1-800-FLOWERS.COM, Inc. Reports Fiscal 2025 First Quarter Results

Generates Revenues of $242.1 million and a Net Loss of $34.2 million

Gross Profit Margin Increases 20 basis points to 38.1%

Reports Adjusted EBITDA(1) Loss of $27.9 million  

(1) Refer to “Definitions of Non-GAAP Financial Measures” and the tables attached at the end of this press release for reconciliation of non-GAAP results to applicable GAAP results.)

JERICHO, N.Y.--(BUSINESS WIRE)-- 1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS), a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships, today reported results for its Fiscal 2025 first quarter ended September 29, 2024.

“Our first quarter performance generally came in-line with our expectations, as we began to see a slight improvement in our e-commerce revenue trends during the quarter, our gross profit margin continued to grow, and we reduced expenses as a result of our Work Smarter initiatives to operate more efficiently,” said Jim McCann, Chairman and Chief Executive Officer of 1-800-FLOWERS.COM, Inc. “We expect the improvement in our e-commerce revenue trends to accelerate as we move closer to the holiday selling season, and our revenues will further benefit from the growth of wholesale orders this year. Through the Relationship Innovation initiatives that we implemented over the last two years, we have expanded our offerings and broadened our price points, providing gift givers with more choices at prices that span from budget-friendly to premium. We look forward to helping our customers connect and express their sentiments with the important people in their lives.”

Fiscal 2025 First Quarter Highlights

• Total consolidated revenues decreased 10.0% to $242.1 million, as compared with the prior year period.

• E-commerce revenues decreased 8.0% over the prior year period, comprised of a 6.5% decline in orders and a 1.5% decline in Average Order Value (AOV).

• Gross profit margin increased 20 basis points to 38.1%, as compared with the prior year period.

• Operating expenses declined $0.2 million to $139.3 million, as compared with the prior year period. Excluding the impact of non-recurring charges in the current period associated with new systems implementation costs, as well as the impact of the Company’s non-qualified deferred compensation plan in both periods, operating expenses declined by $4.2 million to $135.8 million, as compared with the prior year period.

• Net loss for the quarter was $34.2 million, or ($0.53) per share, as compared to a net loss of $31.2 million, or ($0.48) per share in the prior year period.

• Adjusted Net Loss1 was $32.9 million, or ($0.51) per share, compared with an Adjusted Net Loss1 of $31.2 million, or ($0.48) per share, in the prior year period.

• Adjusted EBITDA1 loss for the quarter was $27.9 million, as compared with an Adjusted EBITDA1 loss of $22.5 million in the prior year period.

• 1-800-FLOWERS.COM, Inc. was named one of Newsweek's Most Admired Workplaces for 2025.

Segment Results

The Company provides Fiscal 2025 first quarter financial results for its Gourmet Foods and Gift Baskets, Consumer Floral and Gifts, and BloomNet® segments in the tables attached to this release and as follows:

• Gourmet Foods and Gift Baskets: Revenues for the quarter declined 14.4% to $84.0 million as compared with the prior year period. This decline reflects the timing of approximately $3.0 million of wholesale orders that shifted from the first quarter into the second quarter. Gross profit margin increased 50 basis points to 32.0%, benefiting from the Company’s inventory optimization efforts and a decline in certain commodity costs. Excluding the impact of the systems implementation costs, adjusted segment contribution margin1 loss was $11.3 million, compared with a loss of $11.0 million in the prior year period.

• Consumer Floral & Gifts: Revenues for the quarter declined 4.9% to $135.2 million as compared with the prior year period. Gross profit margin increased 30 basis points to 39.9%. Segment contribution margin1 was $4.9 million, compared with $8.8 million in the prior year period.

• BloomNet: Revenues for the quarter declined 20.1% to $23.1 million as compared with the prior year period. Revenue and gross margin were impacted by the lower volume of lower margin orders processed by BloomNet. Gross profit margin decreased 20 basis points to 50.0% due to deleveraging on the lower sales volume. Segment contribution margin1 was $6.8 million, compared with $9.4 million in the prior year period.

