Part I [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements, reflecting financial position, operational results, and cash flows, including impacts from ASC 842 and the Shari's Berries acquisition Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | Dec 29, 2019 ($ in thousands) | June 30, 2019 ($ in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | 431,593 | 303,238 | | Cash and cash equivalents | 295,561 | 172,923 | | **Total Assets** | **826,220** | **606,440** | | **Total Current Liabilities** | 226,703 | 127,497 | | **Total Liabilities** | **425,312** | **263,729** | | **Total Stockholders' Equity** | **400,908** | **342,711** | Condensed Consolidated Statements of Income Highlights (Unaudited) | Metric | Three Months Ended Dec 29, 2019 ($ in thousands) | Three Months Ended Dec 30, 2018 ($ in thousands) | Six Months Ended Dec 29, 2019 ($ in thousands) | Six Months Ended Dec 30, 2018 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 605,642 | 571,316 | 792,905 | 740,812 | | Gross Profit | 269,172 | 254,827 | 345,318 | 323,367 | | Operating Income | 99,571 | 94,685 | 78,918 | 71,719 | | **Net Income** | **74,152** | **68,578** | **58,881** | **51,312** | | **Diluted EPS** | **$1.12** | **$1.04** | **$0.89** | **$0.77** | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Six Months Ended Dec 29, 2019 ($ in thousands) | Six Months Ended Dec 30, 2018 ($ in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | 162,156 | 139,583 | | Net cash used in investing activities | (32,213) | (11,786) | | Net cash used in financing activities | (7,305) | (17,352) | | **Net change in cash and cash equivalents** | **122,638** | **110,445** | - On August 14, 2019, the Company acquired the Shari's Berries business for a purchase price of **$20.5 million**, recognizing goodwill of **$12.1 million** from the transaction[48](index=48&type=chunk)[49](index=49&type=chunk) - Effective July 1, 2019, the company adopted ASC 842, recognizing operating lease right-of-use assets of **$78.7 million** and operating lease liabilities of **$80.7 million**[36](index=36&type=chunk)[37](index=37&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting revenue growth across segments, trends in profitability and expenses, and the company's liquidity and capital resources - Total net revenues grew **6.0%** to **$605.6 million** for the second quarter and **7.0%** to **$792.9 million** for the first six months of fiscal 2020, with growth across all three business segments[100](index=100&type=chunk)[101](index=101&type=chunk) - The acquisition of Shari's Berries in August 2019 contributed approximately **1.2%** of consolidated incremental growth during both the three and six-month periods[101](index=101&type=chunk) - Gross profit margin slightly decreased to **44.4%** for the quarter and **43.6%** for the six months, impacted by product mix and macroeconomic headwinds including rising labor/transportation costs, tariffs, and a highly promotional holiday season[112](index=112&type=chunk) Adjusted EBITDA Performance (Non-GAAP) | Period | Adjusted EBITDA ($ in thousands) | YoY Change | | :--- | :--- | :--- | | Three Months Ended Dec 29, 2019 | 110,683 | 7.4% | | Six Months Ended Dec 29, 2019 | 99,386 | 11.4% | [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section details operational results, including increased net revenues across segments, gross profit trends, and changes in operating expenses, leading to strong net income and EPS growth Revenue Growth by Segment (Three Months Ended Dec 29, 2019 vs. 2018) | Segment | Net Revenues ($ in thousands) | YoY Change | | :--- | :--- | :--- | | 1-800-Flowers.com Consumer Floral | 115,716 | 7.0% | | BloomNet Wire Service | 25,722 | 9.8% | | Gourmet Food & Gift Baskets | 464,584 | 5.6% | - E-commerce revenues increased **6.2%** to **$487.1 million** in Q2 2020, driven by a **4.8%** increase in orders and a **1.3%** increase in average order value to **$84.53**[104](index=104&type=chunk) - Marketing and sales expense increased **6.5%** for the quarter, remaining relatively stable as a percentage of revenue at **21.0%** compared to **20.9%** in the prior year, showing efficient marketing spend[118](index=118&type=chunk)[119](index=119&type=chunk) - General and administrative expenses increased **4.8%** for the quarter, primarily due to higher labor costs and acquisition-related professional fees[123](index=123&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by cash, operating cash flows, and a credit facility, with strong working capital and cash generation from operations, despite significant investing activities - Working capital stood at **$204.9 million** as of December 29, 2019, a significant increase from **$175.7 million** at June 30, 2019, reflecting strong cash generation during the holiday season[130](index=130&type=chunk) - Net cash provided by operating activities was **$162.2 million** for the six months ended Dec 29, 2019, primarily due to net income