Sales from 1-800-Flowers.com Inc.’s Harry & David brand increased more than 5% during the first quarter of fiscal 2018, helping to generate slight gains in e-commerce and total revenue.
Also driving sales in the quarter ended Oct. 1 was “solid growth in our 1-800 Baskets and Cheryl’s brands,” chief operating officer William Shea told analysts this week on the retailer’s earnings call. 1-800-Flowers.com is No. 59 in the Internet Retailer 2017 Top 500.
E-commerce revenue grew 1.6% to $108.8 million from $107.1 million in the year-ago quarter. Total fiscal Q1 sales decreased 5.1% to $157.3 million from $165.8 million. On a comparable basis, when revenue is adjusted for the sale of the Fannie May Confection Brands business, which closed in May, total sales increased 1.8% from $154.6 million, the retailer said.
Floral sales increased nearly 2% in the quarter, “despite the impact of Hurricanes Harvey and Irma, which disrupted Texas and Florida, two of our top markets,” CEO Christopher McCann said, according to a Seeking Alpha transcript.
“Lower category contribution in this segment reflected the impact of the hurricanes, as well as increased investments we made during the first quarter in technology, analytics and research,” he said. Those investments helped the retailer increase its use of personalized messaging and targeting to drive consumers to enroll in its Celebrations Passport, the retailer’s $29.99-a-year loyalty program that gives members free shipping and no service charge for a year across the retailer’s brands, which include 1-800-Flowers, Harry & David, Cheryl’s cookies, The Popcorn Factory and Wolferman’s baked goods. In a riff on Amazon.com Inc.’s Prime Day, held July 12, 1-800-Flowers promoted “Passport Day” and offered enrollment for $19.99 a year.
Other investments include testing new digital marketing strategies in search, video, display and other areas as the holiday season approaches, McCann said, though he did not specify those tests.
Weather also cut into sales for BloomNet wire service, the retailer’s corporate sales and business-to-business unit.
“Seasonally softer sales were further impacted by the hurricanes in Texas, Florida and Puerto Rico,” McCann said. “In response to the storms, we made the decision to waive all florist fees and to provide financial aid and other assistance to our BloomNet florists in the affected areas. We are confident the BloomNet is well-positioned to recapture the loss revenue and achieve top and bottom-line growth in fiscal ‘18.”
Coming later this month is the retailer’s new chocolate marketplace, which will be a “destination for all things chocolate with extensive content and social features designed specifically for chocolate lovers,” McCann said. 1-800-Flowers retained the ability to sell Fannie May and Harry London chocolate brands and now has access to the Ferrero brand, all of which will be part of the marketplace, as will other yet-to-be-named brand, he said.
For fiscal first quarter 2018 ended Oct. 1, 1-800-Flowers reported:
- E-commerce sales of $108.8 million, up 1.6% from $107.1 million in Q1 of fiscal 2017.
- Total sales of $157.3 million, down 5.1% from $165.8 million. On a comparable basis, revenue increased 1.8% in the quarter when adjusted for the sale of Fannie May Confection Brands, which closed May 30.
- Consumer floral sales of $76.6 million, up 1.9% from $75.2 million.
- Gourmet food and gift baskets sales of $61.0 million, down 12.6% from $69.8 million. On a comparable basis, revenue in this segment increased 4.4% in the quarter when adjusted for the Fannie May sale.
- BloomNet Wire Service revenue of $19.8 million, down 5.7% from $21.0 million.
- Net loss of $13.2 million compared with a loss of $15.8 million.