October 22, 2002, 12:00 AM

1-800-Flowers.com posts 26% increase in online sales

1-800-Flowers.com posted a 26.2% increase in online revenue and gained 494,000 new customers for the first quarter. The web now almost equals the telephone in proportion of total sales.

Kurt Peters

Executive Editor


The usually weak summer season was sweet for 1-800-Flowers.com Inc., which posted a 26.2% increase in online revenue and gained 494,000 new customers for the first quarter ended Sept. 29. Among those new customers, 270,000, or 55%, came to the company online.

First-quarter online revenues increased to $40.8 million, up from $32.2 million a year ago, while telephone-based revenues increased 3.8%, to $42.5 million from $41 million. Online revenues increased as a percent of combined online and telephone revenues to 49% from 44.1%. The company said repeat customers represented 56% of online and telephone orders, compared with 53.6 % last year.

The company also said it increased its gross profit margin to 41.1% from 39.5% a year ago, due to increased demand for higher-margin non-floral gifts along with improved operating efficiencies and customer service.

“We were able to achieve solid growth in what is traditionally our lowest revenue quarter, despite continued weakness in the overall retail economy,” said CEO Jim McCann.

McCann said the Q1 performance was also significant because the company incurred during the quarter a loss of about $1.5 million related to its acquisition in May of The Popcorn Factory. 1-800-Flowers has since upgraded and integrated The Popcorn Factory’s web site into its own network, and “this positions us well for the upcoming Halloween holiday and the start of what we expect to be a strong holiday selling season to both retail consumers and corporate accounts,” McCann said.

The company said it narrowed its net loss for the quarter to $7.3 million, down from $8.9 million in the year-ago period.



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