*Excludes a one-time net benefit primarily associated with the final settlement of the Company’s insurance claims related to the Fannie May warehouse fire that occurred on Thanksgiving Day, 2014.
CARLE PLACE, N.Y. - November 2, 2016 - (BUSINESS WIRE) - 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), the leading gourmet food and floral gift provider for all occasions, today reported results for its Fiscal 2017 first quarter.
Chris McCann, CEO of 1-800-FLOWERS.COM, Inc., said, “Our first quarter results reflect a continuation of the positive trends we have been seeing across our business for some time. In Gourmet Food and Gift Baskets, revenue growth accelerated, driven primarily by double digit growth in our wholesale baskets business as well as in our Cheryl’s and The Popcorn Factory brands. In addition, our Fannie May business recorded positive same store sales as well as solid ecommerce growth, reflecting the success of the initiatives we have implemented to enhance its performance.”
McCann noted that the Company’s floral business segments also continued to see positive trends during the quarter: “Our 1-800-Flowers brand continued its strong top and bottom-line growth trends, with revenues, gross margin and contribution margin all rising in what is a seasonally slow quarter. Our BloomNet wire service business also continued to drive very strong bottom line results, increasing its contribution margin to nearly 35 percent despite slightly lower revenues, which primarily reflected timing of some wholesale orders that moved from the first quarter into the second quarter.
“As we head into the important holiday season, the positive trends we are seeing across all three of our business segments, combined with the many innovative merchandising and marketing plans we have in place, position us to drive strong results for the fiscal second quarter. As such, we are poised to deliver another year of revenue and earnings growth to drive shareholder value.”
For the first quarter of 2017, revenues grew 6.3 percent to $165.8 million as compared with total revenues of $156.0 million in the prior year period. Revenue growth for the quarter was driven primarily by the Company’s Gourmet Food and Gift Baskets segment, which grew 13.3 percent compared with the prior year period. The strong growth in the Gourmet Food and Gift Baskets segment, combined with 3.1 percent revenue growth in the Company’s 1-800-Flowers.com Consumer Floral segment, more than offset slightly lower revenues in the Company’s BloomNet segment.
Gross profit margin for the quarter was 43.0 percent, a decrease of 30 basis points compared with 43.3 percent in the prior year period. This primarily reflects product mix in the Company’s Gourmet Food and Gift Baskets segment. Operating expenses as a percent of total revenues was 57.0 percent, unchanged compared with the prior year period* (*adjusted to exclude integration costs). This primarily reflected the increased revenue in the period which more than offset higher labor and insurance costs as well as increased marketing spending in preparation for the upcoming holiday season.
The combination of these factors resulted in an EBITDA loss (excluding stock-based compensation expense) of $13.3 million compared with an Adjusted EBITDA loss of $12.0 million in the prior year period. The increased loss primarily reflects higher operating expenses and marketing investments in preparation for the key, holiday period.
Net loss was $15.8 million, or $0.24 per share, compared with a net loss of $4.5 million, or $0.07 per share, in the prior year period. It is important to note that the net loss attributable to 1-800-FLOWERS.COM, Inc. and EPS for the prior year period include an after-tax benefit of $9.8 million reflecting the final settlement of the Company’s insurance claims related to the Fannie May warehouse and distribution center fire that occurred on Thanksgiving Day, 2014, partially offset by costs associated with the write down of certain foreign business assets and integration costs during the quarter. On a comparable basis, net loss attributable to 1-800-FLOWERS.COM, Inc. in the prior year period was $14.3 million, or $0.22 per share.
The Company provides selected financial results for its Consumer Floral, BloomNet and Gourmet Foods and Gift Baskets segments in the tables attached to this release and as follows:
The Company is reiterating its guidance for fiscal 2017 as follows:
EBITDA: Net income (loss) before interest, taxes, depreciation, amortization. Free Cash Flow: net cash provided by operating activities less capital expenditures. Category contribution margin: earnings before interest, taxes, depreciation and amortization, before the allocation of corporate overhead expenses. *Adjusted EBITDA excludes one-time acquisition and integration related costs incurred in the prior year period. Comparable EPS excludes the after-tax benefit of $9.8 million reflecting the final settlement of the Company’s insurance claims related to the Fannie May warehouse and distribution center fire that occurred on Thanksgiving Day 2014 partially offset by costs associated with the write down of certain foreign business assets and integration costs during the quarter. The Company presents EBITDA, Comparable EPS and Free Cash Flow because it considers such information meaningful supplemental measures of its performance and believes such information is frequently used by the investment community in the evaluation of similarly situated companies. The Company also uses EBITDA and Adjusted EBITDA as factors used to determine the total amount of incentive compensation available to be awarded to executive officers and other employees. The Company's credit agreement uses EBITDA and Adjusted EBITDA to measure compliance with covenants such as interest coverage and debt incurrence. EBITDA and Adjusted EBITDA are also used by the Company to evaluate and price potential acquisition candidates. EBITDA, Adjusted EBITDA and Free Cash Flow have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of the limitations of EBITDA and Adjusted EBITDA are: (a) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, the Company's working capital needs; (b) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the Company's debts; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and EBITDA does not reflect any cash requirements for such capital expenditures. EBITDA and Free Cash Flow should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.