Company Guidance

For Fiscal 2025, the Company continues to expect its revenue trend to improve as the fiscal year progresses benefiting from the Company’s Relationship Innovation initiatives that have expanded the Company’s product offerings, broadened price points, and enhanced the user experience, combined with increased marketing spend. The Adjusted EBITDA range reflects the acknowledgement that the consumer environment remains uncertain.

As a result, for Fiscal 2025 the Company continues to expect:

• total revenues on a percentage basis to be in a range of flat to a decrease in the low-single digits, as compared with the prior year;
• Adjusted EBITDA1 to be in a range of $85 million to $95 million; and
• Free Cash Flow1 to be in a range of $45 million to $55 million.

Conference Call

The Company will conduct a conference call to discuss the above details and attached financial results today, October 31, 2024, at 8:00 a.m. (ET). The conference call will be webcast from the Investors section of the Company’s website at www.1800flowersinc.com. A recording of the call will be posted on the Investors section of the Company’s website within two hours of the call’s completion. A telephonic replay of the call can be accessed beginning at 2:00 p.m. (ET) today through November 7, 2024, at: (US) 1-877-344-7529; (Canada) 855-669-9658; (International) 1-412-317-0088; enter conference ID #: 1727189.

Definitions of non-GAAP Financial Measures:

We sometimes use financial measures derived from consolidated financial information, but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. Non-GAAP financial measures referred to in this document are either labeled as “non-GAAP” or designated as such with a “1”. See below for definitions and the reasons why we use these non-GAAP financial measures. Where applicable, see the Selected Financial Information below for reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, tax items, amortization or others that may arise during the year, and the Company’s management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The lack of such reconciling information should be considered when assessing the impact of such disclosures.

EBITDA and Adjusted EBITDA:

We define EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of stock-based compensation, Non-Qualified Plan Investment appreciation/depreciation, and for certain items affecting period-to-period comparability. See Selected Financial Information for details on how EBITDA and Adjusted EBITDA were calculated for each period presented. The Company presents EBITDA and Adjusted EBITDA because it considers such information meaningful supplemental measures of its performance and believes such information is frequently used by the investment community in the evaluation of similarly situated companies. The Company uses EBITDA and Adjusted EBITDA as factors to determine the total amount of incentive compensation available to be awarded to executive officers and other employees. The Company's credit agreement uses EBITDA and Adjusted EBITDA to determine its interest rate and to measure compliance with certain covenants. EBITDA and Adjusted EBITDA are also used by the Company to evaluate and price potential acquisition candidates. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of the limitations are: (a) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, the Company's working capital needs; (b) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the Company's debts; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and EBITDA does not reflect any cash requirements for such capital expenditures. EBITDA and Adjusted EBITDA should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

Segment Contribution Margin and Adjusted Segment Contribution Margin

We define Segment Contribution Margin as earnings before interest, taxes, depreciation, and amortization, before the allocation of corporate overhead expenses. Adjusted Segment Contribution Margin is defined as Segment Contribution Margin adjusted for certain items affecting period-to-period comparability. See Selected Financial Information for details on how Segment Contribution Margin and Adjusted Segment Contribution Margin were calculated for each period presented. When viewed together with our GAAP results, we believe Segment Contribution Margin and Adjusted Segment Contribution Margin provide management and users of the financial statements meaningful information about the performance of our business segments. Segment Contribution Margin and Adjusted Segment Contribution Margin are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of Segment Contribution Margin and Adjusted Segment Contribution Margin is that they are an incomplete measure of profitability as they do not include all operating expenses or non-operating income and expenses. Management compensates for this limitation when using these measures by looking at other GAAP measures, such as Operating Income and Net Income.

Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share:

We define Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share as Net Income (Loss) and Net Income (Loss) Per Common Share adjusted for certain items affecting period-to-period comparability. See Selected Financial Information below for details on how Adjusted Net Income (Loss) Per Common Share and Adjusted or Comparable Net Income (Loss) Per Common Share were calculated for each period presented. We believe that Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share are meaningful measures because they increase the comparability of period-to-period results. Since these are not measures of performance calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, GAAP Net Income (Loss) and Net Income (Loss) Per Common Share, as indicators of operating performance and they may not be comparable to similarly titled measures employed by other companies.

Free Cash Flow:

We define Free Cash Flow as net cash provided by operating activities less capital expenditures. The Company considers Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of fixed assets, which can then be used to, among other things, invest in the Company’s business, make strategic acquisitions, strengthen the balance sheet, and repurchase stock or retire debt. Free Cash Flow is a liquidity measure that is frequently used by the investment community in the evaluation of similarly situated companies. Since Free Cash Flow is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. A limitation of the utility of Free Cash Flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company's cash balance for the period.

About 1-800-FLOWERS.COM, Inc.

1-800-FLOWERS.COM, Inc. is a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships. The Company’s e-commerce business platform features an all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, PersonalizationMall.com®, Shari’s Berries®, FruitBouquets.com®, Things Remembered®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, Simply Chocolate® and Scharffen Berger®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge on eligible products across our portfolio of brands, 1-800-FLOWERS.COM, Inc. strives to deepen relationships with customers. The Company also operates BloomNet®, an international floral and gift industry service provider offering a broad-range of products and services designed to help members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; Alice’s Table®, a lifestyle business offering fully digital livestreaming and on demand floral, culinary and other experiences to guests across the country; and Card Isle®, an e-commerce greeting card service. 1-800-FLOWERS.COM, Inc. was recognized among America’s Most Trustworthy Companies by Newsweek. 1-800-FLOWERS.COM, Inc. was also recognized as one of America’s Most Admired Workplaces for 2025 by Newsweek and was named to the Fortune 1000 list in 2022. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS. For more information, visit 1800flowersinc.com.

FLWS–COMP FLWS-FN

Special Note Regarding Forward Looking Statements:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company’s current expectations or beliefs concerning future events and can generally be identified using statements that include words such as “estimate,” “expects,” “project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,” “forecast,” “likely,” “should,” “will,” “target” or similar words or phrases. These forward-looking statements are subject to risks, uncertainties, and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results expressed or implied in the forward-looking statements, including, but not limited to, statements regarding the Company’s ability to achieve its guidance for the full Fiscal year; the Company’s ability to leverage its operating platform and reduce its operating expense ratio; its ability to successfully integrate acquired businesses and assets; its ability to successfully execute its strategic initiatives; its ability to cost effectively acquire and retain customers; the outcome of contingencies, including legal proceedings in the normal course of business; its ability to compete against existing and new competitors; its ability to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; its ability to reduce promotional activities and achieve more efficient marketing programs; and general consumer sentiment and industry and economic conditions that may affect levels of discretionary customer purchases of the Company’s products. The Company undertakes no obligation to publicly update any of the forward-looking statements, whether because of new information, future events or otherwise, made in this release or in any of its SEC filings. Consequently, you should not consider any such list to be a complete set of all potential risks and uncertainties. For a more detailed description of these and other risk factors, refer to the Company’s SEC filings, including the Company’s Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q.

Note: The following tables are an integral part of this press release without which the information presented in this press release should be considered incomplete.

