1 800 FLOWERS COM INC
For the period ended Mar 30, 2025. Filed May 9, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 30, 2025 · Filed May 9, 2025
FLWS$2.58-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-29; filed 2025-01-31.
0001437749-25-002365
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-30; filed 2025-05-09.
0001084869-25-000007
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 141 current paragraphs.
53 unchanged; 44 reworded; 42 added; 9 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 24 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (42)
Current report
Overall, broader macro-economic conditions continue to impact our consumers. We have seen consumer confidence and sentiment decline in response to various uncertainties, including potential tariff impacts on inflation, a softening labor market, and shifting economic policies. Throughout the first nine months of fiscal 2025, we have seen sales challenged by a reduction in everyday or just-because gift giving and although customers are more inclined to shop during the holidays, they are shopping later in the season. Total consolidated revenues decreased 12.6% to $331.5 million and 8.3% to $1,349.0 million during the three and nine months ended March 30, 2025 respectively, compared with total consolidated revenues of $379.4 million and $1,470.5 million in the same prior year periods.
Current report
The Company’s exposure to increased tariffs is difficult to identify with certainty as the breadth, extent and level of tariffs remains uncertain. Besides the impact on customer buying habits, which affect revenues, the tariffs as currently in effect primarily impact the Company’s cost of revenues, particularly with respect to products that the Company sources from China. We currently estimate our tariff exposure to be approximately $55.0 million with the most significant impact on our personalization and wholesale businesses. To manage the impact of tariffs on our costs, we are continuing to consider sourcing opportunities outside China, working with existing vendors on concessions, changing componentry, and modifying our assortment. A last measure would be to pass through some amount of the tariff cost in pricing.
Current report
Goodwill and Intangible Impairment
Current report
During the quarter ended March 30, 2025, the Company evaluated whether events or circumstances had changed such that it was more likely than not that the fair value of its goodwill, intangible and other long-lived assets were less than their carrying amounts. After consideration of current operating results, changes in macro-economic conditions, and a decline in the Company’s market capitalization, the Company concluded that a triggering event had occurred for its Consumer Floral & Gifts reporting unit. As such, the Company performed an impairment test of the reporting unit’s goodwill, intangibles and long-lived assets as of March 30, 2025, and recorded a non-cash goodwill and intangible impairment charge of$138.2 million, comprised of $113.4 million related to goodwilland$24.8 million attributable to the PersonalizationMall tradename (indefinite-lived intangible asset). The Company concluded that definite-lived and other long-lived assets of the reporting unit were not impaired.
Current report
Celebrations Wave
Current report
On May 8, 2025, the Company announced Celebrations Wave, a comprehensive evolution of the Company that begins with transforming the customer journey into a sentiment-led experience. Celebrations Wave strives to advance the Company’s vision of becoming the premier relationship destination for heartfelt expressions, with a business model that aligns with future technological advancements and consumer purchasing preferences. This strategic plan seeks to increase revenues of both every day and holiday occasions, optimize operations, lower costs, and accelerate the pace of change, leading to higher profitability and cash flows over time, positioning the Company for sustainable and profitable growth. As part of this initiative, we are implementing cost savings reductions, which may result in restructuring and other charges totaling between $10.0 million and $15.0 million, before taxes, mainly consisting of employee-related costs, asset write-offs and other costs to implement these initiatives of which approximately $0.7 million was incurred during the quarter ended March 30, 2025, with the remainder expected to be incurred in the next twelve months.
Current report
Given the rapidly evolving macroeconomic landscape and the uncertainties that continue to shape the near-term outlook, the Company has made the decision to withdraw its near-term guidance. This decision reflects the unpredictable external factors affecting the current macro environment and the management team’s focus on executing a transformational strategy that positions the Company for long-term success.
Current report
During the three and nine months ended March 30, 2025, the gross profit percentage decreased 490 basis points and 110 basis points, respectively, compared to the same periods of the prior year. The gross profit percentage declines were primarily within Consumer Floral and Gifts and the Gourmet Foods and Gift Baskets segments, partially offset by an increase in the Company's BloomNet segment.
Current report
Marketing and sales expenses were essentially in-line with the prior year, during the three and nine months ended March 30, 2025. Marketing and sales expenses as a percentage of revenues increased over the prior year due to increased advertising costs needed to support sales due to a competitive environment.
Current report
Goodwill and intangible impairment
Current report
During the quarter ended March 30, 2025, the Company recorded a non-cash goodwill and intangible impairment charge of $138.2 million, comprised of $113.4 million related to goodwill for its Consumer and Floral & Gifts segment and $24.8 million attributable to the PersonalizationMall tradename.
Current report
In fiscal 2024, based on the impairment assessment performed for the quarter ended December 31, 2023, the Company had recorded a non-cash impairment charge of $19.8 million to reduce the recorded carrying value of the PersonalizationMall tradename to its estimated fair value at that time.
Current report
Other expense (income), net
Current report
•Long-term debt obligations - payments due under the Company's credit agreement (see Note 10 – Long-term debt, net in Item 1 for details and payments due by period).
