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MailTribune.com
  • Harry & David has $11.9 million quarterly loss

    Medford company's revenue drops 4.6%
  • Harry & David posted an $11.9 million loss in the quarter that ended Sept. 28, slightly more than the $11.5 million setback it experienced a year earlier.
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  • Harry & David posted an $11.9 million loss in the quarter that ended Sept. 28, slightly more than the $11.5 million setback it experienced a year earlier.
    The Medford gourmet food and gift company's fiscal first-quarter revenue declined 4.6 percent, with sales of $31.7 million, compared with $33.2 million a year ago.
    Harry & David considers the three months during harvest as the ramp-up period for its critical holiday sales run, when the majority of its revenue — and earnings — are accumulated. When all was said and done last year, the company's net earnings were just under $13 million.
    "Our first quarter results came in as we expected," said Craig Johnson, Harry & David's chief executive officer, in a statement. "We adjusted our marketing cadence this year in response to this year's holiday calendar and a shift in our customer contact strategies."
    Johnson said Harry & David reduced its catalog circulation by 16 percent compared with late summer 2012.
    "The decreased catalog circulation had a negative impact on sales during the first quarter, which we anticipated, but we expect to see customer growth during the second quarter," his statement said. "With a 10-percent customer file growth from last year, we anticipate to see the fruits of our labor in the coming months. Our focus on customer experience continues to drive changes in our assortment, our online and offline presentation, and our selling processes."
    The company said lower sales were, in part, attributed to store closures. Wholesale saw a $300,000, or 7.2 percent, gain during the period because of added customers.
    A shift in catalog circulation into the second quarter took a toll on Web traffic and order counts. Direct-marketing sales, including catalog, Internet, business-to-business and outbound telemarketing, slipped $300,000, or 1.9 percent, to $17.9 million.
    "We believe that we are well-positioned to provide an exceptional customer shopping experience and continue to grow our business during the upcoming holiday selling period," Johnson said. "The investment made in customer file growth provides access to more customers than it has in several years. Our merchandising teams have provided a strong assortment of new, innovative products to supplement our well-proven core offering."
    Heading into Labor Day weekend, Harry & David operated 50 retail stores in 26 states. It will open 33 seasonal pop-up stores in kiosks in key metropolitan areas to stoke demand.
    Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter @GregMTBusiness, and read his blog at www.mailtribune.com/Economic Edge.
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