Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries 1-800-FLOWERS.COM, Inc. Reports Fiscal 2024 Second Quarter Results By: 1-800-FLOWERS.COM, Inc. via Business Wire February 01, 2024 at 06:45 AM EST Reports Revenues of $822.1 million and Net Income of $62.9 million, or $0.97 per share, which Includes a Non-Cash Impairment Charge of $19.8 million Adjusted Net Income (1) was $82.7 million, or $1.27 per share Gross Profit Margin Improves 230 basis points to 43.3%, Marking the Fifth Consecutive Quarter of Year-Over-Year Gross Profit Margin Expansion Generates Adjusted EBITDA (1) of $130.1 million Updates Fiscal 2024 Revenue Guidance (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.) 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 2024 second quarter ended December 31, 2023. Fiscal 2024 Second Quarter Highlights Total consolidated revenues decreased 8.4% to $822.1 million, compared with total consolidated revenues of $897.9 million in the prior year period. E-commerce revenue declined 6.6% to $738.4 million. Gross profit margin increased 230 basis points to 43.3%, compared with 41.0% in the prior year period. The gross profit margin expansion was led by improvements across the Company’s three business segments, which benefited from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts. Operating expenses increased $11.8 million from the prior year period, including a $19.8 million non-cash impairment charge in the Consumer Floral and Gifts segment related to the Personalization Mall trademark. Excluding the impact of this charge and the appreciation or depreciation of investments in the Company’s non-qualified compensation plan, operating expenses declined $10.8 million as compared with the prior year period to $242.0 million. Net income for the quarter was $62.9 million, or $0.97 per diluted share, which includes a non-cash impairment charge of $19.8 million or $0.30 per diluted share. Adjusted Net Income1 was $82.7 million, or $1.27 per diluted share. In the prior year period, Net income was $82.5 million, or $1.27 per diluted share. Adjusted EBITDA1 for the quarter was $130.1 million, as compared with Adjusted EBITDA1 of $131.4 million in the prior year period. “Our second quarter earnings came in line with our expectations, as our gross profit margin recovery and expense optimization efforts helped offset a softer than anticipated consumer environment,” said Jim McCann, Chairman and Chief Executive Officer of 1-800-FLOWERS.COM, Inc. “This was our fifth consecutive quarter of gross margin expansion, and we are well on our path to returning to our historical mean annual gross margin rate in the low 40s percent range. Our gross profit margin is benefiting from a reversion to the mean of certain commodity costs combined with our Work Smarter initiatives that are centered on operating more efficiently and provide a benefit to both our gross profit margin and operating expenses.” “We are maintaining our full year Adjusted EBITDA estimate, as our Work Smarter initiatives that are contributing to our gross profit margin and operating margin are expected to continue to mitigate a softer topline environment,” continued Mr. McCann. “Our quarter-over-quarter sales trends continue to move in the right direction and our Relationship Innovation and Work Smarter initiatives are having a clear and direct impact on our business, which we expect to only be further buoyed as the broader consumer discretionary environment improves.” Segment Results The Company provides Fiscal 2024 second quarter selected 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 were $540.0 million, declining 8.2% compared with $588.4 million in the prior year period. Gross profit margin expanded 220 basis points to 43.2%, compared with 41.0% percent in the prior year period, benefiting from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts. Segment contribution margin1 declined by $5.4 million to $118.2 million, compared with segment contribution margin1 of $123.5 million in the prior year period, primarily due to the revenue decline. Consumer Floral & Gifts: Revenues for the quarter were $254.8 million, declining 8.0% compared with $277.0 million in the prior year period. Gross profit margin expanded 230 basis points to 42.8%, compared with 40.5% percent in the prior year period, improving on lower freight and labor costs. Segment contribution margin1 excluding the impairment charge was $30.4 million, compared with segment contribution margin1 of $27.9 million in the prior year period. BloomNet: Revenues for the quarter were $27.2 million, declining 17.1% compared with $32.9 million in the prior year period. Revenue was impacted by the lower order volume processed by BloomNet. Gross profit margin was 47.6%, compared with 42.2% in the prior year period, primarily reflecting product mix and lower freight costs. Segment contribution margin1 was $9.1 million, compared with $9.3 million in the prior year period. Company Guidance The Company is updating its Fiscal 2024 guidance to reduce its revenue outlook for the full year, while maintaining its Adjusted EBITDA and Free Cash Flow expectations, as the improvement in gross profit margin and the company’s expense optimization efforts are expected to mitigate the softer than anticipated revenue improvement. As a result, the Company now expects Fiscal 2024: total revenues on a percentage basis to decline in a range of 7% to 9%, as compared with the prior year; Adjusted EBITDA1 to be in a range of $95 million to $100 million; and Free Cash Flow1 to be in a range of $60 million to $65 million. Conference Call The Company will conduct a conference call to discuss the above details and attached financial results today, February 1, 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 February 8, 2024, at: (US) 1-877-344-7529; (Canada) 855-669-9658; (International) 1-412-317-0088; enter conference ID #: 4402294. 