Article 1-800-Flowers swings to a loss

[David]

1-800-Flowers swings to a loss

by Laura Glasser

Published: August 20th, 2009

Carle Place-based 1-800-Flowers.com said on Thursday posted a loss in its fiscal fourth quarter on of a drop in consumer spending caused by the recession and losses from discontinued operations.

The florist and gift retailer reported a loss of $22.2 million, or 35 cents per share, for the quarter ended June 30, compared with income of $4.3 million, or 7 cents per share, in the same quarter last year.

During the quarter, the company discontinued its Home and children’s gifts business to cut costs and focus on its core floral, gourmet foods and gift baskets divisions. Without the results from the discontinued division, 1-800-Flowers would have lost $13.1 million during the quarter.

Fourth-quarter sales fell 8 percent to $172 million, down from $187 million in the same quarter last year.

1-800-Flowers also reported results for its fiscal year, posting a $98 million loss for 2009, compared with income of $21 million in fiscal 2008.

The company said it expects fiscal 2010 earnings to be flat to down 5 percent from 2009 because of continued weakness in consumer spending and the general economy.

“Looking ahead, we will continue to focus on our key strategic priorities, [which] will enable us to achieve strong bottom-line results, even in a challenging economic climate, and build long-term shareholder value,” said McCann.

 

[Bigted]

All I can say is that if I had $170 million in revenue for one quarter, it seems like I could have made a little money.

 

[goldfish]

How can they afford to lose 98 mils? If we lost 1/1,000 of it, we would be dead.

 

[concord]

Cry me a river!

 

[BOSS]

“Looking ahead, we will continue to focus on our key strategic priorities, [which] will enable us to achieve strong bottom-line results, even in a challenging economic climate, and build long-term shareholder value,” said McCann.

Not if I can help it.... RUN FLORIST RUN!!!

 

[kt4ye]

How can they afford to lose 98 mils? If we lost 1/1,000 of it, we would be dead.

The answer is in a VERY old joke.

The CEO of a large corporation calls the Chief Financial Officer in and says, "George, what will our annual profit be this year?"

"Janet," replies the CFO, "what would you like it to be?"

There is so much difference between OUR books -- where cash is the name of the game -- and the books of a BIG corporation, that it cannot be explained without both an MBA AND a whole bunch of "hand waving."

As for 1-800, I wish nobody ill. But their "wounds" are all self-inflicted.

All the best.

Bill

 

[CHR]

David - Thanks for getting the earnings report going. More From BusinessWire

Consumer Floral: For fiscal 2009, revenues in this category were $414.9 million compared with $491.7 million in the prior year. Revenues for the fiscal fourth quarter were $129.0 million compared with $149.0 million in the prior year period. Gross profit margin for fiscal 2009 was 36.6 percent, compared with 38.7 percent in fiscal 2008. For the fourth quarter, gross profit margin was 36.5 percent compared with 38.7 percent in the prior year period. The decline in gross profit margin for the year and the quarter was primarily related to the challenging consumer economy and resulting increase in promotional pricing. Category contribution margin for the fiscal year was $40.9 million compared with $63 million in the prior year. For the fiscal fourth quarter, category contribution margin was $13.5 million, compared with $20.2 million in the prior year period.

BloomNet Wire Service: For fiscal 2009, revenues increased 19.5 percent to $63.9 million, compared with $53.5 million in the prior year, primarily reflecting the Company’s acquisition of Napco in July 2008. Revenues for the fiscal fourth quarter increased 4.2 percent to $16.1 million, compared with $15.5 million in the prior year period. Gross profit margin for fiscal 2009 was 55.3 percent compared with 56.2 percent in the prior year. For the fiscal fourth quarter, gross profit margin was 55.2 percent compared with 56.8 percent in the prior year period. Category contribution margin for fiscal 2009 increased 3.2 percent to $19.1 million, compared with $18.5 million in the prior year period. This improvement reflected product and service revenue mix and pricing initiatives. For the fiscal fourth quarter, category contribution margin was $4.3 million, compared with $5.9 million in the prior year period. The lower category contribution margin in the fourth quarter reflected seasonal operating losses associated with the division’s Napco acquisition and increased bad-debt reserves reflecting the challenging economic climate.

Emphasis mine. Deep discounting hurt. Florists' income helped.

I am baffled that IIRC 1-800 claimed annual sales of almost $1B not so long ago, has acquired a few more companies, and now shows total sales of only about $720M.

Of all their product categories, flowers appear to have been hit the hardest. Is it the promotion of other product lines, the disappointment of consumers who purchase flowers, or the general direction of flowers being chosen less over other products.... maybe a combo of all three.???

 

[David]

Of all their product categories, flowers appear to have been hit the hardest. Is it the promotion of other product lines, the disappointment of consumers who purchase flowers, or the general direction of flowers being chosen less over other products.... maybe a combo of all three.???

