1-800-Flowers sees expanded gift and web hosting offerings

Will Atkinson | Aug 08, 2007 1:33pm EDT | Comment

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Floral and gift retailer 1-800-Flowers.com, Inc. (Nasdaq: FLWS) plans to boost its earnings through expanded gift and web hosting offerings, CEO James McCann said during a midday conference call.

During the first quarter of fiscal 2008 ending October 1, McCann said the company expects revenue in the range of $156.3 million to $159 million, compared with $137.1 million in the same period of 2006. Wall Street had been expecting revenue of $151.1 million.

During 2008, the company expects the first quarter to make up 14% to 16% of total sales; second quarter 35% to 37%; third quarter 24% to 26% and the fourth quarter, 24% to 26% of aggregate revenues. 1-800-Flowers expects annual earnings growth of about $0.33 per share in fiscal year 2008, from $0.26 in 2007.

For the 2008 fiscal year, that the company expects revenue growth in the range of 7% to 9%, or $836.4 million to $852 million, from $781.7 million in 2006.

McCann said the company expects sales growth in its consumer floral, BloomNet, food and fist basket segments, but anticipates flat results from its home and children’s category. He said the company is continuing to evaluate strategic options for the home and children’s business.

Before the opening bell, the flower and gift provider said its fourth-quarter profit soared to $6.6 million, or $0.10 per share, which is above analyst estimates of $0.08 per share. During the year-ago period, 1-800-Flowers recorded a profit of $1 million, or $0.02 per share. For the three-month period ended July 1, the firm’s quarterly revenue increased to $231.8 million, which is above the company’s fourth-quarter revenue of $211.1 million in 2006.

BloomNet Wire Service, a florist products and services wire service, is capturing an increasing market share, McCann said. The firm recently introduced floral selection guides, web hosting services and other store management offerings, he said. These new services are “quickly gaining acceptance among our florists,” he said. During the fourth quarter, BloomNet’s revenue increased to $14.8 million, from $9.5 million.

1-800-Flowers recently began accepting PayPal payments, eBay Inc.’s (Nasdaq: EBAY) payment processing system.

“We thought it was important to offer that to our customer base,” CFO Bill Shea said. “It’s still a very small component of our overall payment processing, but we’re seeing very nice growth.”

In answering an analyst’s question, McCann mentioned that 1-800-Flowers is not focused on growing the average customer ticket price, but instead on growing its share of customers in the marketplace.

In midday trading, shares of the small-cap company are up $0.26, or 2.83%, at $9.44. Over the last 52 weeks, shares have fluctuated between $4.35 and $10.38.