1-800-Flowers grows revenue, but losses widen
Harry & David's parent company, 1-800-Flowers.com today reported its losses widened during fiscal first quarter 2016 to $4.5 million, or 7 cents per share, from $4.2 million a year ago.
The Westbury, New York-based flower and gourmet gift retailer reported revenues of $156 million in the period, driven primarily by its Harry & David business.
The Harry & David revenue contributions, combined with 7.7 percent revenue growth in the firm's BloomNet enterprise.
“In our Harry & David business, during the first quarter we achieved solid year-over-year revenue growth while significantly reducing the traditional seasonal operating losses for the period," CEO Jim McCann said in a statement.
The first quarter is traditionally soft for Harry & David, with no big gift-buying holidays and larger expenses as it ramps up for the second quarter, which includes Christmas and is by far its biggest quarter.
"These efforts, driven by the very talented teams that we have assembled across the enterprise, are doing an excellent job of identifying and aggressively going after cost synergies in all areas of our operations," McCann said. "As such, we are confident in our ability to achieve the $15 million in operating cost synergies that we originally forecast and potentially exceed it in the years ahead.”
Operating expense and operating expense ratio were higher during the quarter, 1-800-Flowers said, reflecting Harry & David's operating expenses which were not included in the prior year period due to the timing of the acquisition. On a comparable basis, including the Harry & David results, operating expense dropped slightly to $87.4 million from $87.9 million.
The gourmet foods and gift baskets component, of which Harry & David is a key element, saw quarterly revenue growth of 90.3 percent to $61.6 million, compared to $32.4 million a year ago. Off-season operational losses during the quarter contributed to an $8.5 million deficit compared to $2.4 million last year. Harry & David's operating loss for the period declined $1.4 million to $8.5 million.
"Our merger with Harry & David continues to go very well," said 1-800 Flowers.com spokesman Joe Pititto. "For the fiscal first quarter, on an apples-to-apples basis — or should I say, pears-to-pears — Harry & David grew its revenues by several million dollars and concurrently reduced its seasonal operating loss by several million dollars. We achieved this by leveraging our combined shared services platform, including technology, finance, human resources, and sourcing capabilities.
Pititto said new Harry & David and Wolferman's tabs on the company's multi-brand website are performing well, and bringing a significant number of potential new customers to their products.
"Overall, we are positioned well for the important holiday season," he said.
Reach reporter Greg Stiles at 541-776-4463 or email@example.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at https://www.facebook.com/greg.stiles.31, and read his blog at www.mailtribune.com/EconomicEdge.