April 24, 2002, 12:00 AM

Cross-channel strategy drives sales, squeaks out a profit at 1-800-Flowers

With a strong technology platform in place, the floral and gift retailer will look to operating efficiencies to increase bottom-line performance.

 

A strong cross-channel strategy drove record sales of $115.4 million at 1-800-Flowers.com in its third fiscal quarter, with combined telephone and web sales accounting for $107.7 million. Total revenues rose 11.8% for the quarter from $103.2 million a year ago, and combined web and phone sales rose 12.3% from $95.8 million a year earlier. For the quarter, the company posted net income of $165,000, compared with a loss of $8.5 million the previous year.

Online sales’ contribution to revenue is pulling even with phone sales, rising 20.7% to $56.9 million and representing 49.3% of total net revenues for the quarter, compared with $47.1 million, or 45.7% a year ago. Telephone sales rose at the slower rate of 4.3% to $50.7 million for the quarter, compared with $48.6 million in the third fiscal quarter of last year.

The 408,000 new customers who placed web orders accounted for well over half--58%--of the 700,000 new customers who bought from 1-800-Flowers.com during the quarter. A total of 1.4 million customers placed orders across all channels in the quarter. Some 230,000 of them placed multiple orders during the quarter, many using both telephone and web. 1-800-Flowers.com’s expansion beyond flowers into higher-margin gift items appears to be paying off. In its third quarter, which included the traditionally floral-focused Valentine’s Day holiday, non-floral gifts rose to account for 34.3% of combined phone and web sales, up from 30.8% in the year-ago quarter.

CEO Jim McCann says the company will look beyond pursuing top-line growth for operating efficiencies to improve bottom-line performance in what he termed “a challenging retail environment. Combined with revenue growth, we continue to leverage our brand and infrastructure, particularly our robust technology platform and unique distribution system, to drive down operating expenses and enhance bottom-line profitability,” he says.

 

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