Current report
•Operating lease obligations - payments due under the Company’s operating leases (see Note 8 – Leases in Item 1 for details and payments due by period for the long-term operating leases).
Current report
•Purchase commitments - consisting primarily of inventory and IT-related equipment purchase orders and license agreements made in the ordinary course of business – see below for the contractual payments due by period.
Current report
Goodwill & Intangible Assets Assessment and Impairment
Current report
Interim Impairment Evaluation
Current report
During the quarter ended March 30, 2025, the Company evaluated whether events or circumstances had changed such that it was more likely than not that the fair value of its goodwill, intangible and other long-lived assets were less than their carrying amounts. After consideration of current operating results, changes in macro-economic conditions, and a decline in the Company’s market capitalization, the Company concluded that a triggering event had occurred for its Consumer Floral & Gifts reporting unit. As such, the Company performed an impairment test of the reporting unit’s goodwill, intangibles and long-lived assets as of March 30, 2025.
Current report
Impairment Assessments – Goodwill and Intangibles
Current report
The Company performed its goodwill impairment test by comparing the fair value of its Consumer Floral and Gifts reporting unit to its respective carrying value. The Company estimated the fair value of the Consumer Floral and Gifts reporting unit using an equal weighting of the income and market approaches, and a discount rate of 14.5%. The Company used industry accepted valuation models and set criteria that were reviewed and approved by various levels of management. Under the income approach, the Company used a discounted cash flow methodology that required management to make significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, perpetual growth rates, and long-term discount rates, among others. For the market approach, the Company used the guideline public company method. Under this method, the Company utilized information from comparable publicly traded companies with similar operating and investment characteristics as the reporting units, to create valuation multiples that were applied to the operating performance of the reporting unit being tested, in order to obtain their respective fair values. The Company also reconciled the aggregate fair values of its reporting units to its current market capitalization.
Current report
The Company’s impairment test for indefinite-lived intangible assets encompassed calculating a fair value of the indefinite-lived intangible asset and comparing that result to its carrying value. To determine fair value of indefinite-lived intangible assets, the Company used an income approach, the relief-from-royalty method. This method assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to obtain the rights to use the comparable asset. Indefinite-lived intangible assets’ fair values require significant judgments in determining both the assets’ estimated cash flows as well as the appropriate discount and royalty rates applied to those cash flows to determine fair value.
Current report
The Company’s impairment test for definite-lived and other long-lived assets was performed through a recoverability test, comparing projected undiscounted cash flows from the use and eventual disposition of the asset or asset group to its carrying value.
Current report
Based on the impairment assessment performed for the period ended March 30, 2025, the Company recorded a non-cash goodwill and intangible impairment charge of $138.2 million, comprised of $113.4 million attributable to goodwill and $24.8 million attributable to the PersonalizationMall tradename within the same reporting unit. The Company concluded that definite-lived and other long-lived assets of the reporting unit were not impaired.
Current report
Income Taxes
Current report
Realizability of Deferred Tax Assets
Current report
During the quarter ended March 30, 2025, in assessing the realizability of deferred tax assets in accordance with ASC 740, management considered both positive and negative evidence. As of the reporting date, the Company was in a three-year cumulative loss position, which is considered significant negative evidence under the accounting standards. The Company has not developed any tax planning strategies that would provide an additional source of taxable income, and the goodwill and intangible impairment charge that was recorded during the quarter ended March 30, 2025 reduced the previously available deferred tax liabilities that had been relied upon to support the realization of deferred tax assets. As a result, the Company concluded that it was not more likely than not that a portion of its deferred tax assets will be realized and included a $24.9 million valuation allowance in its projected annual effective tax rate. In addition, the Company placed a specific valuation allowance of $3.4 million on its charitable contribution carryforward as a discrete item in the third quarter of fiscal 2025. As of March 30, 2025, the Company had valuation allowances of approximately $26.7 million, of which $20.5 million was recorded during the three months ended March 30, 2025, primarily related to net operating losses, charitable contributions, and deferred tax assets that are not more likely than not realizable. The Company will continue to monitor all relevant factors in evaluating the need for a valuation allowance and will reassess its position in future reporting periods as facts and circumstances evolve.
Current report
•the Company’s ability:
Current report
◦to achieve revenue and profitability;
Current report
◦to leverage its operating platform and reduce operating expenses;
Current report
◦to manage the seasonality of its business;
Current report
◦to cost effectively acquire and retain customers;
Current report
◦to successfully integrate acquired businesses and assets;
Current report
◦to reduce working capital requirements and capital expenditures;
Current report
◦to mitigate the impact of supply chain cost and capacity constraints;
Current report
◦to compete against existing and new competitors;
Current report
◦to manage expenses associated with sales and marketing and necessary general and administrative and technology investments;
Current report
◦to address the effects of changes in accounting policies, practices, or assumptions, including changes that could potentially require future impairment charges;
Current report
◦to successfully execute its strategic initiatives; and
Current report
◦to reduce promotional activities and achieve more efficient marketing programs.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Removed paragraphs (9)
Previous report
Overall, broader macro-economic conditions continue to impact our consumers as they continue to moderate their discretionary spending. Throughout the first half of fiscal 2025, we have seen sales challenged by a reduction in everyday or just-because gift giving. As our second quarter contains the Thanksgiving to Christmas holiday season, we anticipated sales trends to improve as our gifting business has historically proven to be more resilient during holiday periods. However, due to a more condensed holiday season with fewer shopping days between Thanksgiving and Christmas, we anticipated consumers to begin their holiday shopping later in the season. In line with our expectations, consumer spending increased later in the season, but not to anticipated levels. Total consolidated revenues decreased 5.7% to $775.5 million and 6.7% to $1,017.6 million during the three and six months ended December 29, 2024 respectively, compared with total consolidated revenues of $822.1 million and $1,091.1 million in the same prior year periods.
