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Strong holiday sales boost 1-800-Flowers.com revenues
Strong Valentine's Day sales, the timing of key holidays and products such as floral bouquets designed to look like puppies and festive giant cocktails boosted sales and earnings at 1-800-Flowers.com during its third quarter.
The Carle Place florist and gift basket retailer Tuesday said revenues in the quarter ended March 31 rose to $192.6 million, up 7.2 percent from the same period in the previous year. The company also said it made a $2.64-million profit, compared to an $85,000 loss reported in the prior year's third quarter.
"Results for the quarter were primarily driven by a strong Valentine holiday performance in our 1-800-Flowers.com brand [consumer floral unit], which grew revenues more than 11 percent during the month of February," said chief executive Jim McCann.
He also said the company has been strengthening its financial structure and expects to finish the fiscal year with cash and no debt, as it looks for acquisitions of complementary businesses.
Shares of 1-800-Flowers.com fell Tuesday after the earnings report, closing at $5.93, down 12 cents. The company missed analysts' revenue expectations, coming in just under their average estimate of $194.5 million for the quarter. The stock had risen from $2.89 in November and recently reached levels not seen since the financial crisis peaked in the fall of 2008.
Valentine's Day falling on a Thursday and Easter occurring in the third quarter boosted revenues during the period. As did other florists, 1-800-Flowers .com had more time to prepare and stagger Valentine's Day shipments, said Eric Beder, associate director of research at Brean Capital, a Manhattan investment banking firm.
"More importantly, the company has been much more aggressive in offering value-added products instead of just the $20 roses," Beder said. "They offer a lot of unique items you don't see every day, and that helped drive business."
The Easter holiday also helped lift revenues in the company's gourmet and gift basket segment, which increased 14.5 percent from the same period a year ago. The company drew 702,000 new customers, a 14.6 percent increase from last year, while continuing to fill orders for existing customers, who represented almost 60 percent of the company's total customers for the quarter.