I think the flower end is becoming more and more competitive. Besides many consumers going direct. I think Teleflora.com is cutting in to them. Telelfora.com seem to be spending more and more on line. By the looks of their directory they have the largest amount of florist to help fund their operation.

 

[MANORVILLE]

Check all directories to see if the text size has changed !!!!!!!!!!!!!!!!!!!!!
Rumor has it....................but of course unsubstantiated !!!!!!!!!!!!!!!!!!!!

 

[Dazeal]

Cathy, 880 million.
http://finance.yahoo.com/q/co?s=FLWS

See their employees compared to FTD? 4000 employees? I know they own a bunch of little businesses like cookie makers, but 4k employees? WOW. Employee of the month there better get more than just a up-front parking spot.

 

[Eric S]

Its got to be the discounted products. We all know that when we sell a dozen roses today we make less because we sell them for less and they cost us more today then they did just three years ago. At least in my books.

I'm sure martha and all of the other brands have sucked some of the profits out as well.

Got a call from 800 a couple of weeks ago. Of course they call when I'm not there. I just can't believe they would even think of calling us.

They had so much coverage with all of the conroys and then they got greedy and started signing up anything with flowers. Today we see less conroys and I'm sure all of those other shops that signed up also disappeared.

Thank goodness we said see ya in 2005.

 

[Dior]

The answer is in a VERY old joke.

The CEO of a large corporation calls the Chief Financial Officer in and says, "George, what will our annual profit be this year?"

"Janet," replies the CFO, "what would you like it to be?"

There is so much difference between OUR books -- where cash is the name of the game -- and the books of a BIG corporation, that it cannot be explained without both an MBA AND a whole bunch of "hand waving."

As for 1-800, I wish nobody ill. But their "wounds" are all self-inflicted.

All the best.

Bill

Yup...what he said. Couldn't have said it better!

 

[terri]

I think the 4,000 employees (2008) was counting their part time employees.They're taking write offs on some of the smaller companies they own,which should improve their bottom line next year. They're also downsizing and/or getting rid of the children's lines. Unfortunately they just bought a gourmet basket company which may or may not cut into the florists bottom line. It looks like their Bloomnet division has increased their sales & profits. It appears that they may be refocusing on their floral divisions as it is their core business. (again)
terri

 

[Luc]

How come big compagnies like this can report BIG LOSSES and the banks still let them borrow or extend their credit lines, but small business like us, they do not want to deal with ??????

I guess they do not realize there is more smaller businesses out there that would surpass the total employee count at 1-800,

Luc

 

[lori042499]

All I can say is that if I had $170 million in revenue for one quarter, it seems like I could have made a little money.

Not if you were still staffed for 198 million in sales and if you carried inventory and everything else that goes with those kind of sales...Just remember that their overhead and office space and phone lines stay the same prices with or without biz just like us, so any drop in volume immediately affects the efficiency and the profit....

I read an article on flower shops and their size and interestingly enough some of the countries biggest flowers shops earning the most in dollars were profitting less than some of the smaller shops simply because of the higher overhead of labor, space and utilities and the larger dips in biz at the slow times making the slower time less manageable for a bigger company to control costs...

 

[Bigted]

I have no real evidence of this, but I believe that it is the name 1-800-flowers that is hurting them more than FTD/Tele. I think people associate 800 more as an order gatherer than the other two.

I only base this on comments of a couple of customers who were talking about flower middlemen and mentioned that 1-800 company.

 

[Dior]

Bloomnet's reported profit could be attributed in some way to their acquisition of NAPCO and that companies sales of products are added to the bottom line. It's not necessarily that the w/s portion of it is booming.

 

[lori042499]

I have no real evidence of this, but I believe that it is the name 1-800-flowers that is hurting them more than FTD/Tele. I think people associate 800 more as an order gatherer than the other two.

I only base this on comments of a couple of customers who were talking about flower middlemen and mentioned that 1-800 company.

I think you may be right with this too...The shop here in Melrose that just went from lfc with their own name to a full fledged 800-flowers franchise already has signs up telling the public that they are independently and locally owned and operated and that they are under the same ownership as before....They worked for almost a month before bothering with these signs, I don't think they were intending to put them up, until they started hearing questions by customers about the new name....I have had a few people come in here looking for a new florist that said they don't deal with chains for flowers....or they don't like 800-flowers...

 

[Mikey the Flower Guy]

still, it's not surprising that 800 is taking this hit...all it means is that they too, are NOT infallible.....
This economy is hitting in spots, where in the past, was largely "protected" from major turbulence, and as customers wise up, and find out THEY TOO, can save a bunch of money calling direct, and bypassing the OG "service charges"....

 

[lori042499]

Anyone know any facts and figures on how convenience stores are faring as of late compared to grocery stores...If the general public is changing that behavior it may be a good sign that they are really thinking deep about how their money is spent and really analyzing what they are getting for what dollar....and making better decisions based on their findings...