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®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge 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; and Alice’s Table®, a lifestyle business offering fully digital floral, culinary and other experiences to guests across the country. 1-800-FLOWERS.COM, Inc. was recognized among the top 5 on the National Retail Federation’s 2021 Hot 25 Retailers list, which ranks the nation’s fastest-growing retail companies, 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 or follow @1800FLOWERSInc on Twitter. 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) December 31, 2023 July 2, 2023 (unaudited) Assets Current assets: Cash and cash equivalents $ 312,017 $ 126,807 Trade receivables, net 46,578 20,419 Inventories 161,324 191,334 Prepaid and other 24,557 34,583 Total current assets 544,476 373,143 Property, plant and equipment, net 227,643 234,569 Operating lease right-of-use assets 117,825 124,715 Goodwill 153,577 153,376 Other intangibles, net 117,897 139,888 Other assets 30,292 25,739 Total assets $ 1,191,710 $ 1,051,430 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 92,418 $ 52,588 Accrued expenses 224,084 141,914 Current maturities of long-term debt 10,000 10,000 Current portion of long-term operating lease liabilities 15,433 15,759 Total current liabilities 341,935 220,261 Long-term debt, net 181,749 186,391 Long-term operating lease liabilities 110,740 117,330 Deferred tax liabilities, net 25,026 31,134 Other liabilities 28,900 24,471 Total liabilities 688,350 579,587 Total stockholders’ equity 503,360 471,843 Total liabilities and stockholders’ equity $ 1,191,710 $ 1,051,430 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 Six Months Ended December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Net revenues: E-Commerce $ 738,406 $ 790,410 $ 948,317 $ 1,029,332 Other 83,648 107,467 142,787 172,149 Total net revenues 822,054 897,877 1,091,104 1,201,481 Cost of revenues 466,357 530,111 633,479 732,257 Gross profit 355,697 367,766 457,625 469,224 Operating expenses: Marketing and sales 188,557 194,466 271,075 283,605 Technology and development 14,822 14,952 30,126 29,692 General and administrative 27,154 28,908 55,643 55,153 Depreciation and amortization 14,152 14,315 27,346 27,009 Intangible impairment 19,762 - 19,762 - Total operating expenses 264,447 252,641 403,952 395,459 Operating income 91,250 115,125 53,673 73,765 Interest expense, net 4,611 4,143 8,093 6,964 Other (income) expense, net (2,736 ) 148 (2,262 ) 1,070 Income before income taxes 89,375 110,834 47,842 65,731 Income tax expense 26,468 28,304 16,177 16,893 Net income $ 62,907 $ 82,530 $ 31,665 $ 48,838 Basic net income per common share $ 0.97 $ 1.28 $ 0.49 $ 0.76 Diluted net income per common share $ 0.97 $ 1.27 $ 0.49 $ 0.75 Weighted average shares used in the calculation of net income per common share: Basic 64,835 64,675 64,814 64,606 Diluted 65,177 64,835 65,155 64,820 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended December 31, 2023 January 1, 2023 Operating activities: Net income $ 31,665 $ 48,838 Adjustments to reconcile net income to net cash provided by operating activities: Intangible impairment 19,762 - Depreciation and amortization 27,346 27,009 Amortization of deferred financing costs 361 671 Deferred income taxes (6,108 ) (846 ) Bad debt expense 225 2,407 Stock-based compensation 4,595 3,454 Other non-cash items (385 ) (470 ) Changes in operating items: Trade receivables (26,384 ) (31,622 ) Inventories 29,808 46,506 Prepaid and other 6,640 7,550 Accounts payable and accrued expenses 125,404 89,050 Other assets and liabilities (169 ) 1,113 Net cash provided by operating activities 212,760 193,660 Investing activities: Capital expenditures (17,807 ) (23,849 ) Net cash used in investing activities (17,807 ) (23,849 ) Financing activities: Acquisition of treasury stock (4,787 ) (1,175 ) Proceeds from exercise of employee stock options 44 - Proceeds from bank borrowings 82,000 195,900 Repayment of bank borrowings (87,000 ) (205,900 ) Debt issuance cost - (383 ) Net cash used in financing activities (9,743 ) (11,558 ) Net change in cash and cash equivalents 185,210 158,253 Cash and cash equivalents: Beginning of period 126,807 31,465 End of period $ 312,017 $ 189,718 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information – Category Information (dollars in thousands) (unaudited) Three Months Ended December 31, 2023 Intangible Impairment As Adjusted (non- GAAP) December 31, 2023 January 1, 2023 Things Remembered Transaction Costs As Adjusted (non- GAAP) January 1, 2023 % Change Net revenues: Consumer Floral & Gifts $ 254,835 $ - $ 254,835 $ 277,049 $ - $ 277,049 -8.0 % BloomNet 27,236 27,236 32,852 32,852 -17.1 % Gourmet Foods & Gift Baskets 539,963 539,963 588,431 588,431 -8.2 % Corporate 279 279 72 72 287.5 % Intercompany eliminations (259 ) (259 ) (527 ) (527 ) 50.9 % Total net revenues $ 822,054 $ - $ 822,054 $ 897,877 $ - $ 897,877 -8.4 % Gross profit: Consumer Floral & Gifts $ 109,176 $ 109,176 $ 112,274 $ 112,274 -2.8 % 42.8 % 42.8 % 40.5 % 40.5 % BloomNet 12,974 12,974 13,879 13,879 -6.5 % 47.6 % 47.6 % 42.2 % 42.2 % Gourmet Foods & Gift Baskets 233,200 233,200 241,418 241,418 -3.4 % 43.2 % 43.2 % 41.0 % 41.0 % Corporate 347 347 195 195 77.9 % 124.4 % 124.4 % 270.8 % 270.8 % Total gross profit $ 355,697 $ - $ 355,697 $ 367,766 $ - $ 367,766 -3.3 % 43.3 % - 43.3 % 41.0 % - 41.0 % EBITDA (non-GAAP): Segment Contribution Margin (non-GAAP) (a): Consumer Floral & Gifts $ 10,593 $ 19,762 $ 30,355 $ 27,886 $ - $ 27,886 8.9 % BloomNet 9,088 9,088 9,348 9,348 -2.8 % Gourmet Foods & Gift Baskets 118,153 118,153 123,503 123,503 -4.3 % Segment Contribution Margin Subtotal 137,834 19,762 157,596 160,737 - 160,737 -2.0 % Corporate (b) (32,432 ) (32,432 ) (31,297 ) 243 (31,054 ) -4.4 % EBITDA (non-GAAP) 105,402 19,762 125,164 129,440 243 129,683 -3.5 % Add: Stock-based compensation 2,231 2,231 1,899 1,899 17.5 % Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation) 