1-800-Flowers Lifted by Holiday Sales

Wall Street investors bumped 1-800-Flowers.com (Nasdaq: FLWS) up 19 cents to $5.88 in early trading Wednesday, after the company said strong holiday sales led to a solid second quarter, ended December 31st, of fiscal 2001.

The e-tailer repeated its goal of achieving 18 to 20 percent revenue growth in the second half of the fiscal year, with a profit before extraordinary items in the final quarter.

The company, unlike e-tailers in other industries, has several strong holiday shopping periods, such as Valentine's Day, Mother's Day and graduation time.

A combination of higher gross profit margin and reduced operating expenses led to a 40 percent narrowing in the company's net loss in the second quarter -- to $10.5 million, or 16 cents per share, from $17.5 million, or 28 cents, in the same period a year earlier.

Revenue for the quarter rose 19 percent from a year earlier to $134.2 million, led by a 68.8 percent jump in online sales. Gross margin increased to 41 percent from 39 percent.

The company attributed the improvement to strong demand for higher-margin, non-flower products, and to the absence of last year's "aggressive promotional discounting."

Online traffic rose 75 percent from a year earlier, helping attract 964,000 new customers for a total of more than 10 million.

About 1.6 million customers placed orders during the quarter, 40 percent of them repeat customers, 1-800-Flowers.com said. The company sells flowers over the Internet, as well as by telephone order.