Higher search marketing costs hinder holiday sales at FTD

Hindered by higher search engine marketing costs and other factors, FTD Group Inc. reported a 4% decrease in consumer holiday orders.

"While October and November order volume growth was within management`s expectations, we experienced a highly competitive Christmas season within our consumer business segment,” says CEO Michael J. Soenen. “During the Christmas season, certain online search engine costs increased significantly over the prior year and we made the decision not to pursue the resulting high-cost order volume."

As the direct result of a disappointing holiday season, FTD says it will lower its sales guidance for fiscal 2006 to approximately $460 million from an earlier forecast of $480 million. FTD, No. 44 in the Internet Retailer Top 400 Guide to Retail Web Sites, still expects net income for fiscal 2006 to be approximately $23 million.

“We have begun making additional investments in our marketing staff to help build a more diversified marketing portfolio,” Soenen says. “We believe these initiatives will enable us to regain our competitive position in the marketplace and continue to deliver long-term bottom line results for our shareholders."