2,682 2,682 (196 ) (196 ) 1468.4 % Adjusted EBITDA (non-GAAP) $ 110,315 $ 19,762 $ 130,077 $ 131,143 $ 243 $ 131,386 -1.0 % 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information – Category Information (dollars in thousands) (unaudited) Six Months Ended December 31, 2023 Intangible Impairment As Adjusted (non- GAAP) December 31, 2023 January 1, 2023 Things Remembered Transaction Costs As Adjusted (non- GAAP) January 1, 2023 % Change Net revenues: Consumer Floral & Gifts $ 397,029 $ - $ 397,029 $ 439,229 $ - $ 439,229 -9.6 % BloomNet 56,106 56,106 66,219 66,219 -15.3 % Gourmet Foods & Gift Baskets 638,072 638,072 696,659 696,659 -8.4 % Corporate 549 549 116 116 373.3 % Intercompany eliminations (652 ) (652 ) (742 ) (742 ) 12.1 % Total net revenues $ 1,091,104 $ - $ 1,091,104 $ 1,201,481 $ - $ 1,201,481 -9.2 % Gross profit: Consumer Floral & Gifts $ 165,498 $ - $ 165,498 $ 174,193 $ - $ 174,193 -5.0 % 41.7 % 41.7 % 39.7 % 39.7 % BloomNet 27,472 27,472 28,366 28,366 -3.2 % 49.0 % 49.0 % 42.8 % 42.8 % Gourmet Foods & Gift Baskets 264,107 264,107 266,531 266,531 -0.9 % 41.4 % 41.4 % 38.3 % 38.3 % Corporate 548 548 134 134 309.0 % 99.8 % 99.8 % 115.5 % 115.5 % Total gross profit $ 457,625 $ - $ 457,625 $ 469,224 $ - $ 469,224 -2.5 % 41.9 % - 41.9 % 39.1 % - 39.1 % EBITDA (non-GAAP): Segment Contribution Margin (non-GAAP) (a): Consumer Floral & Gifts $ 19,419 $ 19,762 $ 39,181 $ 38,696 $ - $ 38,696 1.3 % BloomNet 18,475 18,475 18,865 18,865 -2.1 % Gourmet Foods & Gift Baskets 107,125 107,125 104,793 - 104,793 2.2 % Segment Contribution Margin Subtotal 145,019 19,762 164,781 162,354 - 162,354 1.5 % Corporate (b) (64,000 ) (64,000 ) (61,580 ) 243 (61,337 ) -4.3 % EBITDA (non-GAAP) 81,019 19,762 100,781 100,774 243 101,017 -0.2 % Add: Stock-based compensation 4,595 4,595 3,454 3,454 33.0 % Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation) 2,178 2,178 (1,102 ) (1,102 ) 297.6 % Adjusted EBITDA (non-GAAP) $ 87,792 $ 19,762 $ 107,554 $ 103,126 $ 243 $ 103,369 4.0 % 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited) Reconciliation of net income to adjusted net income (non-GAAP): Three Months Ended Six Months Ended December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Net income $ 62,907 $ 82,530 $ 31,665 $ 48,838 Adjustments to reconcile net income to adjusted net income (non-GAAP) Add: Transaction costs - 243 - 243 Add: Intangible impairment 19,762 - 19,762 - Deduct: Income tax effect on adjustments - (63 ) - (63 ) Adjusted net income (non-GAAP) $ 82,669 $ 82,710 $ 51,427 $ 49,018 Basic and diluted net income per common share Basic $ 0.97 $ 1.28 $ 0.49 $ 0.76 Diluted $ 0.97 $ 1.27 $ 0.49 $ 0.75 Basic and diluted adjusted net income per common share (non-GAAP) Basic $ 1.28 $ 1.28 $ 0.79 $ 0.76 Diluted $ 1.27 $ 1.28 $ 0.79 $ 0.76 Weighted average shares used in the calculation of basic and diluted net income and adjusted net income per common share Basic 64,835 64,675 64,814 64,606 Diluted 65,177 64,835 65,155 64,820 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited) Reconciliation of net income to adjusted EBITDA (non-GAAP): Three Months Ended Six Months Ended December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Net income $ 62,907 $ 82,530 $ 31,665 $ 48,838 Add: Interest expense and other, net 1,875 4,291 5,831 8,034 Add: Depreciation and amortization 14,152 14,315 27,346 27,009 Add: Income tax expense 26,468 28,304 16,177 16,893 EBITDA 105,402 129,440 81,019 100,774 Add: Stock-based compensation 2,231 1,899 4,595 3,454 Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation) 2,682 (196 ) 2,178 (1,102 ) Add: Intangible Impairment 19,762 - 19,762 - Add: Transaction costs - 243 - 243 Adjusted EBITDA $ 130,077 $ 131,386 $ 107,554 $ 103,369 (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, as well as Stock-Based Compensation. 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20240201472134/en/Contacts Investor Contact: Andy Milevoj (516) 237-4617 amilevoj@1800flowers.com Media Contact: Cherie Gallarello cgallarello@1800flowers.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
1-800-FLOWERS.COM, Inc. Reports Fiscal 2024 Second Quarter Results By: 1-800-FLOWERS.COM, Inc. via Business Wire February 01, 2024 at 06:45 AM EST Reports Revenues of $822.1 million and Net Income of $62.9 million, or $0.97 per share, which Includes a Non-Cash Impairment Charge of $19.8 million Adjusted Net Income (1) was $82.7 million, or $1.27 per share Gross Profit Margin Improves 230 basis points to 43.3%, Marking the Fifth Consecutive Quarter of Year-Over-Year Gross Profit Margin Expansion Generates Adjusted EBITDA (1) of $130.1 million Updates Fiscal 2024 Revenue Guidance (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.) 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 2024 second quarter ended December 31, 2023. Fiscal 2024 Second Quarter Highlights Total consolidated revenues decreased 8.4% to $822.1 million, compared with total consolidated revenues of $897.9 million in the prior year period. E-commerce revenue declined 6.6% to $738.4 million. Gross profit margin increased 230 basis points to 43.3%, compared with 41.0% in the prior year period. The gross profit margin expansion was led by improvements across the Company’s three business segments, which benefited from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts. Operating expenses increased $11.8 million from the prior year period, including a $19.8 million non-cash impairment charge in the Consumer Floral and Gifts segment related to the Personalization Mall trademark. Excluding the impact of this charge and the appreciation or depreciation of investments in the Company’s non-qualified compensation plan, operating expenses declined $10.8 million as compared with the prior year period to $242.0 million. Net income for the quarter was $62.9 million, or $0.97 per diluted share, which includes a non-cash impairment charge of $19.8 million or $0.30 per diluted share. Adjusted