January 24, 2007, 12:00 AM

1-800-Flowers.com posts record second-quarter sales of $329.9 million

Total revenues for the quarter were up 18.7% from a year ago. Net income for the quarter increased 63.7% to $16.9 million from $10.3 million in its fiscal Q2 2006.

Kurt Peters

Executive Editor

Total revenues at 1-800-Flowers.com were a record $329.9 million for the 2007 fiscal year second quarter, ended Dec. 31, 2006, up 18.7% from $277.8 million a year earlier. Net income for the quarter increased 63.7% to $16.9 million from $10.3 million a year ago.

For the first half, the company, which is No. 35 in the Internet Retailer Top 500 Guide, posted net income of $9.5 million. First-half net revenue of $467 million was up 19.6% from the year-ago period. The lower net income for the first half than for the quarter reflected a $7.4 million net loss for its FY Q1, which the company had attributed to costs associated with its May 2006 acquisition of Fannie May Confections brands.

During the quarter, more than 2.6 million customers placed orders online, of which 53% were repeat customers. The company attributes the repeat customer rate to efforts to expand gift offerings and services such as its floral category Fresh Rewards loyalty program. 1.2 million new customers made purchases during the quarter, including 780,000 who came in online. “Customers continue to be attracted by the strength of our brands, as well as our expanded offering of products and services that help them connect with the important people in their lives,” says CEO Jim McCann.

McCann will give a keynote address, The Web: Powering the Reinvention of Retailing,” at the Internet Retailer Conference & Exhibition, June 4-7 in San Jose.

Boosting the second-quarter numbers were double-digit growth in its key consumer flower sales, BloomNet wire service and gourmet food and gift basket business categories, which offset lower year-over-year sales in the home and children’s gift categories. Results included the contribution of Fannie May Confections brand, which was acquired in May 2006.

Consumer floral sales for the quarter increased 10.9% to $114.6 million from $103.3 million a year ago. Revenues from BloomNet increased 45.5% to $9.6 million from $6.6 million a year ago. For the gourmet food and gift basket category, revenues were up 74.6% to $108.9 million from $62.4 million in the year-ago period. Home and children’s gift sales declined 7.7% to $98 million from $106.2 million in fiscal Q2 2006.



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