1-800-FLOWERS.COM(FLWS) - 2025 Q4 - Annual Results

Fiscal 2025 Financial Highlights This section provides an overview of the company's financial performance for the fourth quarter and full fiscal year 2025, including key revenue, profit, and loss metrics Fourth Quarter Performance For the fiscal 2025 fourth quarter, consolidated revenue decreased by 6.7% to $336.6 million, with a decline in gross profit margin and an increased net loss due to a highly promotional sales environment Fiscal 2025 Fourth Quarter Consolidated Financial Performance | Metric | FY25 Q4 (Millions) | FY24 Q4 (Millions) | Change (%) | | :-------------------- | :----------------- | :----------------- | :--------- | | Total Revenues | $336.6 | $360.9 | -6.7% | | Gross Profit Margin | 35.5% | 38.4% | -290 bps | | Operating Expenses | $174.8 | $166.2 | +$8.6 | | Net Loss | ($51.9) | ($20.9) | -148.3% | | Net Loss Per Share | ($0.82) | ($0.32) | -156.3% | - Gross profit margin decreased primarily due to a highly promotional sales environment and deleveraging on the sales decline[3] Full Year Performance For the full fiscal year 2025, total consolidated revenues decreased by 8.0% to $1.69 billion, reporting a significant net loss of ($200.0) million, impacted by a substantial non-cash impairment charge Fiscal Year 2025 Consolidated Financial Performance | Metric | FY25 (Billions/Millions) | FY24 (Billions/Millions) | Change (%) | | :-------------------- | :----------------------- | :----------------------- | :--------- | | Total Revenues | $1.69 Billion | $1.83 Billion | -8.0% | | Gross Profit Margin | 38.7% | 40.1% | -140 bps | | Operating Expenses | $857.1 Million | $736.8 Million | +$120.3 | | Net Loss | ($200.0) Million | ($6.1) Million | -3178.7% | | Net Loss Per Share | ($3.13) | ($0.09) | -3377.8% | | Adjusted Net Loss | ($52.5) Million | $11.6 Million | -552.6% | | Adjusted EBITDA | $29.2 Million | $93.1 Million | -68.7% | - The fiscal year net loss includes a $143.8 million non-cash goodwill and intangible impairment charge, significantly impacting profitability[6] - Excluding costs associated with the new order management system implementation, gross profit margin declined 100 basis points to 39.1% due to a highly promotional sales environment and deleveraging[6] CEO Commentary and Strategic Direction CEO Adolfo Villagomez outlined a strategic shift to become leaner, more agile, customer-centric, and data-driven, focusing on modernizing customer experience and driving operational discipline for future growth - The company aims to become leaner and more agile, putting the customer at the center of operations and using data for smarter decisions[2] - Strategic initiatives include sharpening customer attraction and retention, broadening reach beyond e-commerce, and modernizing the customer experience[2] - The CEO emphasizes driving operational discipline, efficiency, and accountability to position the company for growth and long-term shareholder value[2] Segment Results This section details the financial performance of the company's key segments: Gourmet Foods & Gift Baskets, Consumer Floral & Gifts, and BloomNet, highlighting revenue and margin trends Gourmet Foods & Gift Baskets The Gourmet Foods & Gift Baskets segment experienced revenue declines and decreased gross profit margins in both the fourth quarter and full fiscal year 2025, leading to reduced contribution margins Gourmet Foods & Gift Baskets Segment Performance | Metric | FY25 Q4 (Millions) | FY24 Q4 (Millions) | Q4 Change (%) | FY25 (Millions) | FY24 (Millions) | FY Change (%) | | :-------------------------- | :----------------- | :----------------- | :------------ | :-------------- | :-------------- | :------------ | | Revenues | $101.4 | $105.2 | -3.6% | $810.9 | $874.3 | -7.2% | | Gross Profit Margin | 26.0% | 30.0% | -400 bps | 37.6% | 38.3% | -70 bps | | Adjusted Segment Contribution Margin Loss (Q4) | ($19.0) | ($14.4) | -31.9% | | | | | Adjusted Segment Contribution Margin (FY) | | | | $58.8 | $85.0 | -30.8% | - Gross profit margin decline in Q4 was attributed to higher input costs and deleveraging on sales decline[5] - Full fiscal year gross profit margin, excluding order management system implementation issues, declined 70 basis points[5] Consumer Floral & Gifts The Consumer Floral & Gifts segment saw declines in both revenue and gross profit margin for the fourth quarter