Net Income1 was $82.7 million, or $1.27 per diluted share. In the prior year period, Net income was $82.5 million, or $1.27 per diluted share. Adjusted EBITDA1 for the quarter was $130.1 million, as compared with Adjusted EBITDA1 of $131.4 million in the prior year period. “Our second quarter earnings came in line with our expectations, as our gross profit margin recovery and expense optimization efforts helped offset a softer than anticipated consumer environment,” said Jim McCann, Chairman and Chief Executive Officer of 1-800-FLOWERS.COM, Inc. “This was our fifth consecutive quarter of gross margin expansion, and we are well on our path to returning to our historical mean annual gross margin rate in the low 40s percent range. Our gross profit margin is benefiting from a reversion to the mean of certain commodity costs combined with our Work Smarter initiatives that are centered on operating more efficiently and provide a benefit to both our gross profit margin and operating expenses.” “We are maintaining our full year Adjusted EBITDA estimate, as our Work Smarter initiatives that are contributing to our gross profit margin and operating margin are expected to continue to mitigate a softer topline environment,” continued Mr. McCann. “Our quarter-over-quarter sales trends continue to move in the right direction and our Relationship Innovation and Work Smarter initiatives are having a clear and direct impact on our business, which we expect to only be further buoyed as the broader consumer discretionary environment improves.” Segment Results The Company provides Fiscal 2024 second quarter selected 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 were $540.0 million, declining 8.2% compared with $588.4 million in the prior year period. Gross profit margin expanded 220 basis points to 43.2%, compared with 41.0% percent in the prior year period, benefiting from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts. Segment contribution margin1 declined by $5.4 million to $118.2 million, compared with segment contribution margin1 of $123.5 million in the prior year period, primarily due to the revenue decline. Consumer Floral & Gifts: Revenues for the quarter were $254.8 million, declining 8.0% compared with $277.0 million in the prior year period. Gross profit margin expanded 230 basis points to 42.8%, compared with 40.5% percent in the prior year period, improving on lower freight and labor costs. Segment contribution margin1 excluding the impairment charge was $30.4 million, compared with segment contribution margin1 of $27.9 million in the prior year period. BloomNet: Revenues for the quarter were $27.2 million, declining 17.1% compared with $32.9 million in the prior year period. Revenue was impacted by the lower order volume processed by BloomNet. Gross profit margin was 47.6%, compared with 42.2% in the prior year period, primarily reflecting product mix and lower freight costs. Segment contribution margin1 was $9.1 million, compared with $9.3 million in the prior year period. Company Guidance The Company is updating its Fiscal 2024 guidance to reduce its revenue outlook for the full year, while maintaining its Adjusted EBITDA and Free Cash Flow expectations, as the improvement in gross profit margin and the company’s expense optimization efforts are expected to mitigate the softer than anticipated revenue improvement. As a result, the Company now expects Fiscal 2024: total revenues on a percentage basis to decline in a range of 7% to 9%, as compared with the prior year; Adjusted EBITDA1 to be in a range of $95 million to $100 million; and Free Cash Flow1 to be in a range of $60 million to $65 million. Conference Call The Company will conduct a conference call to discuss the above details and attached financial results today, February 1, 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 February 8, 2024, at: (US) 1-877-344-7529; (Canada) 855-669-9658; (International) 1-412-317-0088; enter conference ID #: 4402294. 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®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge 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; and Alice’s Table®, a lifestyle business offering fully digital floral, culinary and other experiences to guests across the country. 1-800-FLOWERS.COM, Inc. was recognized among the top 5 on the National Retail Federation’s 2021 Hot 25 Retailers list, which ranks the nation’s fastest-growing retail companies, 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 or follow @1800FLOWERSInc on Twitter. 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) December 31, 2023 July 2, 2023 (unaudited) Assets Current assets: Cash and cash equivalents $ 312,017 $ 126,807 Trade receivables, net 46,578 20,419 Inventories 161,324 191,334 Prepaid and other 24,557 34,583 Total current assets 544,476 373,143 Property, plant and equipment, net 227,643 234,569 Operating lease right-of-use assets 117,825 124,715 Goodwill 153,577 153,376 Other intangibles, net 117,897 139,888 Other assets 30,292 25,739 Total assets $ 1,191,710 $ 1,051,430 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 92,418 $ 52,588 Accrued expenses 224,084 141,914 Current maturities of long-term debt 10,000 10,000 Current portion of long-term operating lease liabilities 15,433 15,759 Total current liabilities 341,935 220,261 Long-term debt, net 181,749 186,391 Long-term operating lease liabilities 110,740 117,330 Deferred tax liabilities, net 25,026 31,134 Other liabilities 28,900 24,471 Total liabilities 688,350 579,587 Total stockholders’ equity 503,360 471,843 Total liabilities and stockholders’ equity $ 1,191,710 $ 1,051,430 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 Six Months Ended December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Net revenues: E-Commerce $ 738,406 $ 790,410 $ 948,317 $ 1,029,332 Other 83,648 107,467 142,787 172,149 Total net revenues 822,054 897,877 1,091,104 1,201,481 Cost of revenues 466,357 