1-800-FLOWERS.COM(FLWS) - 2025 Q1 - Quarterly Report

Financial Performance - Total consolidated revenues for the first quarter of Fiscal 2025 decreased by 10.0% to $242.1 million, compared to $269.1 million in the same prior year period [58]. - The Company expects total revenues for Fiscal 2025 to be flat to a decrease in the low single digits compared to the prior year [62]. - Adjusted EBITDA for Fiscal 2025 is projected to be in the range of $85 million to $95 million [62]. - Free Cash Flow for Fiscal 2025 is expected to be between $45 million and $55 million [62]. - The net loss for the three months ended September 29, 2024, was $34.2 million, compared to a net loss of $31.2 million for the same period in the prior year [66]. - Adjusted net loss for the three months ended September 29, 2024, was $32.9 million, with an adjusted net loss per common share of $0.51 [70]. - The company reported a net cash used in operating activities of $177.2 million for the three months ended September 29, 2024, primarily due to a net loss and seasonal changes in working capital [87]. - Free cash flow was negative $189.3 million, a decrease of $38.5 million compared to the same period last year, driven by reduced cash flows from operations [88]. - Net cash used in operating activities for the three months ended September 29, 2024, was $(177,241) thousand, an increase from $(143,884) thousand in the prior year, reflecting a worsening operational cash flow situation [97]. Revenue Breakdown - E-commerce revenues decreased by 8.0% to $193,174,000, down from $209,911,000 year-over-year [74]. - The company fulfilled approximately 2.5 million orders through its e-commerce sales channel, a decrease of 6.5% compared to the prior year [77]. - Average order value decreased by 1.5% to $78.25, attributed to a wider selection of more modestly priced items [77]. - BloomNet revenues decreased by 20.1% to $23,075,000, down from $28,870,000 year-over-year [76]. - Gourmet Foods & Gift Baskets segment revenues decreased by 14.4% to $84,003,000 compared to $98,109,000 in the prior year [76]. - Corporate segment revenues decreased by 67.0% to $89,000 from $270,000 year-over-year [76]. - Consumer Floral & Gifts segment net revenues decreased by 4.9% to $X million for the three months ended September 29, 2024, due to macro-economic pressures [78]. - BloomNet segment net revenues decreased by 20.1% during the same period, attributed to soft wholesale product revenues and lower services revenues [78]. - Gourmet Foods & Gift Baskets segment net revenues decreased by 14.4% to $X million, primarily due to lower e-commerce revenues and timing of wholesale shipments [80]. Expenses and Profitability - Gross profit decreased by 9.4% to $92,319,000, with a gross margin of 38.1% compared to 37.9% in the prior year [76]. - EBITDA (non-GAAP) was $(33,943,000), a decline of 31.9% compared to $(24,383,000) in the prior year [76]. - Marketing and sales expenses decreased by 0.5% to $82.1 million, representing 33.9% of net revenues, mainly due to decreased labor costs [82]. - Technology and development expenses increased by 2.2% to $15.6 million, accounting for 6.5% of net revenues, driven by higher maintenance costs [82]. - The company’s profitability measures for segments exclude corporate overhead, depreciation, and other non-core items, focusing on direct controllable revenue and operating expenses [95]. Acquisitions - The Company completed the acquisition of Scharffen Berger for approximately $3.3 million on July 1, 2024, enhancing its Gourmet Foods & Gift Baskets Segment [60]. - The acquisition of Card Isle was completed for $3.6 million on April 3, 2024, expanding the Company's presence in the greeting card category [61]. - The company acquired Scharffen Berger and Card Isle in 2024, but revenues from these acquisitions were not significant during the reporting period [75]. Cash Flow and Capital Management - The company had working capital of $118.7 million, including cash and cash equivalents of $8.4 million, down from $157.9 million and $159.4 million respectively at June 30, 2024 [86]. - Capital expenditures increased to $(12,075) thousand in the third quarter of 2024, compared to $(6,974) thousand in the same quarter of 2023, representing a 73.5% increase [97]. - The company defines free cash flow as net cash from operating activities minus capital expenditures, emphasizing its importance as a liquidity measure for strategic investments and debt management [96]. - The reconciliation of net cash used in operating activities to free cash flow highlights the non-GAAP nature of free cash flow, which should not be viewed in isolation [96]. Market Risks - A 50 basis point increase in current interest rates would result in an additional interest expense of approximately $0.2 million for the company during the three months ended September 29, 2024 [100]. - The company is exposed to market risk from interest rate changes, particularly affecting its cash investments and long-term debt obligations [100]. - The company’s investment strategy primarily involves investment-grade corporate and U.S. government securities to manage cash balances effectively [100].