and full fiscal year 2025, primarily due to deleveraging on reduced sales Consumer Floral & Gifts Segment Performance | Metric | FY25 Q4 (Millions) | FY24 Q4 (Millions) | Q4 Change (%) | FY25 (Millions) | FY24 (Millions) | FY Change (%) | | :-------------------------- | :----------------- | :----------------- | :------------ | :-------------- | :-------------- | :------------ | | Revenues | $211.2 | $231.6 | -8.8% | $776.8 | $849.8 | -8.6% | | Gross Profit Margin | 38.5% | 40.8% | -230 bps | 39.3% | 40.8% | -150 bps | | Adjusted Segment Contribution Margin (Q4) | $17.4 | $25.7 | -32.2% | | | | | Adjusted Segment Contribution Margin (FY) | | | | $50.5 | $87.7 | -42.4% | - Gross profit margin decreased due to deleveraging on the sales decline in both the fourth quarter and full fiscal year[7] BloomNet BloomNet experienced a slight revenue decline in Q4 and a more significant decrease for the full fiscal year 2025, with varying gross profit margin trends and a decline in segment contribution margin BloomNet Segment Performance | Metric | FY25 Q4 (Millions) | FY24 Q4 (Millions) | Q4 Change (%) | FY25 (Millions) | FY24 (Millions) | FY Change (%) | | :-------------------------- | :----------------- | :----------------- | :------------ | :-------------- | :-------------- | :------------ | | Revenues | $24.2 | $24.4 | -0.6% | $98.7 | $107.8 | -8.4% | | Gross Profit Margin | 46.9% | 49.7% | -280 bps | 48.5% | 48.2% | +30 bps | | Adjusted Segment Contribution Margin (Q4) | $6.5 | $7.8 | -16.7% | | | | | Adjusted Segment Contribution Margin (FY) | | | | $29.3 | $33.8 | -13.3% | - Q4 gross profit margin decreased due to higher florist fulfillment costs and rebates[7] - Full fiscal year gross profit margin increased, benefiting from lower florist rebates[7] Fiscal 2026 Strategic Outlook Fiscal Year 2026 is a pivotal period for 1-800-FLOWERS.COM, Inc. to establish a foundation for long-term growth by transforming into a customer-centric, data-driven organization aligned with its Celebrations Wave strategy - Fiscal Year 2026 will focus on foundation setting, transforming into a customer-centric, data-driven organization[8] - Strategic priorities include driving cost savings and organizational efficiency, building a customer-centric and data-driven organization, broadening reach into new channels, and strengthening the team[8][10] - The company aims to support its multi-year Celebrations Wave strategy and fuel future growth through these foundational steps[8] Non-GAAP Financial Measures Definitions This section provides definitions and explanations for the non-GAAP financial measures used by the company to supplement its GAAP results and provide additional insights into performance EBITDA and Adjusted EBITDA EBITDA is defined as net income (loss) before interest, taxes, depreciation, and amortization, with Adjusted EBITDA further adjusting for specific items to enhance comparability and serve as a key performance indicator - EBITDA is Net Income (Loss) before interest, taxes, depreciation, and amortization[12] - Adjusted EBITDA includes adjustments for stock-based compensation, NQDC investment appreciation/depreciation, and other comparability items[12] - These non-GAAP measures are used for evaluating performance, determining incentive compensation, credit agreement compliance, and acquisition pricing[12] Segment Contribution Margin and Adjusted Segment Contribution Margin Segment Contribution Margin represents earnings before interest, taxes, depreciation, amortization, and corporate overhead allocation, with Adjusted Segment Contribution Margin including further adjustments for comparability to provide insights into segment performance - Segment Contribution Margin is earnings before interest, taxes, depreciation, amortization, and corporate overhead allocation[13] - Adjusted Segment Contribution Margin includes adjustments for items affecting period-to-period comparability[13] - These measures offer meaningful information about business segment performance by reflecting direct controllable revenue and operating expenses[13] Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share Adjusted Net Income (Loss) and its per-share equivalent are GAAP net income (loss) measures adjusted for specific items to enhance period-to-period comparability and provide a clearer view of underlying operating performance - Adjusted Net Income (Loss) and