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Oregon Road Conditions & Cams Advertisement Email Story to a Friend May 5, 2006 Harry & David blames sales decline on late Easter Net sales fell $9.1 million, or 8.8 percent, over the same period in 2005 By John Darling for the Mail Tribune Executives with Harry & David Holdings Inc. blamed a late Easter for an 8.8 percent drop in the Medford-based specialty retailer's third-quarter sales, as compared to last year. The holiday fell in the fourth quarter this fiscal year. Bad weather also was a factor. Net sales for the quarter were $94.6 million, down $9.1 million from the $103.7 million for the same quarter last fiscal year, said Harry & David Chief Executive Officer and President Bill Williams, in a Thursday conference call with finance reporters and investment analysts. Sales in direct marketing roses in Jackson & Perkins, a Harry & David subsidiary, also fell, contributing to the quarter's decline. The corporation's earnings before net interest expense, income taxes, depreciation and amortization EBITDA finished the quarter with a loss of $18.6 million, compared to a $13 million loss for the same quarter last year. This decrease is because of lower sales, including holiday gift card redemptions, delivery discounts and product markdowns. The loss before taxes was $28.9 million compared with a loss of $35.3 million in the same quarter last fiscal year, according the firm's report. Advertisement With regard to plans for becoming a publicly traded company as proposed last year, the still-private company is "not looking at it at the moment" but is "still looking at the market," said Williams. He said, "The first quarter 2006-07 results for our company may affect that conversation" but market trends through the end of the year would be the significant element in the decision. He added that "we have not pulled our filing." Harry & David has been making regular quarterly financial reports as if it were a publicly traded company in preparation for a possible initial public offering IPO of stock. In response to increased materials costs, normal inflation and fuel surcharges and delivery charges, the firm increased its product and shipment prices, Williams said. In an interview later, Williams said Securities and Exchange Commission rules greatly limit what he can say as "forward looking statements," but "there has been a good customer acceptance" of the price increases and "we see a lot of favorable trends in our profit margin" and third-quarter sales were "better than expected." Easter this year was one of the latest ever in a fiscal year, but Williams said the firm resolves the "timing problem" by averaging March and April. Although unable to discuss trends in the present quarter, Williams said in prepared remarks, "We are encouraged by the preliminary trends in our core business, particularly with our performance during the recent Easter holiday, although the full impact of these initiatives is not expected to be felt until fiscal 2007." The report noted that the gross profit margin was 23.4 percent for the quarter against 32.9 percent for the same quarter last year. The decrease was mainly because of the buildup of rose inventory in Jackson & Perkins with a "weaker than anticipated demand." The firm's direct marketing sales, which include Internet, catalog, telemarketing and business-to-business sales, were $45.5 million, down 8.6 percent from the same period a year ago, this also due to the late Easter, the report said. Harry & David stores had a net sales drop of 6.6 percent to $21.4 million because it closed 12 stores leaving 129 stores still running. March was the 28th consecutive month of positive store sales, after adjusting for the late Easter, the report said. Jackson & Perkins' net sales dropped 19 percent to $23.5 million, mainly because of changes in the catalog and its later publication, a move made to offer more selections by cross-promoting products, the report noted. This decreased advertising costs and upped order sizes, but still brought fewer orders this spring, especially in roses. The late Easter and poor weather also contributed to the decline. Mail Tribune Home | Local News | Sports | Business | Obituaries | Life | Opinion AP News | Archives | Site Map | Community | Classified Copyright © 1997-2006 Mail Tribune, Inc. All rights reserved. Privacy Policy | Terms & Conditions | Website Feedback www.bingo.com Home Security Systems Trunks, Footlocker Custom Build Computers Discount Hotel Reservations online casinos news Ashley Furniture HomeStore Send Flowers Southern Oregon Loans California Casinos GMAT Prep Windermere Van Vleet Sports Equipment Online Casino Reviews Online Bingo Entertainment Guide Online Casino Fundraisers Sudoku Online Casinos Canada Online Pharmacy Advertisements Advertisement