1-800-Flowers.com, Inc. (FLWS
Q2 2010 Earnings Call Transcript
January 28, 2010 11:00 a.m. ET
Joseph D. Pititto – Vice President, Investor Relations
James Francis McCann – Chief Executive Officer
William E. Shea – Chief Financial Officer
Christopher G. McCann – President
Ingrid Chung – Goldman Sachs
Jeffrey Stein – Soleil Securities
Ronald Bookbinder – Global Hunter Securities, LLC
Jennifer Sung – Brean Murray, Carrett & Company
Anthony Lebiedzinski – Sidoti & Company
Akash Ghiya – Pine Cobble Capital
Good day, everyone and welcome to the 1-800-FLOWERS.COM Fiscal 2010 Second Quarter Results Conference Call. This call is being recorded. At this time, for opening remarks and introduction, I would like to turn the call over to the company''s Vice President of Investor Relations, Joseph Pititto. Please go ahead, sir.
Joseph D. Pititto
Thank you, Juan (ph). Good morning and thank you all for joining us today to discuss 1-800-FLOWERS.COM''s financial results for our fiscal 2010 second quarter. For those of you who have not received a copy of our press release issued earlier this morning, the release can be accessed at the Investor Relations section of our website at 1-800-FLOWERS.COM, or you can call Patty Altadonna at 516-237-6113 to receive a copy of the release by email or fax.
In terms of structure, our call today will begin with brief formal remarks and then, we will open the call your questions. Presenting today will be Jim McCann, CEO, Chris McCann, President and Bill Shea, CFO.
Before we begin, I need to remind everyone that a number of the statements that we will make today may be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. For a detailed description of these risks and uncertainties, please refer to our press release issued this morning, as well as our SEC filings, including the company''s Annual Report on Form 10-K and quarterly reports on Form 10-Q.
In addition, this morning we will discuss certain supplemental financial measures that are not prepared in accordance with Generally Accepted Accounting Principles. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in the tables accompanying the company''s press release issued this morning. The company''s expressly disclaims any intent or obligation to update any of the forward-looking statements made in today''s call, any recordings of today''s call, the press release issued earlier today, or in any of the SEC filings except as may be otherwise stated by the company.
I''ll now turn the call over to Jim McCann.
James Francis McCann
Good morning, everyone. Our fiscal second quarter results, including the year-end holiday period were in line with guidance we provided going into the quarter and with our expectations. While our revenue for the period was somewhat softer than we would have liked, this reflected lower wholesale orders in the mass market channel by as well as continued cautious spending by consumers.
As we told you in our conference call back in October, we went into the fiscal second quarter with a focus on improving our gross profit margins and leveraging our business platform to reduce operating expenses. Bill will provide you with details, but I can tell you that we are pleased -- thank you -- Bill will provide you with details, but I can tell you that we are pleased with our results both in terms of our increased gross profit margin in each of our business categories and we reduced our consolidated operating expenses significantly.
In addition, we generated free cash flow of $29 million for the first six months of our fiscal year. This reflected the combination of our improved operating efficiencies, strong inventory management and our strategy reduced capital expenditures. Combined with the cash proceeds we received from the sale of our Home and Children''s Gifts business, which we completed earlier this week, we further strengthened our balance sheet.
In a moment, Bill will take you through the metrics of the quarter and Chris will provide some additional details regarding our operational initiatives. But before I turn the call over to them, I''d like to point out a few of the things we can -- that we believe position our company for future growth.
We continue to focus on the three key strategic priorities, know and take care of our customer, maintain and enhance our financial strength and flexibility and continue to innovate and invest for the future. In terms of knowing and taking care of our customers, we are pleased with the results of our customer engagement programs. Our customers are interacting with us with our social networking initiatives on Facebook, Twitter, in the blogosphere and through our mobile applications.
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