Harry & David Holdings, Inc. reported a 15.5% decrease in its 2009 second-quarter net sales to $307.7 million.
The decline was due, in part, to lower product demand in the fruit-and-gift marketer’s direct channel and decreased store traffic during the 13-week period that ended Dec. 27, 2008. Later Fruit-of-the-Month club shipments also had an impact.
Gross profit margin fell almost 7 percentage points to 47.6%. This was caused by increased markdowns and discounts, including delivery discounts. Inventory write-offs, the Medford, OR firm reported.
“In the second fiscal quarter, we experienced the most challenging consumer economic and market conditions in many decades," said CEO Bill Williams in a statement.
He added: "While we are disappointed with our operating performance, we have taken numerous actions to maximize sales and profits through competitive promotional pricing, reducing operating and capital expenditures.”
The numbers reflect the firm’s divestiture of its Jackson & Perkins business in 2007 and the accusation last year of Wolferman’s and Cushman’s Fruit Company.
Selling, general and administrative expenses hit $105 million, compared with $86.7 million during the prior year, the company said. This increase was due to a $15 million no-cash charge related, in part, to the Wolferman’s and Cushman’s Fruit Company acquisitions.
Pre-tax income from continuing operations hit $48.4 million, compared with $103.8 million for the same period last year.
Net sales for the first two quarters of 2009 totaled $360.3 million, a 14.1% decline from the same period fiscal 2008.
