1-800-FLOWERS.COM(US:FLWS)2024-05-02 17:57Financial Data and Key Metrics Changes - The company's third quarter revenue declined by 9.1% compared to the previous year, attributed to lower wholesale volume and BloomNet revenue [8][44][145] - The net loss for the quarter was $16.9 million, or $0.26 per share, which included severance charges of $2.4 million [27][54] - Adjusted EBITDA loss was $5.7 million, essentially flat compared to the adjusted EBITDA loss of $5.5 million a year ago [28][44] - Gross margin improved by 300 basis points to 36.6%, driven by lower freight costs and inventory optimization efforts [50][120] Business Line Data and Key Metrics Changes - E-commerce revenues declined by 4.5%, but gross profit margin expanded by 530 basis points to 29.9% [29] - The Gourmet Food and Gift Baskets segment saw revenues decline by 11.4% to $131 million, largely due to a drop in wholesale business [55] - Consumer Floral and Gifts segment revenue decreased by 5.1% to $221.2 million, with gross profit margin expanding to 39.3% [57] Market Data and Key Metrics Changes - The company noted a bifurcation in consumer spending, with higher-income customers continuing to spend on premium offerings while lower-income customers are more cautious [14][19] - The company experienced a decline in orders from wholesale partners, particularly around Easter, impacting overall sales [31][79] Company Strategy and Development Direction - The company is focused on relationship innovation and enhancing customer experience through new product offerings and improved pricing strategies [3][13] - The acquisition of Card Isle aims to enhance personalized greeting card offerings, expanding the gifting experience [17] - The company is strategically expanding same-day delivery options to meet consumer demand for convenience [7][45] Management's Comments on Operating Environment and Future Outlook - Management highlighted a complex consumer environment, with inflation and rising interest rates affecting lower-income consumers more significantly [14][19] - The company reaffirmed its guidance, expecting total revenues to decline in the range of 7% to 9% for the fiscal year [33] - Management expressed optimism about gross margin recovery and the potential for improved performance in fiscal 2025 due to favorable weather conditions for pear crops [46][120] Other Important Information - The company has been recognized as one of America's most trustworthy companies by Newsweek, reflecting its commitment to customer relationships [61] - The company executed a stock buyback program, repurchasing $9.2 million of its stock through the first three quarters of the fiscal year [59] Q&A Session Summary Question: What is the outlook on commodity prices? - Management acknowledged volatility in commodity prices, particularly cocoa, but noted that they have locked in prices for fiscal 2024 and 2025, providing some protection against fluctuations [38][66] Question: What are the economics of same-day delivery compared to other orders? - Management indicated that same-day delivery has different economics, and they are leveraging their fulfillment network to improve efficiency and reduce costs [70][95] Question: What is the outlook for wholesale orders for the upcoming holiday season? - Management indicated that they expect orders to be up for the holiday season, providing a potential tailwind, although they do not anticipate returning to pre-pandemic highs [98][100] Question: How is the workforce reduction affecting company morale? - Management stated that while workforce reductions are difficult, they are necessary for reallocating resources to growth opportunities, and they continue to hire in key areas [108][142] Question: What is the average order value and success with multi-branded bundles? - The average order value increased to $79, driven by higher-priced bundles appealing to affluent consumers, and management reported success with multi-branded offerings [111][113]