530,111 633,479 732,257 Gross profit 355,697 367,766 457,625 469,224 Operating expenses: Marketing and sales 188,557 194,466 271,075 283,605 Technology and development 14,822 14,952 30,126 29,692 General and administrative 27,154 28,908 55,643 55,153 Depreciation and amortization 14,152 14,315 27,346 27,009 Intangible impairment 19,762 - 19,762 - Total operating expenses 264,447 252,641 403,952 395,459 Operating income 91,250 115,125 53,673 73,765 Interest expense, net 4,611 4,143 8,093 6,964 Other (income) expense, net (2,736 ) 148 (2,262 ) 1,070 Income before income taxes 89,375 110,834 47,842 65,731 Income tax expense 26,468 28,304 16,177 16,893 Net income $ 62,907 $ 82,530 $ 31,665 $ 48,838 Basic net income per common share $ 0.97 $ 1.28 $ 0.49 $ 0.76 Diluted net income per common share $ 0.97 $ 1.27 $ 0.49 $ 0.75 Weighted average shares used in the calculation of net income per common share: Basic 64,835 64,675 64,814 64,606 Diluted 65,177 64,835 65,155 64,820 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended December 31, 2023 January 1, 2023 Operating activities: Net income $ 31,665 $ 48,838 Adjustments to reconcile net income to net cash provided by operating activities: Intangible impairment 19,762 - Depreciation and amortization 27,346 27,009 Amortization of deferred financing costs 361 671 Deferred income taxes (6,108 ) (846 ) Bad debt expense 225 2,407 Stock-based compensation 4,595 3,454 Other non-cash items (385 ) (470 ) Changes in operating items: Trade receivables (26,384 ) (31,622 ) Inventories 29,808 46,506 Prepaid and other 6,640 7,550 Accounts payable and accrued expenses 125,404 89,050 Other assets and liabilities (169 ) 1,113 Net cash provided by operating activities 212,760 193,660 Investing activities: Capital expenditures (17,807 ) (23,849 ) Net cash used in investing activities (17,807 ) (23,849 ) Financing activities: Acquisition of treasury stock (4,787 ) (1,175 ) Proceeds from exercise of employee stock options 44 - Proceeds from bank borrowings 82,000 195,900 Repayment of bank borrowings (87,000 ) (205,900 ) Debt issuance cost - (383 ) Net cash used in financing activities (9,743 ) (11,558 ) Net change in cash and cash equivalents 185,210 158,253 Cash and cash equivalents: Beginning of period 126,807 31,465 End of period $ 312,017 $ 189,718 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information – Category Information (dollars in thousands) (unaudited) Three Months Ended December 31, 2023 Intangible Impairment As Adjusted (non- GAAP) December 31, 2023 January 1, 2023 Things Remembered Transaction Costs As Adjusted (non- GAAP) January 1, 2023 % Change Net revenues: Consumer Floral & Gifts $ 254,835 $ - $ 254,835 $ 277,049 $ - $ 277,049 -8.0 % BloomNet 27,236 27,236 32,852 32,852 -17.1 % Gourmet Foods & Gift Baskets 539,963 539,963 588,431 588,431 -8.2 % Corporate 279 279 72 72 287.5 % Intercompany eliminations (259 ) (259 ) (527 ) (527 ) 50.9 % Total net revenues $ 822,054 $ - $ 822,054 $ 897,877 $ - $ 897,877 -8.4 % Gross profit: Consumer Floral & Gifts $ 109,176 $ 109,176 $ 112,274 $ 112,274 -2.8 % 42.8 % 42.8 % 40.5 % 40.5 % BloomNet 12,974 12,974 13,879 13,879 -6.5 % 47.6 % 47.6 % 42.2 % 42.2 % Gourmet Foods & Gift Baskets 233,200 233,200 241,418 241,418 -3.4 % 43.2 % 43.2 % 41.0 % 41.0 % Corporate 347 347 195 195 77.9 % 124.4 % 124.4 % 270.8 % 270.8 % Total gross profit $ 355,697 $ - $ 355,697 $ 367,766 $ - $ 367,766 -3.3 % 43.3 % - 43.3 % 41.0 % - 41.0 % EBITDA (non-GAAP): Segment Contribution Margin (non-GAAP) (a): Consumer Floral & Gifts $ 10,593 $ 19,762 $ 30,355 $ 27,886 $ - $ 27,886 8.9 % BloomNet 9,088 9,088 9,348 9,348 -2.8 % Gourmet Foods & Gift Baskets 118,153 118,153 123,503 123,503 -4.3 % Segment Contribution Margin Subtotal 137,834 19,762 157,596 160,737 - 160,737 -2.0 % Corporate (b) (32,432 ) (32,432 ) (31,297 ) 243 (31,054 ) -4.4 % EBITDA (non-GAAP) 105,402 19,762 125,164 129,440 243 129,683 -3.5 % Add: Stock-based compensation 2,231 2,231 1,899 1,899 17.5 % Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation) 2,682 2,682 (196 ) (196 ) 1468.4 % Adjusted EBITDA (non-GAAP) $ 110,315 $ 19,762 $ 130,077 $ 131,143 $ 243 $ 131,386 -1.0 % 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information – Category Information (dollars in thousands) (unaudited) Six Months Ended December 31, 2023 Intangible Impairment As Adjusted (non- GAAP) December 31, 2023 January 1, 2023 Things Remembered Transaction Costs As Adjusted (non- GAAP) January 1, 2023 % Change Net revenues: Consumer Floral & Gifts $ 397,029 $ - $ 397,029 $ 439,229 $ - $ 439,229 -9.6 % BloomNet 56,106 56,106 66,219 66,219 -15.3 % Gourmet Foods & Gift Baskets 638,072 638,072 696,659 696,659 -8.4 % Corporate 549 549 116 116 373.3 % Intercompany eliminations (652 ) (652 ) (742 ) (742 ) 12.1 % Total net revenues $ 1,091,104 $ - $ 1,091,104 $ 1,201,481 $ - $ 1,201,481 -9.2 % Gross profit: Consumer Floral & Gifts $ 165,498 $ - $ 165,498 $ 174,193 $ - $ 174,193 -5.0 % 41.7 % 41.7 % 39.7 % 39.7 % BloomNet 27,472 27,472 28,366 28,366 -3.2 % 49.0 % 49.0 % 42.8 % 42.8 % Gourmet Foods & Gift Baskets 264,107 264,107 266,531 266,531 -0.9 % 41.4 % 41.4 % 38.3 % 38.3 % Corporate 548 548 134 134 309.0 % 99.8 % 99.8 % 115.5 % 115.5 % Total gross profit $ 457,625 $ - $ 457,625 $ 469,224 $ - $ 469,224 -2.5 % 41.9 % - 41.9 % 39.1 % - 39.1 % EBITDA (non-GAAP): Segment Contribution Margin (non-GAAP) (a): Consumer Floral & Gifts $ 19,419 $ 19,762 $ 39,181 $ 38,696 $ - $ 38,696 1.3 % BloomNet 18,475 18,475 18,865 18,865 -2.1 % Gourmet Foods & Gift Baskets 107,125 107,125 104,793 - 104,793 2.2 % Segment Contribution Margin Subtotal 145,019 19,762 164,781 162,354 - 162,354 1.5 % Corporate (b) (64,000 ) (64,000 ) (61,580 ) 243 (61,337 ) -4.3 % EBITDA (non-GAAP) 81,019 19,762 100,781 100,774 243 101,017 -0.2 % Add: Stock-based compensation 4,595 4,595 3,454 3,454 33.0 % Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation) 2,178 2,178 (1,102 ) (1,102 ) 297.6 % Adjusted EBITDA (non-GAAP) $ 87,792 $ 19,762 $ 107,554 $ 103,126 $ 243 $ 103,369 4.0 % 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited) Reconciliation of net income to adjusted net income (non-GAAP): Three Months Ended Six Months Ended December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Net income $ 62,907 $ 82,530 $ 31,665 $ 48,838 Adjustments to reconcile net income to adjusted net income (non-GAAP) Add: Transaction costs - 243 - 243 Add: Intangible impairment 19,762 - 19,762 - Deduct: Income tax effect on adjustments - (63 ) - (63 ) Adjusted net income (non-GAAP) $ 82,669 $ 82,710 $ 51,427 $ 49,018 Basic and diluted net income per common share Basic $ 0.97 $ 1.28 $ 0.49 $ 0.76 Diluted $ 0.97 $ 1.27 $ 0.49 $ 0.75 Basic and diluted adjusted net income per common share (non-GAAP) Basic $ 1.28 $ 1.28 $ 0.79 $ 0.76 Diluted $ 1.27 $ 1.28 $ 0.79 $ 0.76 Weighted average shares used in the calculation of basic and diluted net income and adjusted net income per common share Basic 64,835 64,675 64,814 64,606 Diluted 65,177 64,835 65,155 64,820 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited) Reconciliation of net income to adjusted EBITDA (non-GAAP): Three Months Ended Six Months Ended December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Net income $ 62,907 $ 82,530 $ 31,665 $ 48,838 Add: Interest expense and other, net 1,875 4,291 5,831 8,034 Add: Depreciation and amortization 14,152 14,315 27,346 27,009 Add: Income tax expense 26,468 28,304 16,177 16,893 EBITDA 105,402 129,440 81,019 100,774 Add: Stock-based compensation 2,231 1,899 4,595 3,454 Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation) 2,682 (196 ) 2,178 (1,102 ) Add: Intangible Impairment 19,762 - 19,762 - Add: Transaction costs - 243 - 243 Adjusted EBITDA $ 130,077 $ 131,386 $ 107,554 $ 103,369 (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, as well as Stock-Based Compensation. 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20240201472134/en/Contacts Investor Contact: Andy Milevoj (516) 237-4617 amilevoj@1800flowers.com Media Contact: Cherie Gallarello cgallarello@1800flowers.com
Reports Revenues of $822.1 million and Net Income of $62.9 million, or $0.97 per share, which Includes a Non-Cash Impairment Charge of $19.8 million Adjusted Net Income (1) was $82.7 million, or $1.27 per share Gross Profit Margin Improves 230 basis points to 43.3%, Marking the Fifth Consecutive Quarter of Year-Over-Year Gross Profit Margin Expansion Generates Adjusted EBITDA (1) of $130.1 million Updates Fiscal 2024 Revenue Guidance (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.)
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 2024 second quarter ended December 31, 2023. Fiscal 2024 Second Quarter Highlights Total consolidated revenues decreased 8.4% to $822.1 million, compared with total consolidated revenues of $897.9 million in the prior year period. E-commerce revenue declined 6.6% to $738.4 million. Gross profit margin increased 230 basis points to 43.3%, compared with 41.0% in the prior year period. The gross profit margin expansion was led by improvements across the Company’s three business segments, which benefited from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts. Operating expenses increased $11.8 million from the prior year period, including a $19.8 million non-cash impairment charge in the Consumer Floral and Gifts segment related to the Personalization Mall trademark. Excluding the impact of this charge and the appreciation or depreciation of investments in the Company’s non-qualified compensation plan, operating expenses declined $10.8 million as compared with the prior year period to $242.0 million. Net income for the quarter was $62.9 million, or $0.97 per diluted share, which includes a non-cash impairment charge of $19.8 million or $0.30 per diluted share. Adjusted Net Income1 was $82.7 million, or $1.27 per diluted share. In the prior year period, Net income was $82.5 million, or $1.27 per diluted share. Adjusted EBITDA1 for the quarter was $130.1 million, as compared with Adjusted EBITDA1 of $131.4 million in the prior year period. “Our second quarter earnings came in line with our expectations, as our gross profit margin recovery and expense optimization efforts helped offset a softer than anticipated consumer environment,” said Jim McCann, Chairman and Chief Executive Officer of 1-800-FLOWERS.COM, Inc. “This was our fifth consecutive quarter of gross margin expansion, and we are well on our path to returning to our historical mean annual gross margin rate in the low 40s percent range. Our gross profit margin is benefiting from a reversion to the mean of certain commodity costs combined with our Work Smarter initiatives that are centered on operating more efficiently and provide a benefit to both our gross profit margin and operating expenses.” “We are maintaining our full year Adjusted EBITDA estimate, as our Work Smarter initiatives that are contributing to our gross profit margin and operating margin are expected to continue to mitigate a softer topline environment,” continued Mr. McCann. “Our quarter-over-quarter sales trends continue to move in the right direction and our Relationship Innovation and Work Smarter initiatives are having a clear and direct impact on our business, which we expect to only be further buoyed as the broader consumer discretionary environment improves.” Segment Results The Company provides Fiscal 2024 second quarter selected 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 were $540.0 million, declining 8.2% compared with $588.4 million in the prior year period. Gross profit margin expanded 220 basis points to 43.2%, compared with 41.0% percent in the prior year period, benefiting from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts. Segment contribution margin1 declined by $5.4 million to $118.2 million, compared with segment contribution margin1 of $123.5 million in the prior year period, primarily due to the revenue