and favorable seasonal changes in working capital[133](index=133&type=chunk) - Net cash used in investing activities was **$32.2 million**, mainly for the **$20.5 million** acquisition of Shari's Berries and **$10.7 million** in capital expenditures[134](index=134&type=chunk) - The company believes available cash balances are sufficient to fund operating needs through fiscal 2021[131](index=131&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's market risk exposure, primarily from interest rate changes on variable-rate debt, noting a minor impact from hypothetical rate increases - The company's primary market risk is from interest rate changes on its variable-rate debt under the 2019 Credit Agreement[146](index=146&type=chunk) - A hypothetical **50 basis point** increase in interest rates would result in an approximate **$0.1 million** and **$0.2 million** increase in interest expense for the three and six months ended December 29, 2019, respectively[146](index=146&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[149](index=149&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[150](index=150&type=chunk) Part II [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal claims, which management believes will not materially adversely affect its financial position or operations - Management opines that pending legal actions will not have a material adverse effect on the Company's financial condition or results[151](index=151&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section confirms no material changes to the company's risk factors since the most recent Annual Report on Form 10-K - There were no material changes to the Company's risk factors from the most recent Form 10-K[152](index=152&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details stock repurchase activity for the first six months of fiscal 2020, including the Board's authorization and remaining repurchase capacity Common Stock Repurchases (July 1, 2019 - Dec 29, 2019) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | 09/30/19 - 10/27/19 | - | - | | 10/28/19 - 11/24/19 | 158,750 | $13.24 | | 11/25/19 - 12/29/19 | 210,000 | $13.76 | | **Total for Q2** | **368,750** | **$13.55 (approx.)** | - As of December 29, 2019, **$25.0 million** remained authorized for repurchase under the company's stock repurchase plan[153](index=153&type=chunk) [Defaults upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) Not applicable [Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) None [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files - The report includes required certifications from the principal executive officer and principal financial officer, as well as XBRL filings[160](index=160&type=chunk)

Call Start: 08:00 Call End: 08:50 January 1, 0000 ET Q2 2020 Earnings Conference Call January 30, 2020 08:00 AM ET Company Participants Joe Pititto - Senior Vice President, Investor Relations Chris McCann - Chief Executive Officer Bill Shea - Chief Financial Officer Conference Call Participants Alex Furman - Craig-Hallum Capital Group Dan Kurnos - The Benchmark Company Michael Kupinski - Noble Capital Markets Linda Bolton Weiser - D.A. Davidson Douglas Lane - Lane Research Anthony Lebiedzinski - Sidoti & Co ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 29, 2019 or __ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File No. 0-26841 1-800-FLOWERS.COM, Inc. (Exact name of registrant as specified in its charter) | --- | --- | |------------------------------- ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-26841 1-800-FLOWERS.COM, Inc. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation or organization) 11-3117311 ( ...

1-800-Flowers.Com, Inc. (NASDAQ:FLWS) Q4 2019 Earnings Conference Call August 22, 2019 11:00 AM ET Company Participants Joe Pititto - SVP, IR & Corporate Communications Christopher McCann - CEO, President & Director William Shea - SVP, Treasurer & CFO Conference Call Participants Daniel Kurnos - The Benchmark Company Anthony Lebiedzinski - Sidoti & Company Alex Fuhrman - Craig-Hallum Capital Group Michael Kupinski - NOBLE Capital Markets Operator Good day and welcome to the 1-800-Flowers.com, Inc. Fiscal Ye ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 or __ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File No. 0-26841 1-800-FLOWERS.COM, Inc. (Exact name of registrant as specified in its charter) | --- | --- | |----------------------------------- ...

1-800-Flowers.Com, Inc. (NASDAQ:FLWS) Q1 2019 Earnings Conference Call April 30, 2019 11:00 AM ET Company Participants Joseph Pititto - SVP, IR & Corporate Communications Christopher McCann - CEO, President & Director William Shea - SVP, Treasurer & CFO Conference Call Participants Alex Fuhrman - Craig-Hallum Capital Group Linda Bolton-Weiser - D.A. Davidson & Co. Michael Kupinski - NOBLE Capital Markets Daniel Kurnos - The Benchmark Company Anthony Lebiedzinski - Sidoti & Company Operator Good day, and wel ...

