Financial Performance Overview

Business Overview

1-800-FLOWERS.COM, Inc. is a leading provider of gifts designed to help inspire customers to share more, connect more, and build more and better relationships. The company operates an e-commerce business platform featuring a family of brands including 1-800-Flowers.com, 1-800-Baskets.com, Cheryl’s Cookies, Harry & David, and others. The company also operates BloomNet, an international floral and gift industry service provider.

Macro-economic Conditions

The company has faced challenges due to broader macroeconomic conditions, including a decline in consumer confidence and sentiment. This has led to a reduction in everyday or “just-because” gift giving, as well as customers shopping later in the holiday season. Total consolidated revenues decreased 12.6% and 8.3% during the three and nine months ended March 30, 2025, respectively, compared to the prior year periods.

The company’s exposure to increased tariffs, primarily impacting its personalization and wholesale businesses, is estimated at around $55 million. To manage this impact, the company is exploring sourcing opportunities outside China, working with vendors on concessions, changing componentry, and modifying its product assortment.

Goodwill and Intangible Impairment

During the quarter ended March 30, 2025, the company recorded a non-cash goodwill and intangible impairment charge of $138.2 million, comprised of $113.4 million related to goodwill in the Consumer Floral & Gifts segment and $24.8 million attributable to the PersonalizationMall tradename. This was driven by a decline in the segment’s actual and projected revenue, as well as a higher discount rate.

Acquisitions

The company completed the acquisitions of Scharffen Berger and Card Isle in fiscal 2025, expanding its product offerings and presence in the greeting card category.

Celebrations Wave

The company announced Celebrations Wave, a strategic initiative to transform the customer experience, increase revenues, optimize operations, lower costs, and position the company for sustainable and profitable growth. This may result in restructuring and other charges of $10-15 million.

Guidance Withdrawal

Given the uncertain macroeconomic environment, the company has withdrawn its near-term guidance to focus on executing its transformational strategy.

Financial Performance

Revenues

• Total net revenues decreased 12.6% and 8.3% during the three and nine months ended March 30, 2025, respectively, compared to the prior year periods.
• E-commerce revenues decreased 14.2% and 9.8% during the three and nine months ended March 30, 2025, respectively, due to lower demand across all segments.
• Other revenues increased 1.4% and 2.7% during the three and nine months ended March 30, 2025, respectively, driven by higher wholesale volumes.

Gross Profit

• Gross profit decreased 24.3% and 10.6% during the three and nine months ended March 30, 2025, respectively, due to lower revenues.
• Gross profit percentage decreased 490 basis points and 110 basis points during the three and nine months ended March 30, 2025, respectively, primarily within the Consumer Floral & Gifts and Gourmet Foods & Gift Baskets segments.

Expenses

• Marketing and sales expenses were relatively flat compared to the prior year.
• Technology and development expenses decreased 3.7% and increased 2.0% during the three and nine months ended March 30, 2025, respectively.
• General and administrative expenses decreased 20.6% and 7.2% during the three and nine months ended March 30, 2025, respectively, primarily due to lower labor costs and changes in the value of the company’s NQDC Plan investments.
• Goodwill and intangible impairment charges of $138.2 million were recorded in the current year.

Liquidity and Capital Resources

• The company had working capital of $108.1 million, including $84.7 million in cash and cash equivalents, as of March 30, 2025.
• Net cash provided by operating activities was $0.7 million for the nine months ended March 30, 2025.
• Net cash used in investing activities was $35.4 million, primarily for capital expenditures and acquisitions.
• Net cash used in financing activities was $40.0 million, mainly for repayment of bank borrowings and the company’s term loan.
• Free cash flow was negative $31.7 million for the nine months ended March 30, 2025, compared to positive $73.6 million in the prior year period.

Outlook

Given the uncertain macroeconomic environment, the company has withdrawn its near-term guidance and is focused on executing its Celebrations Wave strategic initiative to transform the business and position it for long-term success.