Retailers, consumers and prices
Check Out American Greetings saying people are buying more greeting cards that play music or blink lights when you open them.
Those kinds of cards cost more for American Greetings to produce, so the company nets less profit per card compared to a traditional greeting card that might quietly pronounce ”I love you” without an accompanying musical arrangement.
“We had lower yielding sales, meaning we generated less income as a percentage of net sales. The lower yield was driven by more costly content and lower sell-through. As an example, we sold more cards with higher content-related costs, such as music, lights, and embellishments,” Chief Executive Zev Weiss told investors on a call.
American Greetings posted a smaller-than-expected quarterly profit on Friday, hurt by higher costs. A weak economy and a dependency on seasonal business led the company, the second-largest U.S. greeting card company after privately-held Hallmark, to warn it could end the year at the low end of its earnings forecast.