decline. Consumer Floral & Gifts: Revenues for the quarter were $254.8 million, declining 8.0% compared with $277.0 million in the prior year period. Gross profit margin expanded 230 basis points to 42.8%, compared with 40.5% percent in the prior year period, improving on lower freight and labor costs. Segment contribution margin1 excluding the impairment charge was $30.4 million, compared with segment contribution margin1 of $27.9 million in the prior year period. BloomNet: Revenues for the quarter were $27.2 million, declining 17.1% compared with $32.9 million in the prior year period. Revenue was impacted by the lower order volume processed by BloomNet. Gross profit margin was 47.6%, compared with 42.2% in the prior year period, primarily reflecting product mix and lower freight costs. Segment contribution margin1 was $9.1 million, compared with $9.3 million in the prior year period. Company Guidance The Company is updating its Fiscal 2024 guidance to reduce its revenue outlook for the full year, while maintaining its Adjusted EBITDA and Free Cash Flow expectations, as the improvement in gross profit margin and the company’s expense optimization efforts are expected to mitigate the softer than anticipated revenue improvement. As a result, the Company now expects Fiscal 2024: total revenues on a percentage basis to decline in a range of 7% to 9%, as compared with the prior year; Adjusted EBITDA1 to be in a range of $95 million to $100 million; and Free Cash Flow1 to be in a range of $60 million to $65 million. Conference Call The Company will conduct a conference call to discuss the above details and attached financial results today, February 1, 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 February 8, 2024, at: (US) 1-877-344-7529; (Canada) 855-669-9658; (International) 1-412-317-0088; enter conference ID #: 4402294. 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®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge 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; and Alice’s Table®, a lifestyle business offering fully digital floral, culinary and other experiences to guests across the country. 1-800-FLOWERS.COM, Inc. was recognized among the top 5 on the National Retail Federation’s 2021 Hot 25 Retailers list, which ranks the nation’s fastest-growing retail companies, 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 or follow @1800FLOWERSInc on Twitter. 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) December 31, 2023 July 2, 2023 (unaudited) Assets Current assets: Cash and cash equivalents $ 312,017 $ 126,807 Trade receivables, net 46,578 20,419 Inventories 161,324 191,334 Prepaid and other 24,557 34,583 Total current assets 544,476 373,143 Property, plant and equipment, net 227,643 234,569 Operating lease right-of-use assets 117,825 124,715 Goodwill 153,577 153,376 Other intangibles, net 117,897 139,888 Other assets 30,292 25,739 Total assets $ 1,191,710 $ 1,051,430 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 92,418 $ 52,588 Accrued expenses 224,084 141,914 Current maturities of long-term debt 10,000 10,000 Current portion of long-term operating lease liabilities 15,433 15,759 Total current liabilities 341,935 220,261 Long-term debt, net 181,749 186,391 Long-term operating lease liabilities 110,740 117,330 Deferred tax liabilities, net 25,026 31,134 Other liabilities 28,900 24,471 Total liabilities 688,350 579,587 Total stockholders’ equity 503,360 471,843 Total liabilities and stockholders’ equity $ 1,191,710 $ 1,051,430 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 Six Months Ended December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Net revenues: E-Commerce $ 738,406 $ 790,410 $ 948,317 $ 1,029,332 Other 83,648 107,467 142,787 172,149 Total net revenues 822,054 897,877 1,091,104 1,201,481 Cost of revenues 466,357 530,111 633,479 732,257 Gross profit 355,697 367,766 457,625 469,224 Operating expenses: Marketing and sales 188,557 194,466 271,075 283,605 Technology and development 14,822 14,952 30,126 29,692 General and administrative 27,154 28,908 55,643 55,153 Depreciation and amortization 14,152 14,315 27,346 27,009 Intangible impairment 19,762 - 19,762 - Total operating expenses 264,447 252,641 403,952 395,459 Operating income 91,250 115,125 53,673 73,765 Interest expense, net 4,611 4,143 8,093 6,964 Other (income) expense, net (2,736 ) 148 (2,262 ) 1,070 Income before income taxes 89,375 110,834 47,842 65,731 Income tax expense 26,468 28,304 16,177 16,893 Net income $ 62,907 $ 82,530 $ 31,665 $ 48,838 Basic net income per common share $ 0.97 $ 1.28 $ 0.49 $ 0.76 Diluted net income per common share $ 0.97 $ 1.27 $ 0.49 $ 0.75 Weighted average shares used in the calculation of net income per common share: Basic 64,835 64,675 64,814 64,606 Diluted 65,177 64,835 65,155 64,820 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended December 31, 2023 January 1, 2023 Operating activities: Net income $ 31,665 $ 48,838 Adjustments to reconcile net income to net cash provided by operating activities: Intangible impairment 19,762 - Depreciation and amortization 27,346 27,009 Amortization of deferred financing costs 361 671 Deferred income taxes (6,108 ) (846 ) Bad debt expense 225 2,407 Stock-based compensation 4,595 3,454 Other non-cash items (385 ) (470 ) Changes in operating items: Trade receivables (26,384 ) (31,622 ) Inventories 29,808 46,506 Prepaid and other 6,640 7,550 Accounts payable and accrued expenses 125,404 89,050 Other assets and liabilities (169 ) 1,113 Net cash provided by operating activities 212,760 193,660 Investing activities: Capital expenditures (17,807 ) (23,849 ) Net cash used in investing activities (17,807 ) (23,849 ) Financing activities: Acquisition of treasury stock (4,787 ) (1,175 ) Proceeds from exercise of employee stock options 44 - Proceeds from bank borrowings 82,000 195,900 Repayment of bank borrowings (87,000 ) (205,900 ) Debt issuance cost - (383 ) Net cash used in financing