Per Common Share metrics are adjusted for items affecting period-to-period comparability[15] - These measures are considered meaningful because they increase the comparability of results across different periods[15] Free Cash Flow Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures, serving as a liquidity measure to indicate cash available for investments, acquisitions, and balance sheet strengthening - Free Cash Flow is calculated as net cash provided by (used in) operating activities minus capital expenditures[16] - This liquidity measure provides insight into cash available for investments, acquisitions, balance sheet improvements, and shareholder returns[16] About 1-800-FLOWERS.COM, Inc. 1-800-FLOWERS.COM, Inc. is a leading e-commerce provider of thoughtful expressions, operating a diverse portfolio of brands and industry services, recognized for its trustworthiness and workplace environment - 1-800-FLOWERS.COM, Inc. is a leading provider of thoughtful expressions, inspiring customers to connect and build relationships[17] - The company's e-commerce platform features a family of brands including 1-800-Flowers.com®, Harry & David®, Cheryl's Cookies®, and more[17] - It operates BloomNet®, an international floral and gift industry service provider, and has been recognized among America's Most Trustworthy Companies and Most Admired Workplaces[17] Special Note Regarding Forward-Looking Statements This section cautions that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, advising investors to refer to SEC filings for detailed risk factors - Forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from expectations[19] - The company undertakes no obligation to publicly update any forward-looking statements[19] - Investors should refer to the company's SEC filings, including Form 10-K and 10-Q, for a detailed description of risk factors[19] Condensed Consolidated Financial Statements This section presents the company's condensed consolidated balance sheets, statements of operations, and statements of cash flows, offering a snapshot of its financial position and performance Condensed Consolidated Balance Sheets The condensed consolidated balance sheets show a decrease in total assets from $1,032.6 million in FY24 to $772.6 million in FY25, primarily due to reduced cash and goodwill impairment, alongside declines in total liabilities and stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 29, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Cash and cash equivalents | $46,502 | $159,437 | | Total current assets | $282,727 | $385,732 | | Goodwill | $37,625 | $156,537 | | Trademarks with indefinite lives | $86,673 | $111,473 | | Total assets | $772,617 | $1,032,648 | | Total current liabilities | $221,386 | $227,819 | | Long term debt, net | $134,764 | $177,113 | | Total liabilities | $504,335 | $566,306 | | Total stockholders' equity | $268,282 | $466,342 | - Goodwill decreased significantly from $156.5 million to $37.6 million, reflecting the impairment charge[22] - Cash and cash equivalents decreased by over 70% year-over-year[22] Consolidated Statements of Operations The consolidated statements of operations reveal declining total net revenues and gross profit for both the quarter and full fiscal year 2025, with significantly increased operating expenses and net loss primarily due to impairment charges Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | FY25 Q4 | FY24 Q4 | FY25 | FY24 | | :-------------------------------- | :------ | :------ | :----- | :----- | | Total net revenues | $336,622 | $360,912 | $1,685,658 | $1,831,421 | | Gross profit | $119,361 | $138,411 | $652,272 | $734,753 | | Total operating expenses | $174,840 | $166,227 | $857,085 | $736,825 | | Operating loss | ($55,479) | ($27,816) | ($204,813) | ($2,072) | | Net loss | ($51,907) | ($20,867) | ($199,993) | ($6,105) | | Basic and diluted net loss per common share | ($0.82) | ($0.32) | ($3.13) | ($0.09) | - Goodwill impairment of $119.0 million and intangible impairment of $24.8 million were recorded in FY25, contributing significantly to the operating loss[24] - E-Commerce revenues decreased from $1,614.2 million in FY24 to $1,464.4 million in FY25[24] Consolidated Statement of Cash Flows The consolidated statement of cash flows indicates a shift from net cash provided by operating activities in FY24 to net cash used in FY25, with