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Harry & David reports loss, but says it's poised for successful Christmas

 Posted: 11:15 AM November 13, 2012

Harry & David Holdings reported an $11.5 million loss for its first fiscal quarter, which has never been a big winner for company in good times or bad.

Harry & David had sales of $33.2 million during the 13 weeks ending Sept. 29. But it reported a loss for the quarter as it harvested pears, and began production and set up logistics for the holidays.

The good news for the Medford-based gourmet food and gift company is that it's set up for solid back-to-back Christmas runs after exiting bankruptcy in September 2011.

"Our first quarter fiscal 2013 results demonstrate continued improvements across all facets of our business," Harry & David's Chief Executive Officer Craig Johnson said in a statement with the earnings release. "We are especially pleased with the growth in our customer file and web traffic, which we believe reflects our commitment and progress in growing the business."

Comparable sales increased 9.7 percent over the prior year after adjusting for the additional week in the fiscal 2012 period and taking into account 13 stores closed since last year.

Harry & David's direct marketing produced $18.2 million in sales, an increase of $1.1 million or 6.6 percent. Adjusting for the additional week in the fiscal 2012, direct marketing sales were up $2 million, or 12.2 percent. The sales increase was due to a 15.2 percent increase in order counts driven by greater web traffic. Same-store sales were up 1.5 percent between the two periods, even thought total store sales decreased $2.3 million, or 16.8 percent, because of store closures. (Correction: The increase in direct-marketing sales has been corrected in this story.)

The company said wholesale revenue was up $800,000 from the previous year because of earlier holiday shipments.

"We believe that we are well-positioned for the holiday selling period with a strong assortment and inventory position as well as marketing and operational plans built to both retain existing customers and attract new customers," Johnson said. "We have also completed our pear harvest, and initial results show it to be another successful one."

— Greg Stiles

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