Fiscal third-quarter results were below expectations for 1-800-Flowers.com Inc. despite “solid growth” for Valentine’s Day, according to CEO Christopher G. McCann.

Flower and gift retailer 1-800-Flowers.com Inc. reported total net revenue for its third fiscal quarter, which ended March 27, 2022, of $469.6 million. That’s down 1.0% from $474.2 million in the prior-year period. However, revenue increased 68.4% compared with the retailer’s fiscal 2020 third quarter before the pandemic.

“Positives were offset by the shift of Easter to later in our fiscal fourth quarter this year, compared with last year, when most of the holiday sales fell in our third quarter,” McCann said, according to a Seeking Alpha transcript of the retailer’s earnings call.

He said that the retailer has “essentially doubled” in size over the past three years, with revenue now exceeding $2 billion.

1-800-Flowers.com ranks No. 59 in the 2022 Digital Commerce 360 Top 1000. It ranks first in its category (flowers/gifts).

Digital sales slow

“Slow ecommerce demand for everyday occasions throughout the quarter” reflected “growing consumer concerns with rising inflation and geopolitical unrest,” said William E. Shea, 1-800-Flowers.com’s chief financial officer

1-800-Flowers.com reported $409.777 million in ecommerce revenue for its third fiscal quarter, which ended March 27, 2022. That’s down $14.99 million from the comparable period the prior year. Ecommerce accounted for 87% of total net revenue for the flower retailer’s fiscal third quarter. Ecommerce accounted for slightly less than the comparable period a year earlier when it represented 90% of total revenue.

McCann said that the retailer brought in nearly 1.5 million new customers and added more than 225,000 new members to its loyalty program. Customers can now search for any product across the retailer’s brands through its Celebrations Passport app, he said. The app launched in January.

Shea said that the average order value increased more than 10%, but a decline in units sold offset that. A combination of pricing initiatives, selling more bundled products, and selling higher-priced items on the site led to that AOV increase. Shea also said inventory was $214.4 million, up $60 million compared with the end of fiscal 2021, to help mitigate continuing supply chain challenges.

1-800-Flowers.com reported revenue of about $1.501 billion for the nine months ended March 27, 2022. That’s a nearly $60 million increase from the comparable nine months the prior year. As with the third fiscal quarter, ecommerce accounted for 87% of the merchant’s revenue for the nine months ended March 27, 2022. That’s just below the 88% of total revenue it accounted for in the comparable nine-month period of the previous fiscal year.

Order processing

McCann said the retailer is automating more facilities. Artificial intelligence and interactive voice response have already benefited the merchant, especially on Valentine’s Day this year, he said.

“We were able to handle 30,000 customer interactions completely automated because of our AI engine powering our IVR and our chatbot capabilities,” he said. “So, it was 30,000 customer interactions completely automated. We would’ve needed a thousand more people just for that one day to handle that if we weren’t investing in automation capabilities.”

Shea said delivery times have improved, too.

“What we used to see prior to the pandemic was 98% on-time delivery,” Shea said. “Throughout the pandemic we were seeing deliveries that were in the mid-80s and some cases low 80s. We’ve seen a rebound back over 90% on-time deliveries.”

For the quarter ended March 27, 2022, 1-800-Flowers.com reported:

• Revenue declined 1% to $469.6 million from $474.2 million in the prior-year period.
• $409.777 million in ecommerce revenue, down about 3% from $424.768 million in FY 2021.

For the nine-month period ended March 27, 2022, 1-800-Flowers.com reported:

• Revenue increased about 5% to $1.722 billion million from $1.635 billion in the prior-year period.
• $1.501 billion in ecommerce revenue, up about 4% from 1.441 billion in the prior nine-month period.

Percentage changes may not align exactly with dollar figures due to rounding.

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