1-800-FLOWERS.COM, Inc. is a leading provider of gourmet food and floral gifts for all occasions. For the past 40 years, 1-800-FLOWERS® (1-800-356-9377 or www.1800flowers.com) has been helping deliver smiles for our customers with gifts for every occasion, including fresh flowers and the finest selection of plants, gift baskets, gourmet foods, confections, candles, balloons and plush stuffed animals. As always, our 100% Smile Guarantee® backs every gift. The company’s Celebrations suite of services including Celebrations Passport Free Shipping Program, Celebrations Rewards and Celebrations Reminders, are all designed to engage with customers and deepen relationships as a one-stop destination for all celebratory and gifting occasions. In 2016, 1-800-Flowers.com was awarded Silver Stevie “e-Commerce Customer Service” Award, recognizing the company’s innovative use of online technologies and social media to service the needs of customers. In addition, 1-800-FLOWERS.COM, Inc. was recognized as one of Internet Retailer’s Top 300 B2B e-commerce companies and was also recently named in Internet Retailer’s 2016 Top Mobile 500 as one of the world’s leading mobile commerce sites. The company was included in Internet Retailer’s 2015 Top 500 for fast growing e-commerce companies. In 2015, 1-800-Flowers.com was named a winner of the “Best Companies to Work for in New York State” Award by The New York Society for Human Resource Management (NYS-SHRM). The Company’s BloomNet® international floral wire service (www.mybloomnet.net) provides a broad range of quality products and value-added services designed to help professional florists grow their businesses profitably.
The 1-800-FLOWERS.COM, Inc. “Gift Shop” also includes gourmet gifts such as premium, gift-quality fruits and other gourmet items from Harry & David® (1-877-322-1200) or www.harryanddavid.com), popcorn and specialty treats from The Popcorn Factory® (1-800-541-2676 or www.thepopcornfactory.com); cookies and baked gifts from Cheryl’s® (1-800-443-8124 or www.cheryls.com); premium chocolates and confections from Fannie May® (www.fanniemay.com and www.harrylondon.com); gift baskets and towers from 1-800- Baskets.com® (www.1800baskets.com); premium English muffins and other breakfast treats from Wolferman’s (1-800-999-1910 or www.wolfermans.com); carved fresh fruit arrangements from FruitBouquets.com (www.fruitbouquets.com); and top quality steaks and chops from Stock Yards® (www.stockyards.com). Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company’s current expectations or beliefs concerning future events and can generally be identified by the use of statements that include words such as “estimate,” “expects,” “project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “target” or similar words or phrases. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control which could cause actual results to differ materially from the results expressed or implied in the forward- looking statements, including, but are not limited to, statements regarding the Company’s expectations for: enhanced performance in its Fannie May business; its ability to continue to generate solid top and bottom-line growth in its 1-800-Flowers.com Consumer Floral business; its ability to generate strong revenue growth in its Cheryl’s, Harry & David, The Popcorn Factory and 1800Baskets businesses; its ability to continue to grow bottom-line contribution in its 1-800-Flowers and BloomNet businesses; its ability to leverage its consolidated customer database and new multi-brand website to attract and retain customers and help grow revenues; its ability to achieve its guidance for consolidated revenue growth for the full year in a range of 4-to-5 percent; its ability to achieve EBITDA growth in a range of 8-to-10 percent and EPS in a range of 5-to-10 percent; its ability to generate Free Cash Flow for the year of approximately $40 million; its ability to leverage its operating platform and reduce operating expense ratio; its ability to cost effectively acquire and retain customers; the outcome of contingencies, including legal proceedings in the normal course of business; its ability to compete against existing and new competitors; its ability to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; its ability to reduce promotional activities and achieve more efficient marketing programs; and general consumer sentiment and economic conditions that may affect levels of discretionary customer purchases of the Company’s products. The Company undertakes no obligation to publicly update any of the forward-looking statements, whether as a result of new information, future events or otherwise, made in this release or in any of its SEC filings except as may be otherwise stated by the Company. For a more detailed description of these and other risk factors, please refer to the Company’s SEC filings including the Company’s Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q. Consequently, you should not consider any such list to be a complete set of all potential risks and uncertainties.
The Company will conduct a conference call to discuss the above details and attached financial results today, Wednesday, November 2, 2016, at 11:00 a.m. (ET). The call will be “web cast” live via the Internet and can be accessed from the Investor Relations section of the 1-800-FLOWERS.COM web site at www.1800flowersinc.com A recording of the call will be posted on the Investor Relations section of the Company’s web site within two hours of the call’s completion. A telephonic replay of the call can be accessed beginning at 2:00 p.m. ET on the day of the call through November 9, 2016 at: 1-877-344-7529 or 1-412-317-0088 (international) or 1-855-669-9658 (Canada); Conference ID: 10095323.
Note: Attached tables are an integral part of this press release without which the information presented in this press release should be considered incomplete.
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SOURCE 1-800-FLOWERS.COM, Inc.
Joseph D. Pititto
For 1-800-FLOWERS.COM, Inc.
Investor Relations
516-237-6131
invest@1800flowers.com
Yanique Woodall
Media Relations
516-237-6028
ywoodall@1800flowers.com