Part I [Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section provides the unaudited condensed consolidated financial statements and management's discussion for the period ended December 30, 2018 [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for 1-800-FLOWERS.COM, Inc. for the quarterly period ended December 30, 2018 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$685.5 million** from **$570.9 million**, driven by a rise in cash and cash equivalents to **$257.7 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 30, 2018 (Unaudited) | Jul 1, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $257,685 | $147,240 | | Total current assets | $390,199 | $273,021 | | Total assets | $685,461 | $570,889 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $203,512 | $124,799 | | Total liabilities | $329,388 | $255,985 | | Total stockholders' equity | $356,073 | $314,904 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net revenues grew to **$571.3 million** for the quarter and **$740.8 million** for six months, while net income slightly decreased due to higher tax expense Condensed Consolidated Statements of Income (in thousands, except per share data) | Metric | Three Months Ended Dec 30, 2018 | Three Months Ended Dec 31, 2017 | Six Months Ended Dec 30, 2018 | Six Months Ended Dec 31, 2017 | | :--- | :--- | :--- | :--- | :--- | | Net revenues | $571,316 | $526,093 | $740,812 | $683,442 | | Gross profit | $254,827 | $235,259 | $323,367 | $302,537 | | Operating income | $94,685 | $84,466 | $71,719 | $64,863 | | Net income | $68,578 | $70,699 | $51,312 | $57,477 | | Diluted EPS | $1.04 | $1.06 | $0.77 | $0.86 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$139.6 million**, ending the period with **$257.7 million** in cash and cash equivalents Six Months Ended Cash Flow Summary (in thousands) | Activity | Dec 30, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | Net cash provided by operating activities | $139,583 | $114,166 | | Net cash used in investing activities | ($11,786) | ($17,364) | | Net cash used in financing activities | ($17,352) | ($13,945) | | **Net change in cash and cash equivalents** | **$110,445** | **$82,857** | | **Cash and cash equivalents, end of period** | **$257,685** | **$232,589** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including ASC 606 adoption, seasonality, segment reporting, and the impact of the 2017 Tax Act - The company's business is highly seasonal, with the second fiscal quarter (Thanksgiving through Christmas) accounting for nearly **50% of annual revenues** and all of its earnings[20](index=20&type=chunk) - The company adopted the new revenue recognition standard (ASC 606) effective July 2, 2018, using the modified retrospective approach, resulting in a net increase to retained earnings of **$0.3 million**, primarily related to gift card breakage income[27](index=27&type=chunk) - The company completed its assessment of the 2017 Tax Cuts and Jobs Act in the second quarter of fiscal 2019, with no adjustments to provisional amounts, and the U.S. statutory federal rate is **21%** for fiscal 2019 and subsequent years[40](index=40&type=chunk)[41](index=41&type=chunk) Segment Net Revenues - Six Months Ended (in thousands) | Segment | Dec 30, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | 1-800-Flowers.com Consumer Floral | $193,182 | $176,674 | | BloomNet Wire Service | $47,428 | $40,139 | | Gourmet Food & Gift Baskets | $500,521 | $466,950 | | **Total Net Revenues** | **$740,812** | **$683,442** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting revenue growth across segments, stable gross profit, and strong liquidity [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Net revenues increased **8.4%** to **$740.8 million** for the six-month period, driven by e-commerce growth and segment performance, despite a slight gross margin decline Revenue Growth by Period (in thousands) | Period | Net Revenues | % Change YoY | | :--- | :--- | :--- | | Three Months Ended Dec 30, 2018 | $571,316 | 8.6% | | Six Months Ended Dec 30, 2018 | $740,812 | 8.4% | - E-commerce revenue, representing the majority of sales, increased by **8.2%** for both the three and six-month periods ended Dec 30, 2018, driven by a **6.9% increase** in e-commerce orders and a **1.2% increase** in average order value for the six-month period[103](index=103&type=chunk)[104](index=104&type=chunk) - The Gourmet Food & Gift Baskets segment revenue grew **7.2%** for the six-month period, driven by strong performance at Harry & David, a recovery at Cheryl's Cookies, and growth in the 1-800-Baskets/DesignPac business[109](index=109&type=chunk) - Gross profit margin for the six-month period decreased by **60 basis points** to **43.7%**, reflecting promotional activity, rising labor costs, growth of the Passport free shipping program, and a mix shift in the BloomNet segment[111](index=111&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$257.7 million** cash on hand, positive operating cash flow, and sufficient credit for future operations - At December 30, 2018, the company had working capital of **$186.7 million**, including cash and cash equivalents of **$257.7 million**[132](index=132&type=chunk) - Net cash from operating activities for the six-month period was **$139.6 million**, primarily driven by net income and seasonal working capital changes[134](index=134&type=chunk) - The company repurchased **$13.4 million** of treasury stock