Web sales drop for 1-800-Flowers.com in fiscal 2009

Cost-cutting measures will save the company $50 million in the next fiscal year, but it was still a tough fourth quarter and fiscal 2009 for 1-800-Flowers.com Inc.

For the fourth quarter of fiscal 2009 ended June 30, 1-800-Flowers.com reports:

• A year-over-year decline in e-commerce revenue of 10.5% to $138.1 million from $154.3 million.
• Total revenue decreased 7.7% to $172.5 million from $186.9 million.
• The web accounted for 80.1% of total revenue compared with 82.6% in the prior year.
• Net loss was $22.2 million compared with net income of $4.3 million in Q4 of fiscal 2008.
• Consumer floral sales decreased year over year 13.4% to $129 million from $149 million.
• Sales for the BloomNet Wire Service increased year over year 3.9% to $16.1 million from $15.5 million.
• Gourmet gifts and gift basket sales increased 21.8% to $27.9 million from $22.9 million.
• In Q4 of fiscal 2009, 1-800-Flowers.com processed 1.8 million online orders, including 1.09 million orders, or 60.6%, from repeat customers.

“During fiscal 2009, the retail sector was characterized by a dramatic reduction in consumer demand reflecting the unprecedented economic turmoil throughout the world,” says Jim McCann, CEO of 1-800-Flowers.com Inc., No. 31 in the Internet Retailer Top 500 Guide. “While these conditions resulted in revenues and gross profit margin below our expectations, we generated positive adjusted EPS from continuing operations and more than $36 million in adjusted EBITDA from continuing operations for the year. This reflects the success of our operating expense reduction programs as well as the contributions from our recent acquisitions.” EPS stands for earnings per share. EBITDA stands for earnings before interest, taxes, depreciation and amortization.

For fiscal 2009, financial results for 1-800-Flowers.com include:

• A year-over-year decline in e-commerce revenue of 14.7% to $498.5 million from $584.1 million.
• Total revenue decreased 3.4% to $714.0 million from $739.2 million.
• The web accounted for 69.8% of total revenue compared with 79.1% in the prior year.
• Net loss was $98.4 million compared with net income of $21.0 million in fiscal 2008.
• Consumer floral sales decreased year over year 15.6% to $414.9 million from $491.7 million.
• Sales for the BloomNet Wire Service increased year over year 19.4% to $63.9 million from $53.5 million.
• Gourmet gifts and gift basket sales increased 22.4% to $240.2 million from $196.3 million.
• In fiscal 2009, 1-800-Flowers.com processed five million online orders, including 2.6 million, or 52%, from repeat customers.

To cut costs in fiscal 2009, 1-800-Flowers.com reduced its full-time staff by 15%, downsized its home and children’s gift business and consolidated some information technology and customer service infrastructure. "As a result of all these initiatives, we believe we have positioned our company to weather the current economic environment and to generate improved bottom line results in fiscal 2010," says McCann. “Should the economy improve, and consumers begin to increase their level of gift spending, we are positioned to drive further enhancements to our overall growth and profitability."

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