1-800-FLOWERS.COM, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands)
		September 29, 2024				June 30, 2024
			(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	8,407			$	159,437
Trade receivables, net			41,024				18,024
Inventories			275,323				176,591
Prepaid and other			60,960				31,680
Total current assets			385,714				385,732
Property, plant and equipment, net			225,239				223,789
Operating lease right-of-use assets			112,926				113,926
Goodwill			156,648				156,537
Other intangibles, net			115,531				116,216
Other assets			38,566				36,448
Total assets		$	1,034,624			$	1,032,648
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	63,732			$	80,005
Accrued expenses			128,926				121,303
Current maturities of long-term debt			57,500				10,000
Current portion of long-term operating lease liabilities			16,836				16,511
Total current liabilities			266,994				227,819
Long-term debt, net			172,293				177,113
Long-term operating lease liabilities			104,398				105,866
Deferred tax liabilities, net			18,794				19,402
Other liabilities			38,728				36,106
Total liabilities			601,207				566,306
Total stockholders’ equity			433,417				466,342
Total liabilities and stockholders’ equity		$	1,034,624			$	1,032,648

1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information Consolidated Statements of Operations (in thousands, except for per share data) (unaudited)
		Three Months Ended
		September 29, 2024				October 1, 2023
Net revenues:
E-Commerce		$	193,174			$	209,911
Other			48,916				59,139
Total net revenues			242,090				269,050
Cost of revenues			149,771				167,122
Gross profit			92,319				101,928
Operating expenses:
Marketing and sales			82,097				82,518
Technology and development			15,639				15,304
General and administrative			28,526				28,489
Depreciation and amortization			13,038				13,194
Total operating expenses			139,300				139,505
Operating loss			(46,981	)			(37,577	)
Interest expense, net			3,360				3,482
Other (income)/expense, net			(1,767	)			474
Loss before income taxes			(48,574	)			(41,533	)
Income tax benefit			(14,384	)			(10,291	)
Net loss		$	(34,190	)		$	(31,242	)
Basic and diluted net loss per common share		$	(0.53	)		$	(0.48	)
Basic and diluted weighted average shares used in the calculation of net loss per common share			64,198				64,785

1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information Consolidated Statements of Cash Flows (in thousands) (unaudited)
			Three Months Ended
			September 29, 2024					October 1, 2023
Operating activities:
Net loss		$	(34,190	)			$	(31,242	)
Adjustments to reconcile net loss to net cash provided by operating activities, net of acquisitions:
Depreciation and amortization			13,038					13,194
Amortization of deferred financing costs			180					180
Deferred income taxes			(607	)				(579	)
Bad debt expense			84					586
Stock-based compensation			2,479					2,364
Other non-cash items			255					270
Changes in operating items:
Trade receivables			(23,025	)				(24,407	)
Inventories			(97,439	)				(89,287	)
Prepaid and other			(29,237	)				(14,764	)
Accounts payable and accrued expenses			(8,806	)				(42	)
Other assets and liabilities			27					(157	)
Net cash used in operating activities			(177,241	)				(143,884	)
Investing activities:
Acquisitions, net of cash acquired			(3,000	)				-
Capital expenditures			(12,075	)				(6,974	)
Net cash used in investing activities			(15,075	)				(6,974	)
Financing activities:
Acquisition of treasury stock			(1,255	)				(74	)
Proceeds from exercise of employee stock options			41					-
Proceeds from bank borrowings			45,000					35,000
Repayment of bank borrowings			(2,500	)				(2,500	)
Net cash provided by financing activities			41,286					32,426
Net change in cash and cash equivalents			(151,030	)				(118,432	)
Cash and cash equivalents:
Beginning of period			159,437					126,807
End of period		$	8,407				$	8,375