during the first six months of fiscal 2019, with **$6.6 million** remaining authorized under the stock repurchase plan as of December 30, 2018[136](index=136&type=chunk)[137](index=137&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on variable-rate debt, with a **50 basis point** increase impacting interest expense by **$0.3 million** - The company is exposed to interest rate risk primarily through its variable-rate long-term debt[146](index=146&type=chunk) - A **50 basis point** increase in interest rates would have resulted in an approximate **$0.3 million** increase in interest expense for the six months ended December 30, 2018[147](index=147&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[148](index=148&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[149](index=149&type=chunk) Part II [Part II. Other Information](index=38&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, and details on the company's equity securities repurchases [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Management believes current legal proceedings will not materially adversely affect the company's financial position or results - Management does not expect pending legal proceedings to have a material adverse effect on the Company's financial condition or results of operations[151](index=151&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported for the period - No material changes to the Company's risk factors were reported for the period[152](index=152&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **1,125,000 shares** for **$13.4 million**, with **$6.6 million** remaining authorized under the plan Issuer Purchases of Equity Securities (in thousands, except per share data) | Period | Total Shares Purchased | Average Price Paid Per Share | Total Shares Purchased as Part of Program | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | :--- | | 08/27/18 - 09/30/18 | 345.6 | $11.66 | 345.6 | $15,957 | | 10/01/18 – 10/28/18 | 318.4 | $11.12 | 318.4 | $12,409 | | 10/29/18 – 11/25/18 | 346.0 | $12.70 | 346.0 | $8,010 | | 11/26/18 – 12/30/18 | 115.0 | $12.31 | 115.0 | $6,591 | | **Total** | **1,125.0** | **$11.89** | **1,125.0** | **N/A** | - As of December 30, 2018, **$6.6 million** remained authorized for repurchase under the company's stock repurchase plan[153](index=153&type=chunk)

Financial Data and Key Metrics Changes - Total revenues grew nearly 9%, reflecting strong holiday and everyday gifting demand [7][13] - Adjusted EBITDA increased by 9.1% to $103.1 million compared to $94.5 million in the prior year [18] - Net income for the quarter was $68.6 million, with EPS at $1.04 per diluted share, compared to $70.7 million and $1.06 per diluted share in the prior year [19][20] - Gross profit margin was 44.6%, a slight decrease of 10 basis points from 44.7% in the prior year [16] Business Segment Data and Key Metrics Changes - Gourmet Food & Gift Baskets segment revenues increased by 8.4% to $440 million, driven primarily by Harry & David [21][22] - Consumer Floral segment revenues rose by 8% to $108.1 million, with a profit margin of 38.5%, down from 38.8% in the prior year [23] - BloomNet segment revenues increased by 15% to $23.4 million, with a profit margin of 52.6%, down from 57.4% in the prior year [24] Market Data and Key Metrics Changes - Companywide new customer growth was nearly 12%, with strong revenue growth from existing customers [9][10] - The company maintained a strong market leadership position in floral gifting, with double-digit gains in new customers [10][11] Company Strategy and Development Direction - The company is focused on digital marketing investments to drive growth in Harry & David and 1-800-Flowers brands [31] - Plans to continue expanding the Passport loyalty program and cross-brand marketing initiatives [32] - The company is exploring acquisition opportunities to enhance scale while maintaining a disciplined approach [37] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth across all business segments, supported by strong customer demand [30] - The company raised its guidance for revenue growth from 5%-7% to 7%-8% for the fiscal year [28] - Management noted the importance of leveraging digital marketing to enhance customer experience and drive sales [33] Other Important Information - The company plans to host an Investor Day in New York City on March 22nd [7] - The effective tax rate for the quarter was 25.4%, down from 29.7% in the prior year [20] Q&A Session Summary Question: How is the company viewing acquisitions given its current scale? - Management indicated a strong position for potential acquisitions, looking for opportunities to enhance scale while remaining disciplined [37] Question: What is the status of affiliated floral shops? - The number of affiliated floral shops remained steady, with no dramatic changes quarter-to-quarter [42] Question: Are new customers joining the Passport program? - There has been double-digit growth in Passport members, with a steady increase in sales from these members [47] Question: How does the company view everyday gifting versus holiday gifting? - Management noted strong growth in everyday gifting, particularly in food brands, and emphasized the importance of cross-brand marketing [49][51] Question: What are the expectations for Valentine's Day marketing? - Management anticipates an aggressive promotional environment for Valentine's Day, focusing on brand strength and customer experience [67]