you bombing me??"
She said " your sales increased 22.1% last year, and I wanna know how and why"!!
Ummmmmm...............FTD's sales increased 22.1%