1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information – Category Information (dollars in thousands) (unaudited)
	Three Months Ended
	September 29, 2024			System Implementation Costs			As Adjusted (non-GAAP) September 29, 2024				October 1, 2023			% Change
Net revenues:
Consumer Floral & Gifts	$	135,180					$	135,180			$	142,194		-4.9	%
BloomNet		23,075						23,075				28,870		-20.1	%
Gourmet Foods & Gift Baskets		84,003						84,003				98,109		-14.4	%
Corporate		89						89				270		-67.0	%
Intercompany eliminations		(257	)					(257	)			(393	)	34.6	%
Total net revenues	$	242,090		$	-		$	242,090			$	269,050		-10.0	%
Gross profit:
Consumer Floral & Gifts	$	53,929					$	53,929			$	56,322		-4.2	%
		39.9	%					39.9	%			39.6	%
BloomNet		11,528						11,528				14,498		-20.5	%
		50.0	%					50.0	%			50.2	%
Gourmet Foods & Gift Baskets		26,844						26,844				30,907		-13.1	%
		32.0	%					32.0	%			31.5	%
Corporate		18						18				201		-91.0	%
		20.2	%					20.2	%			74.4	%
Total gross profit	$	92,319		$	-		$	92,319			$	101,928		-9.4	%
		38.1	%		-			38.1	%			37.9	%
EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
Consumer Floral & Gifts	$	4,944					$	4,944			$	8,826		-44.0	%
BloomNet		6,841						6,841				9,387		-27.1	%
Gourmet Foods & Gift Baskets		(12,253	)		913			(11,340	)			(11,028	)	-2.8	%
Segment Contribution Margin Subtotal		(468	)		913			445				7,185		-93.8	%
Corporate (b)		(33,475	)		867			(32,608	)			(31,568	)	-3.3	%
EBITDA (non-GAAP)		(33,943	)		1,780			(32,163	)			(24,383	)	-31.9	%
Add: Stock-based compensation		2,479						2.479				2,364		4.9	%
Add: Compensation charge related to NQDC Plan Investment Appreciation (Depreciation)		1,738						1,738				(504	)	444.8	%
Adjusted EBITDA (non-GAAP)	$	(29,726	)	$	1,780		$	(27,946	)		$	(22,523	)	-24.1	%

1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands, except for per share data) (unaudited)
Reconciliation of net loss to adjusted net loss (non-GAAP):	Three Months Ended
	September 29, 2024				October 1, 2023
Net loss	$	(34,190	)		$	(31,242	)
Adjustments to reconcile net loss to adjusted net loss (non-GAAP)
Add: System Implementation Costs		1,780				-
Deduct: Income tax effect on adjustments		(527	)			-
Adjusted net loss (non-GAAP)	$	(32,937	)		$	(31,242	)
Basic and diluted net loss per common share	$	(0.53	)		$	(0.48	)
Basic and diluted adjusted net loss per common share (non-GAAP)	$	(0.51	)		$	(0.48	)
Weighted average shares used in the calculation of basic and diluted net loss and adjusted net loss per common share		64,198				64,785

1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited)
Reconciliation of net loss to adjusted EBITDA (non-GAAP):	Three Months Ended
	September 29, 2024				October 1, 2023
Net loss	$	(34,190	)		$	(31,242	)
Add: Interest expense and other, net		1,593				3,956
Add: Depreciation and amortization		13,038				13,194
Add: Income tax benefit		(14,384	)			(10,291	)
EBITDA		(33,943	)			(24,383	)
Add: Stock-based compensation		2,479				2,364
Add: Compensation charge related to NQDC plan investment appreciation (depreciation)		1,738				(504	)
Add: System Implementation Costs		1,780				-
Adjusted EBITDA	$	(27,946	)		$	(22,523	)

(a) Segment performance is measured based on segment contribution margin or segment Adjusted EBITDA, reflecting only the direct controllable revenue and operating expenses of the segments, both of which are non-GAAP measurements. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead, described above, depreciation and amortization, other income (net), and other items that we do not consider indicative of our core operating performance.
(b) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, Stock-Based Compensation, as well as changes in the fair value of the Company's NQDC plan. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.

1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited)
Reconciliation of net cash used in operating activities to free cash flow (non-GAAP):	Three Months Ended
	September 29, 2024				October 1, 2023
Net cash used in operating activities	$	(177,241	)		$	(143,884	)
Capital expenditures		(12,075	)			(6,974	)
Free cash flow	$	(189,316	)		$	(150,858	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241031507666/en/

Investor Contact: Andy Milevoj amilevoj@1800flowers.com Media Contact: Cherie Gallarello cgallarello@1800flowers.com

Source: 1-800-FLOWERS.COM, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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