continued cash usage in investing and financing activities, resulting in a substantial decrease in cash and cash equivalents Consolidated Statement of Cash Flows Highlights (in thousands) | Metric | FY25 | FY24 | | :------------------------------------------ | :------- | :------- | | Net cash (used in) provided by operating activities | ($26,363) | $94,999 | | Net cash used in investing activities | ($44,463) | ($42,304) | | Net cash used in financing activities | ($42,109) | ($20,065) | | Net change in cash and cash equivalents | ($112,935) | $32,630 | | Cash and cash equivalents, End of period | $46,502 | $159,437 | - The company used $26.4 million in cash from operating activities in FY25, a significant reversal from providing $95.0 million in FY24[25] - Repayment of bank borrowings ($140.0 million) exceeded proceeds from bank borrowings ($110.0 million) in FY25[25] Reconciliations of Non-GAAP Financial Measures This section provides detailed reconciliations of GAAP financial measures to their non-GAAP counterparts, including adjusted net income (loss), adjusted EBITDA, and free cash flow, for enhanced comparability Reconciliation of Net Loss to Adjusted Net Income (Loss) This reconciliation details adjustments made to GAAP net loss to derive adjusted net income (loss) for both the fourth quarter and full fiscal year, including restructuring costs, system implementation costs, and impairment charges Reconciliation of Net Loss to Adjusted Net Income (Loss) (in thousands, except per share data) | Metric | FY25 Q4 | FY24 Q4 | FY25 | FY24 | | :------------------------------------------ | :------ | :------ | :----- | :----- | | Net loss | ($51,907) | ($20,867) | ($199,993) | ($6,105) | | Add: Restructuring cost/Severance | $5,115 | $147 | $5,823 | $2,564 | | Add: System implementation costs | — | — | $13,401 | — | | Add: Goodwill and intangible impairment | $5,603 | — | $143,823 | $19,762 | | Deduct: Income tax effect on adjustments | ($2,639) | ($2,541) | ($15,572) | ($6,079) | | Adjusted net income (loss) (non-GAAP) | ($43,828) | ($21,792) | ($52,518) | $11,611 | | Basic and diluted adjusted net income (loss) per common share (non-GAAP) | ($0.69) | ($0.34) | ($0.82) | $0.18 | - Adjusted net loss for FY25 was ($52.5) million, compared to an adjusted net income of $11.6 million in FY24[31] Reconciliation of Net Loss to Adjusted EBITDA This reconciliation outlines the adjustments from GAAP net loss to Adjusted EBITDA for both the fourth quarter and full fiscal year, incorporating items such as interest, taxes, depreciation, amortization, stock-based compensation, and impairment charges Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | FY25 Q4 | FY24 Q4 | FY25 | FY24 | | :------------------------------------------ | :------ | :------ | :----- | :----- | | Net loss | ($51,907) | ($20,867) | ($199,993) | ($6,105) | | EBITDA | ($42,148) | ($14,642) | ($151,195) | $51,680 | | Add: Stock-based compensation | $2,785 | $3,047 | $11,891 | $10,688 | | Add: Compensation charge related to NQDC Plan investment appreciation | $4,399 | $1,192 | $5,423 | $6,904 | | Add: System implementation costs | — | — | $13,401 | — | | Add: Goodwill and intangible impairment | $5,603 | — | $143,823 | $19,762 | | Adjusted EBITDA | ($24,246) | ($8,787) | $29,166 | $93,067 | - Adjusted EBITDA for FY25 was $29.2 million, a significant decrease from $93.1 million in FY24[33] - The reconciliation highlights the impact of non-recurring charges like goodwill and intangible impairment ($143.8 million in FY25) on GAAP net loss[33] Reconciliation of Net Cash (Used in) Provided by Operating Activities to Free Cash Flow This section reconciles net cash provided by (used in) operating activities to free cash flow by subtracting capital expenditures, revealing a negative free cash flow for fiscal year 2025, a reversal from the prior year Reconciliation of Net Cash (Used in) Provided by Operating Activities to Free Cash Flow (in thousands) | Metric | FY25 | FY24 | | :------------------------------------------ | :-------- | :-------- | | Net cash (used in) provided by operating activities | ($26,363) | $94,999 | | Capital expenditures | ($41,463) | ($38,632) | | Free cash flow | ($67,826) | $56,367 | - Free cash flow for FY25 was ($67.8) million, compared to $56.4 million in FY24, indicating a significant decrease in cash generated after capital expenditures[37]