activities (9,743 ) (11,558 ) Net change in cash and cash equivalents 185,210 158,253 Cash and cash equivalents: Beginning of period 126,807 31,465 End of period $ 312,017 $ 189,718 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information – Category Information (dollars in thousands) (unaudited) Three Months Ended December 31, 2023 Intangible Impairment As Adjusted (non- GAAP) December 31, 2023 January 1, 2023 Things Remembered Transaction Costs As Adjusted (non- GAAP) January 1, 2023 % Change Net revenues: Consumer Floral & Gifts $ 254,835 $ - $ 254,835 $ 277,049 $ - $ 277,049 -8.0 % BloomNet 27,236 27,236 32,852 32,852 -17.1 % Gourmet Foods & Gift Baskets 539,963 539,963 588,431 588,431 -8.2 % Corporate 279 279 72 72 287.5 % Intercompany eliminations (259 ) (259 ) (527 ) (527 ) 50.9 % Total net revenues $ 822,054 $ - $ 822,054 $ 897,877 $ - $ 897,877 -8.4 % Gross profit: Consumer Floral & Gifts $ 109,176 $ 109,176 $ 112,274 $ 112,274 -2.8 % 42.8 % 42.8 % 40.5 % 40.5 % BloomNet 12,974 12,974 13,879 13,879 -6.5 % 47.6 % 47.6 % 42.2 % 42.2 % Gourmet Foods & Gift Baskets 233,200 233,200 241,418 241,418 -3.4 % 43.2 % 43.2 % 41.0 % 41.0 % Corporate 347 347 195 195 77.9 % 124.4 % 124.4 % 270.8 % 270.8 % Total gross profit $ 355,697 $ - $ 355,697 $ 367,766 $ - $ 367,766 -3.3 % 43.3 % - 43.3 % 41.0 % - 41.0 % EBITDA (non-GAAP): Segment Contribution Margin (non-GAAP) (a): Consumer Floral & Gifts $ 10,593 $ 19,762 $ 30,355 $ 27,886 $ - $ 27,886 8.9 % BloomNet 9,088 9,088 9,348 9,348 -2.8 % Gourmet Foods & Gift Baskets 118,153 118,153 123,503 123,503 -4.3 % Segment Contribution Margin Subtotal 137,834 19,762 157,596 160,737 - 160,737 -2.0 % Corporate (b) (32,432 ) (32,432 ) (31,297 ) 243 (31,054 ) -4.4 % EBITDA (non-GAAP) 105,402 19,762 125,164 129,440 243 129,683 -3.5 % Add: Stock-based compensation 2,231 2,231 1,899 1,899 17.5 % Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation) 2,682 2,682 (196 ) (196 ) 1468.4 % Adjusted EBITDA (non-GAAP) $ 110,315 $ 19,762 $ 130,077 $ 131,143 $ 243 $ 131,386 -1.0 % 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information – Category Information (dollars in thousands) (unaudited) Six Months Ended December 31, 2023 Intangible Impairment As Adjusted (non- GAAP) December 31, 2023 January 1, 2023 Things Remembered Transaction Costs As Adjusted (non- GAAP) January 1, 2023 % Change Net revenues: Consumer Floral & Gifts $ 397,029 $ - $ 397,029 $ 439,229 $ - $ 439,229 -9.6 % BloomNet 56,106 56,106 66,219 66,219 -15.3 % Gourmet Foods & Gift Baskets 638,072 638,072 696,659 696,659 -8.4 % Corporate 549 549 116 116 373.3 % Intercompany eliminations (652 ) (652 ) (742 ) (742 ) 12.1 % Total net revenues $ 1,091,104 $ - $ 1,091,104 $ 1,201,481 $ - $ 1,201,481 -9.2 % Gross profit: Consumer Floral & Gifts $ 165,498 $ - $ 165,498 $ 174,193 $ - $ 174,193 -5.0 % 41.7 % 41.7 % 39.7 % 39.7 % BloomNet 27,472 27,472 28,366 28,366 -3.2 % 49.0 % 49.0 % 42.8 % 42.8 % Gourmet Foods & Gift Baskets 264,107 264,107 266,531 266,531 -0.9 % 41.4 % 41.4 % 38.3 % 38.3 % Corporate 548 548 134 134 309.0 % 99.8 % 99.8 % 115.5 % 115.5 % Total gross profit $ 457,625 $ - $ 457,625 $ 469,224 $ - $ 469,224 -2.5 % 41.9 % - 41.9 % 39.1 % - 39.1 % EBITDA (non-GAAP): Segment Contribution Margin (non-GAAP) (a): Consumer Floral & Gifts $ 19,419 $ 19,762 $ 39,181 $ 38,696 $ - $ 38,696 1.3 % BloomNet 18,475 18,475 18,865 18,865 -2.1 % Gourmet Foods & Gift Baskets 107,125 107,125 104,793 - 104,793 2.2 % Segment Contribution Margin Subtotal 145,019 19,762 164,781 162,354 - 162,354 1.5 % Corporate (b) (64,000 ) (64,000 ) (61,580 ) 243 (61,337 ) -4.3 % EBITDA (non-GAAP) 81,019 19,762 100,781 100,774 243 101,017 -0.2 % Add: Stock-based compensation 4,595 4,595 3,454 3,454 33.0 % Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation) 2,178 2,178 (1,102 ) (1,102 ) 297.6 % Adjusted EBITDA (non-GAAP) $ 87,792 $ 19,762 $ 107,554 $ 103,126 $ 243 $ 103,369 4.0 % 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited) Reconciliation of net income to adjusted net income (non-GAAP): Three Months Ended Six Months Ended December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Net income $ 62,907 $ 82,530 $ 31,665 $ 48,838 Adjustments to reconcile net income to adjusted net income (non-GAAP) Add: Transaction costs - 243 - 243 Add: Intangible impairment 19,762 - 19,762 - Deduct: Income tax effect on adjustments - (63 ) - (63 ) Adjusted net income (non-GAAP) $ 82,669 $ 82,710 $ 51,427 $ 49,018 Basic and diluted net income per common share Basic $ 0.97 $ 1.28 $ 0.49 $ 0.76 Diluted $ 0.97 $ 1.27 $ 0.49 $ 0.75 Basic and diluted adjusted net income per common share (non-GAAP) Basic $ 1.28 $ 1.28 $ 0.79 $ 0.76 Diluted $ 1.27 $ 1.28 $ 0.79 $ 0.76 Weighted average shares used in the calculation of basic and diluted net income and adjusted net income per common share Basic 64,835 64,675 64,814 64,606 Diluted 65,177 64,835 65,155 64,820 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited) Reconciliation of net income to adjusted EBITDA (non-GAAP): Three Months Ended Six Months Ended December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Net income $ 62,907 $ 82,530 $ 31,665 $ 48,838 Add: Interest expense and other, net 1,875 4,291 5,831 8,034 Add: Depreciation and amortization 14,152 14,315 27,346 27,009 Add: Income tax expense 26,468 28,304 16,177 16,893 EBITDA 105,402 129,440 81,019 100,774 Add: Stock-based compensation 2,231 1,899 4,595 3,454 Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation) 2,682 (196 ) 2,178 (1,102 ) Add: Intangible Impairment 19,762 - 19,762 - Add: Transaction costs - 243 - 243 Adjusted EBITDA $ 130,077 $ 131,386 $ 107,554 $ 103,369 (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, as well as Stock-Based Compensation. 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. 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Investor Contact: Andy Milevoj (516) 237-4617 amilevoj@1800flowers.com Media Contact: Cherie Gallarello cgallarello@1800flowers.com