CARLE PLACE, N.Y. - May 02, 2017 - (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 third quarter ended April 2, 2017.
Chris McCann, CEO of 1-800-FLOWERS.COM, Inc., said, “During the fiscal third quarter, we achieved strong performance in our Consumer Floral and BloomNet segments. Revenues for the 1-800-Flowers.com brand increased more than 10 percent and contribution margin increased more than 15 percent. BloomNet also achieved solid revenue growth, up 7 percent for the period, along with 6 percent growth in its bottom-line contribution. These results illustrate the leverage in our business model as well as our focus on efficient marketing and merchandising programs combined with truly original product offerings.”
McCann said that both the Consumer Floral and BloomNet segments benefited from the shift of the Valentine holiday to a Tuesday day placement this year. “In our floral businesses, we more than offset the impact of the Easter shift by continuing to drive strong growth in our everyday gifting business and maximizing the benefit of the weekday placement for the Valentine holiday. However, the later Easter date this year moved significant revenues out of the third quarter in our Gourmet Food and Gift Baskets segment. Combined with the timing of some Harry & David revenues, this impacted both top and bottom line results for the quarter.”
McCann noted that the impact of the Easter shift was anticipated and said the Company has already recaptured the revenues associated with the date shift in its current fiscal fourth quarter. “In addition to recapturing the Easter revenues, during the fourth quarter our Gourmet Foods and Gift Baskets segment will benefit from the timing of some Harry & David Fruit-Of-The-Month Club™ shipments. Combined with the continuing positive trends in Consumer Floral and BloomNet, we anticipate achieving solid top and bottom-line growth across all three of our business segments for the fiscal fourth quarter.”
For the third quarter of 2017, revenues were essentially unchanged at $233.7 million, compared with total revenues of $234.2 million in the prior year period. This reflects lower year-over-year revenues in the Company’s Gourmet Food and Gift Baskets segment due primarily to the impact of the Easter holiday shifting into the Company’s fiscal fourth quarter this year. This impact was largely offset by strong revenue growth in the Company’s Consumer Floral and BloomNet segments which grew 10.2 percent and 7.0 percent, respectively, compared with the prior year period.
Gross profit margin for the quarter was 40.0 percent, a decrease of 130 basis points compared with 41.3 percent in the prior year period. This primarily reflects lower gross margin in the Company’s Gourmet Food and Gift Baskets segments, due largely to the shift of the Easter holiday. Operating expenses, excluding depreciation and amortization, as a percent of total revenues improved 30 basis points to 43.4 percent, compared with 43.7 percent in the prior year period.
The combination of these factors resulted in an EBITDA loss (excluding stock-based compensation expense) of $6.5 million compared with an EBITDA loss of $4.0 million in the prior year period. Net loss was $11.1 million, or $0.17 per share, compared with a net loss of $9.1 million, or $0.14 per share, in the prior year period.
Regarding customer metrics for the quarter, the Company attracted 881,000 new customers. Approximately 1.9 million customers placed orders during the quarter, of which 53.4 percent were repeat customers. This reflects the Company’s effective marketing and merchandising programs, including initiatives in social and mobile communication channels and its Celebrations suite of services – Celebrations Passport, Celebrations Rewards and Celebrations Reminders – all designed to engage and deepen its relationships with its customers.
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:
Note: On March 15, 2017, the Company announced the signing of a definitive agreement to sell its Fannie May Confections Brands business to Ferrero International for $115.0 million. Closing for this transaction is anticipated to be at the end of May. The Company’s current guidance for fiscal 2017 does not reflect the pending sale.
Definitions:
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. 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, Tuesday, May 2, 2017 at 11:00 a.m. (EDT). 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. EDT on the day of the call through May 9, 2017 at: 1-877-344-7529 or 1-412-317-0088 (international) or 1-855-669-9658 (Canada); Conference ID: 10105202.
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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Joseph D. Pititto
1-800-FLOWERS.COM, Inc.
Investor Relations
516-237-6131
invest@1800flowers.com
Yanique Woodall
1-800-FLOWERS.COM, Inc.
Media Relations
516-237-6028
ywoodall@1800flowers.com
SOURCE 1-800-FLOWERS.COM, Inc.