1-800-Flowers.com to report Q2 revenues are up, but below expectations
Driven by strong December sales, 1-800-Flowers.com says it expects to report second quarter revenues up by 8% over a year ago to $230 million. Online sales are expected to be up by 18%, while revenues from telephone sales are expected to decline slightly for the quarter as more phone customers switch to the online channel. 1-800-Flowers.com says that it expects earnings for Q2 to fall below management’s expectations, although higher than last year’s second quarter on a comparative, tax-adjusted basis, as online and offline investment to drive sales offsets revenue gains. The company expects to issue full results for the quarter on Jan. 18.
Demand increased in December as customers continue to shop later and later in the holiday season, says CEO Jim McCann, driving double-digit growth for the month in key holiday categories including gourmet food gifts, gift baskets and children’s gifts. “Customer shopping patterns confirmed our marketing strategy, which included shifting a significant portion of our efforts — online advertising, offline broadcast advertising and direct marketing programs — to later in the year,” says McCann.
In December, the company’s home and garden gift category grew by 11%, reversing an earlier negative sales trend. For the full second quarter, the company expects to report category growth of 2%. McCann says the company’s business gift services group achieved strong results in acquiring new accounts and in increasing sales of the company’s expanded offering in gourmet food and gift baskets.
McCann adds that the company has stepped up marketing investments, particularly in search and affiliate marketing, as well as direct marketing and broadcast advertising programs. “Our increased spending here reflects both our strategy to become more aggressive in terms of customer acquisition, positioning us for stronger growth over the long term, as well as a response to the increasingly competitive marketplace particularly in our core floral gift category,” he says.
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