1-800-FLOWERS.COM(FLWS) - 2026 Q2 - Quarterly Report

Financial Performance - The Company reported a net income of $70,553,000 for the three months ended December 28, 2025, compared to $64,348,000 for the same period in 2024, representing an increase of approximately 3.8%[89] - Adjusted EBITDA for the three months ended December 28, 2025, was $98,118,000, down from $116,278,000 in the prior year, indicating a decrease of about 15.6%[89] - Adjusted net income for the three months ended December 28, 2025, was $76,661,000, compared to $69,180,000 in the same period of 2024, reflecting an increase of approximately 10.5%[92] - Basic and diluted adjusted net income per common share for the three months ended December 28, 2025, was $1.20, compared to $1.08 for the same period in 2024, marking an increase of about 11.1%[92] - Total net revenues for the three months ended December 28, 2025, were $702,179, a decrease of 9.5% compared to $775,492 for the same period in 2024[96] - Gross profit for the three months ended December 28, 2025, was $295,466, down 12.5% from $337,585 in the prior year[96] - Free cash flow for the six months ended December 28, 2025, was $156,619, an increase from $128,284 in the prior year[102] Strategic Initiatives - The Company aims to transform into a customer-centric, data-driven organization to fuel future growth in fiscal 2026[81] - Strategic priorities include driving cost savings, building a customer-centric organization, broadening reach into new channels, and enhancing team talent and accountability[82][83] - The Company is focusing on organizational efficiency and cost savings as part of its long-term growth strategy[82][83] - The Celebrations Passport® loyalty program aims to deepen customer relationships by offering free standard shipping and no service charges on eligible products[79] - The Company is committed to enhancing its e-commerce platform and expanding its brand portfolio to drive revenue growth[79] Revenue and Segment Performance - Consumer Floral & Gifts segment revenues decreased by 22.7% to $181,245 for the three months ended December 28, 2025, compared to $234,349 in the previous year[96] - Gourmet Foods & Gift Baskets segment revenues decreased by 3.8% to $498,989 for the three months ended December 28, 2025, compared to $518,454 in the prior year[96] - BloomNet segment revenues decreased by 3.1% to $22,124 for the three months ended December 28, 2025, compared to $22,837 in the previous year[96] - Corporate segment revenues decreased by 21.2% to $89 for the three months ended December 28, 2025, compared to $113 in the prior year[96] - E-commerce revenues decreased by 12.1% and 12.2% during the three and six months ended December 28, 2025, respectively, attributed to a decline in demand across segments[107] - Consumer Floral & Gifts orders through the e-commerce sales channel decreased by 26.0% and 23.0% during the three and six months ended December 28, 2025, respectively[112] - BloomNet revenues decreased by 3.1% and 1.4% during the three and six months ended December 28, 2025, primarily due to lower membership and transaction revenues[113] - Gourmet Foods & Gift Baskets segment revenues decreased by 3.8% and 4.4% during the three and six months ended December 28, 2025, primarily due to lower e-commerce revenue[115] Cost and Expense Management - Marketing and sales expenses decreased by 16.5% to $156.1 million for the three months and by 16.3% to $225.2 million for the six months ended December 28, 2025, compared to the prior year[124] - General and administrative expenses increased by 35.2% to $37.1 million for the three months and by 21.9% to $68.2 million for the six months ended December 28, 2025, primarily due to higher professional fees and severance costs[128] - The company reported a significant increase in stock-based compensation expenses, which decreased by 36.8% to $2,295 for the three months ended December 28, 2025, compared to $3,629 in the prior year[96] Financial Risks and Obligations - The company is exposed to interest rate risk, with a potential impact of a 50 basis point increase in interest rates resulting in an additional interest expense of approximately $0.4 million for the three months and $0.7 million for the six months ended December 28, 2025[152] - The company anticipates challenges in achieving revenue and profitability, managing operating expenses, and integrating acquired businesses[150] - The company has outlined risks that could materially affect future results, including supply chain constraints and competition from existing and new competitors[150] - The company’s total contractual obligations amount to $74.925 million, with significant purchase commitments of $15.131 million due in fiscal 2026[144] - The company’s long-term debt obligations and operating lease obligations are detailed in its credit agreement and lease notes, respectively[145] Accounting and Reporting - The company recognizes the limitations of non-GAAP financial measures and emphasizes the importance of GAAP results in evaluating performance[87] - The company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, requiring management to make estimates and assumptions[146] - The company has made no significant changes to its critical accounting estimates related to goodwill and other intangible assets since June 29, 2025[146] - The company’s forward-looking statements are subject to various risks and uncertainties that could lead to actual results differing from expectations[149] - The company has not committed to publicly updating forward-looking statements, but advises investors to consult further disclosures in its SEC filings[151]