FTD Group F3Q07 (Qtr End 3/31/07) Earnings Call Transcript

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2007-04-30 13:08:36.0

Tags: U.S. Bancorp Piper Jaffray Inc., Call Transcript, Valentine's Day, Earnings, Volume, Marketing Research, Marketing, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Aaron Kessler – Piper Jaffray.

Aaron Kessler - Piper Jaffray

Good quarter. On the consumer side in terms of the order growth, it is 4%; a little lower than our 8% estimate. Was that primarily due to the winter or are there some competitive factors there as well?

Also on the international margin, much stronger than our estimate. What drives that strong growth? Do you have any longer term margin expectations on the growth margin side or operating margin side for your international business?

Becky Sheehan

On the consumer side with the 4.1% increase in order volume I think a couple of things there. I do certainly think as I had mentioned in my remarks, that the weather issues around Valentine's Day certainly, we believe, had an impact on order volumes during that period. That showed itself through either orders not being placed and in some cases, orders being canceled and in other cases refunds or quality issues that impacted us.

I think the other thing, more to what Mike said as well, is that we are focused on making effective spends with respect to our marketing dollars and therefore, we are very conscious about the kinds of dollars we are going to spend, particularly online to generate additional order volume increases, if you will, with our focus being on making sure that we remain profitable and have order volume that is profitable as well.

On the International side, I would say that this was their biggest quarter of the year. They had both Valentine's Day and Mother's Day and that, coupled with their continued focus on looking for ways to continue to improve margins, is something that they were effective in doing and obviously came through with the results for the quarter.

Aaron Kessler - Piper Jaffray

On the Interflora business, order volumes also ticked down to down to about 13%. Is that apples to apples or is there anything that was not normalized in that growth?

Becky Sheehan

We believe it is apples to apples. We think that's comparable growth.

Operator

Your next question comes from Troy Mastin - William Blair.

Troy Mastin - William Blair

On the florist business first wanted to ask about clearinghouse volume being down. If there is anything specific you can point to there? Was that just Valentine's Day? Has anything changed meaningfully on the competitive front there?

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