1-800-FLOWERS.COM Reports Online Revenues Rise 88
Percent in Fiscal 2000 First Quarter
Total Revenues Increase 22 Percent to a Record $58.1 Million
WESTBURY, N.Y.--(BUSINESS WIRE)--Oct. 27, 1999--1-800-FLOWERS.COM (Nasdaq: FLWS),
a leading e-commerce provider of flowers and gift products, and a highly recognized brand, today
announced financial results for the fiscal 2000 first quarter ended September 26, 1999. The
Company reported $58.1 million in total net revenues for the first quarter, representing an increase
of 22.1 percent compared with revenues of $47.6 million in the same period a year ago. Revenues
derived from the Company's online sales channel increased 88.1 percent to $11.8 million (20.3
percent of total net revenues) compared with $6.3 million (13.2 percent) in the prior year period.
Telephonic revenues increased 9.5 percent to $37.6 (64.7 percent) compared with $34.4 million
(72.2 percent) in last year's first quarter.
The Company's fiscal first quarter is typically its least significant in terms of revenues as it includes
the slower summer months and fewer gift-related holidays. Despite this seasonal effect, the
Company was able to increase its total customer base by approximately 487,000 to more than 8.3
million unique customers from 7.8 million at the end of the fiscal 1999 fourth quarter. As a result of
the Company's aggressive marketing efforts to attract more new customers to its web site, its
online customer base increased by approximately 167,000 to nearly 1.4 million.
For the first quarter of fiscal 2000, the Company reported a net loss of $(17.1) million, or $(0.31)
per share, compared with a net loss applicable to common stockholders of $(2.0) million, or
$(0.05) per share in the first quarter of fiscal 1999. The fiscal 2000 first quarter loss primarily
reflects the investments the Company made during the period in support of its growth strategy to
significantly expand its online business. These investments include expanded advertising and
marketing programs designed to enhance the Company's brand name recognition with online
shoppers, expansion of its product lines to include a broad variety of gift and gourmet items, and
the further development of its operating infrastructure and management team. Approximately $1.5
million, or $(0.03) per share, of the loss was a non-recurring charge related to the redemption of
the minority interest in a subsidiary of the Company.
Jim McCann, Chairman and CEO of 1-800-FLOWERS.COM, said "Since becoming a public
company in early August, we have made significant progress towards achieving our goal of
making 1-800-FLOWERS.COM the premier source of thoughtful gift expressions for customers
throughout the world. During our fiscal first quarter we saw a continuation of the strong revenue
and customer growth coming through our online channels. Online revenues grew 88.1 percent
compared with the prior year and, importantly, we added more than 167,000 new online customers
and 320,000 new telephonic customers to our already large and highly leverageable customer
base. We now have more than 8 million people worldwide who have chosen
1-800-FLOWERS.COM as the place to come for their thoughtful gifting expressions.
"We also continued to execute our strategy of broadening our product offering beyond floral into
gourmet food, candies and other great gifts. During the first quarter, non-floral products grew to
represent 25.1 percent of total revenue, up from 19.1 percent in the first quarter of fiscal 1999. We
expect this trend will continue as we further enhance the depth and breadth of our non-floral
offerings and customers increasingly look to us for all of their thoughtful gift giving purchases.
"Additionally, during the first quarter we significantly enhanced and expanded our online brand
presence through agreements with several leading Internet portal providers, including America
Online, Excite@Home, and Snap.com. Our new agreement with AOL, with whom we have been an
e-commerce pioneer since 1994, expands our exclusive positioning to all six of AOL's fast growing
Internet properties. These include their flagship properties America Online and AOL.com, as well
as local access provider Digital City, the popular Netscape Netcenter, rapidly expanding
CompuServe and ICQ, which offers excellent opportunities for international expansion. It's worth
noting that this new agreement provides exclusive positioning and, in several cases, displaced
competitors in the key floral and gardening categories.
"In addition to AOL, we also extended our already successful relationship with Excite@Home as a
premier sponsor providing fresh-cut flowers and related gift items on the Excite Site and
WebCrawler Site, to include our broadened variety of gifts in the gourmet, gardening, home decor,
and specialty gift categories. Our new agreement with Snap.com, where we will be featured as an
anchor tenant in their online flower shop, also offers us excellent cross-media marketing
opportunities with on-air promotions slated to run on the NBC television network. We believe this
will further enhance our dominant brand identification and drive additional customers to the
1-800-FLOWERS.COM web site.
"As consolidation within the ranks of leading portal providers continues, these new and expanded
agreements, combined with our existing relationships, give 1-800-FLOWERS.COM excellent
positioning with five of the top seven Internet "portal providers" including AOL, Excite, MSN,
Netscape, and Yahoo. These relationships are a key part of our strategy to drive more and more
customers to the 1-800-FLOWERS.COM web site for all of their thoughtful gift giving purchases."
McCann noted that as the Company enters its fiscal 2000 second quarter, which includes the
important holiday gift-giving season, "We are intensely focused on executing our growth strategy
through exceptional customer service. We believe that those companies that actually deliver on a
great consumer experience are the ones that will survive and thrive in the fast moving and highly
competitive e-commerce environment. At 1-800-FLOWERS.COM, we are uniquely positioned to
do just that. We have an established and proven fulfillment infrastructure that has demonstrated its
ability to handle the high order volumes, and increasingly high service- level expectations of online
customers, that many new e-tailing companies are only now struggling to develop. We believe this
provides us with a significant advantage which, combined with our dominant brand, large customer
base and expanded product strategy, will enable us to grow our business aggressively and
thereby build long-term value for our shareholders." |
