FTD Stock Wilts on Weak Valentine’s Day Sales

The flower and gift delivery firm says Q1 sales took a $20 million hit due to a marketing misfire with its ProFlowers and gourmet foods brands.
Matthew HellerMarch 9, 2018

What should have been one of the biggest flower-delivery days of the year for the parent of ProFlowers and Interflora turned out to be a Valentine’s Day bust because of its own marketing misfire.

FTD Companies said Thursday it expected first-quarter revenues to be approximately $20 million below its expectations as a result of the “unfavorable performance” of ProFlowers and its gourmet foods business.

Flower and food basket deliveries, FTD said in a news release, were hit by “media campaign investments that generated lower than expected sales, offset in part by favorable sales performance in, the international and florist segments, and personal creations.”

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“For the Valentine’s Day holiday this year we took a different approach to media-based marketing in certain brands, and the results were substantially short of our expectations,” FTD Chief Executive John Walden said. “We will incorporate our many learnings from Valentine’s Day to inform our plans throughout this year and in the future.”

For the full fiscal year, FTD forecast results in the lower half of its previous guidance, with revenue down 2% to up 2% and adjusted EBITDA of approximately $52 million to $62 million.

FTD’s stock plummeted 40% to an all-time low of $4.07 in trading Thursday as the company also said that based on its results and outlook for 2018, it anticipates that it will not meet some of the requirements of its credit agreement.

Discussions with FTD’s lenders and Liberty Interactive Corp., its largest shareholder, “are ongoing and no agreement has been reached regarding any financing transactions or other modifications to the company’s credit agreement,” FTD said.

For last Valentine’s Day, FTD for the first time combined brand marketing for two of its portfolio companies — ProFlowers and the gourmet gift and chocolate service Shari’s Berries — in a campaign spanning traditional and digital media.

“We are interested in getting back to some old-school fundamentals of marketing, which is a little more storytelling and a lot more brand building,” Chief Marketing Officer Jeff Severts told Ad Exchanger.

The joint campaign was called “Perfectly Paired.”