Online revenues grow 20% to ring up record Q2 revenues at 1-800-Flowers
Driven largely by online revenue growth of 20% year over year, 1-800-Flowers.com reported revenues of $213.2 million for its second quarter ended Dec. 28, which represented an 8% gain over the year-ago quarter’s revenues of $197.4 million.
Net income for the quarter was $13.7 million compared with $10.1 million a year ago. Gross profit margin dropped to 44.9% from 45.9%, which the company attributes to sales of high-margin home décor gift items that came in below expectations. However, the drop was offset by improvement in its operating expense ratio, which declined 220 basis points to 38.3%
Online sales were $90.9 million compared with $75.8 million in the second quarter of 2002. At $113.4 million, telephone sales were flat compared with last year`s $114 million, reflecting customers’ increased use of the online channel. “We are pleased with our ability to grow our organic business by a solid 8% during the recent holiday quarter. Importantly, this growth was driven by our online channel,” says CEO Jim McCann. “Also, we achieved double-digit growth in all of the gift product areas that we have identified as our primary growth areas for the future, including our expanded food-gift offering, gift baskets and fit packs, unique children’s gifts and flowers.” McCann adds that the company will continue to focus on growing its bottom-line metrics at a rate higher than sales growth.
1-800-Flowers.com attracted 1.2 million new customers in the second quarter, of which 48% came to the company online. Some 2.3 million customers placed orders during the quarter, of which 48.6% were repeat customers, up from 46.9% in the year-ago quarter. The company notes that customers continue to respond to its expanding non-floral gift offering, with such purchases representing 66% of combined telephone and online sales for the quarter, compared with 67% last year.
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