1-800-FLOWERS.COM(US:FLWS)2025-09-04 13:00Financial Data and Key Metrics Changes - Consolidated fourth quarter revenue declined by 6.7%, with an 8.8% decline in the Consumer Floral and Gifts segment, a 3.6% decline in the Gourmet Foods and Gift Baskets segment, and a 0.6% decline in the BloomNet segment [8] - For the fiscal year, consolidated revenue declined by 8%, including an 8.2% decline in transactions and a 1.1% decline in average order value (AOV) [9] - Fourth quarter gross margin decreased by 290 basis points to 35.5% compared to 38.4% in the prior year [10] - Adjusted EBITDA loss for the fourth quarter was $24.2 million, compared to a loss of $8.8 million in the prior year [11] - Full year adjusted EBITDA was $29.2 million, down from $93.1 million in the prior year [12] Business Line Data and Key Metrics Changes - Consumer Floral and Gifts segment saw an 8.8% revenue decline, primarily due to a 5.6% decrease in transactions [8] - Gourmet Foods and Gift Baskets segment revenue declined by 3.6% [8] - BloomNet segment revenue declined by 0.6% [8] - Multi-branded customers represented 13% of the customer base and 29% of revenues, while Passport members represented 9% of the customer base and 19% of revenues [9] Market Data and Key Metrics Changes - The company had 9.5 million customers at the end of fiscal 2025, with over 900,000 Passport members [9] - 74% of revenue came from existing customers, indicating a decline in customer count in line with revenue decline [9] Company Strategy and Development Direction - The company is focusing on a "celebration strategy" aimed at transforming customer engagement and operational efficiency [6][13] - Strategic priorities include driving cost savings, building a customer-centric organization, expanding reach beyond e-commerce, and enhancing talent and accountability [13][14] - Plans to modernize the customer experience and improve marketing efficiency are central to the strategy [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the company did not keep pace with evolving customer expectations and competition, leading to underperformance [5][6] - The focus is on transforming into a data-driven organization with a clear emphasis on customer retention and marketing efficiency [16][17] - Management expressed optimism about future growth opportunities despite current challenges [23] Other Important Information - The company is engaging an external consultant to identify additional efficiency opportunities [12] - The balance sheet showed net debt of $114 million, up from $31 million a year ago, with a cash balance of $47 million [12][13] Q&A Session Summary Question: Regarding ineffective marketing and technology changes - Management indicated that the focus is shifting to variable contribution margin rather than just revenue, and they are expanding marketing strategies beyond bottom-of-the-funnel approaches [28][30] Question: Competitive dynamics in Consumer Floral - Management noted that competition is general rather than due to a specific bad actor, emphasizing the need for agility in reaching customers through various channels [32][33] Question: Commodity prices normalization - Management confirmed that while cocoa prices remain elevated, many other commodity prices are reverting closer to their mean, with tariffs still presenting a headwind [36][37] Question: Sales performance during major holidays - Mother's Day sales were down year-over-year but aligned with expectations, as the focus shifted to variable contribution margin rather than unprofitable sales [41] Question: Timing of strategic initiatives - Management described the current year as pivotal for setting the foundation for future growth, addressing core business issues, and focusing on customer retention strategies [42][47] Question: CapEx spending and physical retail expansion - Management indicated that CapEx is expected to be slightly down this year, with some investment allocated for physical retail locations [49] Question: Update on retail store performance - The Long Island store is performing well, and the company plans to continue experimenting with pop-up stores and potentially permanent locations based on learnings [57][58]