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Revenue rises for Harry & David's parent company

Those who know Harry & David well don't expect a lot of dollar signs when it comes to the bottom line during July, August and September.

The same holds true for Harry & David's new parent company, 1-800-Flowers.com.

Just as the Medford-based gift and gourmet food company encounters a great deal of expense from pear harvest and preparation for the holiday sales season, 1-800-Flowers.com spends a great deal of money with comparably fewer sales in the late summer.

The Carle Place, N.Y., company, which closed its $142.5 million acquisition of Harry & David four weeks ago, Tuesday reported a net loss of $4.58 million for the fiscal 2015 first quarter Tuesday, showing a modest improvement from a $4.64 million net loss a year earlier. The company lost 7 cents per share during the quarter both this year and last. Still, revenue grew 3 percent to $126.7 million from $123 million.

The expense of buying Harry & David accounted for $700,000 of 1-800-Flowers' loss.

The good news, however, for 1-800-Flowers is the anticipated revenue surge coming the next two months.

Harry & David is expected to generate about 70 percent — roughly $260 to $275 million — of its annual revenue during the quarter that ends Dec. 28.

Joe Pititto, vice president for investor relations, said 1-800-Flowers anticipates its overall operation to produce 46 to 50 percent of its total annual $1.1 billion revenue during the quarter.

The Long Island company's CFO, William Shea, told analysts falling fuel prices will benefit all of its units during the holidays.

"The actual fuel prices in the month of October, and what we've seen at four-year lows, will benefit us in the holiday season," Shea said.

Asked whether 1-800-Flowers would tweak Harry & David's plans for the season, President Chris McCann indicated it wasn't the time to mess with the Medford company's plan.

However, he said there will be a few opportunities to test and learn during the quarter.

"You'll see some of our products appear on the Harry & David website and from a merchandising perspective, so Harry & David products appear on the 1-800-Flowers platform," McCann said. "So we could test just different ways of presenting that to the consumer and their acceptance of the brands going both ways. So don't expect anything dramatic. What we're trying to do is get some learning out of this season without being disruptive to the plan that was in place."

Asked about Harry & David's uneven revenue stream, CEO Jim McCann indicated long-term that will be a major goal, but in coming months he wanted to see a bigger difference.

"Frankly, the first effort will be to exaggerate it," Jim McCann said. "What I mean by that is, we think they have a lot of growth opportunities in this calendar fourth-quarter, our second fiscal quarter, that together we can go after more aggressively. So I do not mind one bit if we exaggerate the seasonality of business with good growth."

Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31, and read his blog at www.mailtribune.com/Economic Edge.