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HARRY & DAVID 1-800Flowers.com reports $10.5 million loss in third quarter Comment By Greg Stiles Mail Tribune MailTribune.com By Greg Stiles Mail Tribune Posted Apr. 28, 2015 at 8:11 AM Updated Apr 28, 2015 at 4:48 PM By Greg Stiles Mail Tribune Posted Apr. 28, 2015 at 8:11 AM Updated Apr 28, 2015 at 4:48 PM » Social News The financial impact Harry & David brings during its heavy selling season can deliver a whopper of a counter-punch as well. The Medford-based gourmet food and gift company acquired by 1-800-Flowers.com in September 2014 provided a significant boost to the Long Island-based firm during the highly profitable fiscal second quarter. But the seasonal strain of Harry & David's expansive operations showed it can cut into the bottom line as well as build it. 1-800Flowers.com Tuesday reported a fiscal third quarter loss of $10.5 million, or 16 cents per share, compared with a net loss of $1.4 million, or 2 cents per share, a year earlier. The florist and gift shop said revenue grew 29.3 percent to $232.2 million for the period ending March 29, up from $179.6 million a year ago. The company said the increased revenue primarily reflected contributions from Harry & David. Harry & David operating expenses, however, helped nudge 1-800Flowers' operating expense ratio to 48 percent from 42.6 percent. “During the fiscal third quarter, we saw solid performance across all of our business segments while facing a number of headwinds, most notably the significant seasonality of the Harry & David business, the Saturday placement of the Valentine holiday and the lingering impacts of the Thanksgiving Day fire on our Fannie May Fine Chocolates business," CEO Jim McCann told investors and analysts. "Regarding Harry & David, during the third quarter, while the business generated an anticipated loss, we were pleased to see year-over-year improvements in both top- and bottom-line results. As we continue our integration of Harry & David, we plan to build on this by leveraging our business platform, our growing family of gift brands and the millions of customers we serve across all of our business channels.” The company's gourmet food and gift baskets division produced revenue of $93 million, up from $35.3 million a year earlier. Harry & David was the primary driver in the increase, the company said. Even so, operating costs throughout the segment resulted in a $5.4 million loss, including a $4.9 million loss by Harry & David. The good news is that the Medford operation narrowed its losses from a year ago, and some of the expenses during the quarter were severance payments following the departure of four of its top executives. McCann said 1-800-Flowers benefited from Harry & David's freight and logistics capabilities and is picking up on additional business-to-business and wholesale opportunities. He said that Harry & David items quickly gained customer preference in its Sympathy Collection offerings. The CEO said he saw nothing that would derail Harry & David's long-term contribution to 1-800-Flowers. "The overall trend lines are good for us," McCann said. "Harry & David is clearly a seasonal business. That's one reason why it took 12 years to pull the trigger on the acquisition. Now we see the opportunity to grow the business in the second fiscal quarter during the holidays." Shares of 1-800-Flowers.com traded $1.17 higher Tuesday, closing at $12.01. Reach reporter Greg Stiles at 541-776-4463 or [email protected] . Follow him on Twitter at www.twitter.com/GregMTBusiness , on Facebook at https://www.facebook.com/greg.stiles.31 , and read his blog at www.mailtribune.com/ Economic Edge . By Greg Stiles Mail Tribune MailTribune.com By Greg Stiles Mail Tribune Posted Apr. 28, 2015 at 8:11 AM Updated Apr 28, 2015 at 4:48 PM » Comment or view comments Reader Reaction » STAY INFORMED Email NewsLetter Sign Up Today Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. Southern Oregon Directory Featured Businesses Loading... 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