Reporting its results for Fiscal 2020 third quarter ending March 29, 2020, CEO Chris McCann said: “Our solid results for the fiscal third quarter reflect the continuation of the momentum we saw throughout the first half of our fiscal year. Strong consolidated revenue growth of 12.2% was driven by increases across all three of our business segments. In our Gourmet Foods and Gift Baskets segment, revenues increased 27.1%, reflecting continuing positive trends in everyday gifting occasions and increased self-consumption as well as contributions from Shari’s Berries, which we acquired in August 2019.”
McCann said that in response to the global coronavirus pandemic, 1-800-FLOWERS.COM has taken necessary actions to ensure employee safety and business continuity, informed by local and federal guidelines.
“These initiatives include developing a ‘Pandemic Preparedness and Response Plan,’ establishing an internal ‘nerve center’ to allow for unobstructed communication and coordination throughout the business, designing workstream teams to promote workforce protection and supply chain management, and dedicating resources to support customers, franchisees, and florists,” he said.
Fiscal 2020 Third Quarter Results
The strong performance was driven by net revenue growth in all three business segments, with Gourmet Foods and Gift Baskets up 27.1%, Consumer Floral up 5.4%, and BloomNet up 7.9% compared to the prior year period.
Gross profit margin for the quarter was 38.5%, a decrease of 80 basis points compared with gross profit margin of 39.3% in the prior year period. Operating expenses as a percent of total revenues were 42.4%, an improvement of 270 basis points compared with 45.1% in the prior year period. Excluding the impacts of the company’s non-qualified deferred 401k compensation plan and costs associated with its planned acquisition of PersonalizationMall.com, operating expenses, as a percentage of total revenues, were 43.1% compared with 44.6% in the prior year.
Strong top-line growth
Strong top-line growth and improved operating efficiency resulted in an Adjusted EBITDA1 loss of $2.4m compared with an Adjusted EBITDA1 loss of $4.4m in the prior year period. Net loss for the quarter was $9.7m, or loss of $0.15 per share. Excluding certain transaction costs, net loss for the quarter was $9.0m, or a loss of $0.14 per share, compared with a net loss of $8.2m, or loss of $0.13 per share, in the prior year period.
“In both Consumer Floral and BloomNet, top and bottom-line results for the quarter would have been even stronger were it not for softer consumer demand in the last few weeks of March related to the impact of the Covid-19 crisis. We saw this pattern reverse as we entered our current fiscal fourth quarter and demand has increased significantly as consumers are increasingly turning to the 1-800-Flowers brand to help them express themselves and stay connected,” McCann said.