1-800 Flowers was profitable during the fourth quarter, thanks to an 8% increase in revenue, and various channel and product shifts.
The company reported fourth-quarter net income of $226,000 compared with a $12.9 million loss during the same quarter last year. Revenue rose to $132.3 million for the quarter, which ended July 1.
Included during the quarter were the major gift-giving holidays of Easter, Mother’s Day and Administrative Professionals Week.
In addition, the firm’s gross profit margin rose to 39.8%, compared with 37.9% in the fourth quarter last year. Combined online and telephonic sales rose by 9.1% to $124.3 million.
Revenue was adjusted to reflect an additional week of selling in the fourth quarter of fiscal 2000.
The firm’s gross profit margin rose to 39.8%, compared with 37.9% in the fourth quarter last year. EBITDA hit the $6.4 million mark, an improvement over the $9.2 million loss reported for the same quarter last year.
Full-year revenue increased 16.5% to $442 million. The fiscal year also ended on July 1.
Online sales rose by 33% to $62.7 million during the quarter, constituting 47.4% of total net revenue, compared with 38.7% last year. Telephone revenue dropped by 7.8% to $61.6 million.
In addition, 36% of all online and telephone sales came from non-floral products, which have higher gross margins.
The firm hopes to achieve a 50/50 split between online and telephone sales, and floral and non-floral products, during the next fiscal year.
Also driving the return to profitability was a reduction in the average customer acquisition cost. It fell to $16.88, compared with $23.34 during the same period last year.
Despite that, the firm added new 830,000 customers during the fourth quarter, and 3 million for the 2000 year, which also ended on July 1. Roughly new 460,000 online customers also came on board during the quarter.
Roughly 2 million people purchased during the quarter, 46.7% of whom were repeat customers (compared with 44% last year). And 290,000 placed multiple orders.
Meanwhile, the Westbury, NY firm expects revenue growth of up to 20% during the 2002 fiscal year. This will conclude an estimated contribution of $25 million from the children’s gifts business recently acquired by 1-800-flowers.
The first quarter of fiscal 2002 will produce an EBITDA loss of $6 million to $7 million, the firm predicted. This is due to the fact that there are no major gift-giving holidays during the period. But positive EBITDA should return in the remaining quarters.
“Looking out to fiscal 2003, we believe we can continue to leverage our proven business model,” said CEO Jim McCann in a statement. “We believe we can achieve an organic revenue growth rate in the mid-teens and, most important in terms of building long-term shareholder value, EBITDA growth in excess of 100% year-over-year.”
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