1-800-Flowers.com Q4 net income rises 51% on sales growth of 13%
1-800-Flowers.com Inc. reported that net income rose to $12.2 million for its fiscal year ended June 29, compared with a net loss of $1.5 million last year, on total revenues that increased 13.8% to $565 million from $497.2 million. The revenue increase was driven largely by a sharp increase in online revenue over the previous year: online sales were up 21.6% to $265.3 million from $218.2 million. Results include the contribution of The Popcorn Factory, which the company acquired in May 2002.
For the fourth quarter, 1-800-Flowers posted net income of $8.3 million, up 51.3% from $5.5 million in the year-ago quarter. Revenues rose 10.4% to $154.8 million from a year ago. Combined Internet and telephone sales for the quarter were up 10.8% to $146.4 million over a year ago, driven in large measure by online revenues that grew 22.9% to $84.1 million.
“We’re very pleased with the strength of our fourth quarter results, particularly online revenue growth,” says CEO Jim McCann. “During our fiscal fourth quarter, we attracted more than 800,000 new customers including more than 500,000 online.” Telephone-based revenues for the quarter dropped 2.3% to $62.3 million from $63.7 million a year ago, and the migration of more customers to the online channel helped to lower the company`s order-taking costs.
McCann notes that the company has focused on reducing operating expenses, which helped drive the quarter’s gross profit margin up to almost 41%. McCann attributes the rest of the quarter’s and year’s performance to cost-effective marketing efforts and ongoing initiatives to encourage repeat orders from existing customers, as well as enhanced delivery services that increase same-day and next-day fulfillment, and an expanded offering in higher-margin non-floral gifts.
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