McCann said the Company’s BloomNet wire service continued to grow its market position during fiscal 2012, achieving double-digit revenue growth for a second consecutive year as well as more than 10 percent growth in contribution margin. “BloomNet has established itself as the growth leader in the wire service category with unsurpassed innovation in the expanded suite of products and services it offers to help professional florists grow their businesses.
“In our Gourmet Food and Gift Baskets, we achieved revenue growth for the year reflecting strong ecommerce growth in our Cheryl’s, 1-800-Baskets.com and The Popcorn Factory brands, combined with wholesale channel growth in our Fannie May Fine Chocolates business, which more than offset the loss of revenues associated with the sale of 17 Fannie May Fine Chocolate retail stores, which we completed during the second quarter of the year. The strategic store sale was part of a 62-store franchise deal that includes an additional 45 new stores to be opened over the next three years, significantly accelerating our franchising program for Fannie May. We believe these franchise stores, in addition to other franchise agreements already signed or in development, will provide significant growth opportunities in the future across ecommerce, retail and wholesale channels for the iconic Fannie May brand,” said McCann.
McCann also noted that sales and profit margins in the Company’s Gourmet Food and Gift Basket category were impacted during the fiscal year by reduced order volumes in wholesale gift baskets. “Fortunately, based on the improved demand we are now seeing from the key mass market accounts, we expect to achieve renewed growth in both revenues and contribution margin in this area in fiscal 2013,” he said.
Category Results:The Company provides selected financial results for its business categories in the tables attached to this release and as follows. Results for the fiscal 2012 full year include 52 weeks compared with 53 weeks in the prior year; results for the fiscal 2012 fourth quarter include 13 weeks compared with 14 weeks in the prior year period as well as the aforementioned impact of the shift of the Easter holiday.
- Consumer Floral: full year revenues grew $29.0 million, or 7.9 percent to $398.2 million and fourth quarter revenues grew approximately $300,000, or 0.3 percent to 124.0 million, compared with $369.2 million and $123.7 million in the respective prior year periods. Gross profit margin increased 90 basis points to 38.9 percent for the year and 90 basis points to 39.2 percent for the fourth quarter, compared with 38.0 percent and 38.3 percent in the respective prior year periods. The significant improvement in gross profit margin reflects enhanced product mix, logistics and reduced promotional marketing programs. Reflecting the higher revenues and gross margin, category contribution margin increased 19.8 percent to $39.1 million for the year and 9.8 percent to $12.2 million for the fourth quarter, compared with $32.7 million and $11.2 million in the respective prior year periods.
- BloomNet Wire Service: full year revenues increased $9.3 million, or 12.7 percent to $82.6 million and fourth quarter revenues increased approximately $400,000, or 1.9 percent to $21.7 million, compared with $73.3 million and $21.3 million in the respective prior year periods. Gross profit margin was 46.9 percent for the year and 48.2 percent for the fourth quarter, compared with 50.3 percent and 44.6 percent in the respective prior year periods. The higher gross margin in the fourth quarter reflects the normalization of gross margin percentage as the Company leverages its increasing order volumes. Category contribution margin increased 10.6 percent to $22.3 million for the year and 23.6 percent to $6.4 million for the fourth quarter, compared with $20.2 million and $5.2 million in the respective prior year periods.
- Gourmet Food and Gift Baskets: full year revenues increased 3.2 percent to $236.7 million while fourth quarter revenues declined 8.8 percent to $33.9 million reflecting the shift of the Easter holiday, compared with $229.4 million and $37.2 million in the respective prior year periods. Gross profit margin was 42.1 percent for the year and 43.6 percent for the fourth quarter, compared with 43.1 percent and 43.7 percent in the respective prior year periods. Gross profit margins for the year and fourth quarter were impacted by increased commodity costs and shipping fuel surcharges as well as product mix. Category contribution margin for the year was $26.0 million, excluding the gain on the sale of the 17 retail stores, and $600,000 for the fourth quarter, compared with $27.8 million and $1.5 million in the respective prior year periods. Category contribution margin for the year was impacted by the sale of 17 company-owned Fannie May retail stores as well as weaker performance in wholesale gift baskets, while fourth quarter contribution margin was impacted by the shift of the Easter holiday.