Previous report
Intangible Impairment
Previous report
Based on the Company's performance during the fiscal second quarter, the Company is updating its fiscal 2025 guidance as outlined below. TheCompany expects its revenue trend to improve as the fiscal year progresses, benefitting from its Relationship Innovation initiatives that have expanded the Company's offerings, broadened price points and enhanced the user experience.
Previous report
As a result, for fiscal 2025 the Company nowexpects:
Previous report
During the three months ended December 29, 2024, the gross profit percentage was in-line with the same period of the prior year. During the six months ended December 29, 2024, the gross profit percentage increased 20 basis points compared to the same period of the prior year, which was driven by increased gross profit percentage in the BloomNet and Gourmet Foods & Gift Baskets segments.
Previous report
Gross profit by segment follows:
Previous report
Marketing and sales expense decreased 0.8% and 0.7% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, mainly related to decreased labor costs, which was partially offset by increased advertising costs due to a competitive environment.
Previous report
Intangible impairment
Previous report
Other income, net
Reworded paragraphs (44)
Previous wording
This“Management’s Discussion and Analysis of Financial Condition and Results of Operations”* ("MD&A") is intended to provide an understanding of our financial condition, change in financial condition, cash flow, liquidity, and results of operations. The following MD&A discussion should be read in conjunction with the consolidated financial statements and notes to those statements that appear elsewhere in this Form 10-Q and in the Company*’sAnnual Report on Form 10-K for the fiscal year ended June 30, 2024. The following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed or referred to in the forward-looking statements. Factors that could cause or contribute to any differences include, but are not limited to, those discussed under the caption“Forward-Looking Information and Factors That May Affect Future Results,”* under Part I, Item 1A, of the Company*’sAnnual Report on Form 10-K for the fiscal year ended June 30, 2024 under the heading“Risk Factors”* and Part II-Other Information, Item 1A in this Form 10-Q.*
Current wording
This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” ("MD&A") is intended to provide an understanding of our financial condition, change in financial condition, cash flow, liquidity, and results of operations. The following MD&A discussion should be read in conjunction with the consolidated financial statements and notes to those statements that appear elsewhere in this Form 10-Q and in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024. The following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed or referred to in the forward-looking statements. Factors that could cause or contribute to any differences include, but are not limited to, those discussed under the caption “Forward-Looking Information and Factors That May Affect Future Results,” under Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 under the heading “Risk Factors” and Part II-Other Information, Item 1A in this Form 10-Q.
Previous wording
1-800-FLOWERS.COM, Inc. and its subsidiaries (collectively, the “Company”) is a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships. The Company’s e-commerce business platform features our all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, PersonalizationMall.com®, Shari’s Berries®, FruitBouquets.com®, Things Remembered®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, Scharffen Berger®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge on eligible products across our portfolio of brands, the Company strives to deepen relationships with customers. The Company also operates BloomNet®, an international floral and gift industry service provider offering a broad range of products and services designed to help its members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; Alice’s Table®, a lifestyle business offering fully digital on demand floral, culinary and other experiences to guests across the country; and Card Isle®, an e-commerce greeting card service.
Current wording
1-800-FLOWERS.COM, Inc. and its subsidiaries (collectively, the “Company”) is a leading provider of gifts designed to help inspire customers to share more, connect more, and build more and better relationships. The Company’s e-commerce business platform features our all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, Personalization Mall.com®, Shari’s Berries®, FruitBouquets.com®, Things Remembered®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, Scharffen Berger®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge on eligible products across our portfolio of brands, the Company strives to deepen relationships with customers. The Company also operates BloomNet®, an international floral and gift industry service provider offering a broad range of products and services designed to help its members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; Alice’s Table®, a lifestyle business offering fully digital on demand floral, culinary and other experiences to guests across the country; and Card Isle®, an e-commerce greeting card service.
Previous wording
For additional information, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” of ourAnnual Report on Form 10-K for the fiscal year ended June 30, 2024.
Current wording
For additional information, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.
Previous wording
During the quarter ended December 31, 2023, as a result of a decline in the actual and projected revenue for the Company’s PersonalizationMall tradename, as well as a higher discount rate resulting from the higher interest rate environment, the Company determined that an impairment assessment was required for this tradename. This assessment resulted in the Company recording a non-cash impairment charge of $19.8 million to reduce the recorded carrying value of the PersonalizationMall tradename. SeeNote 6 – Goodwill and other intangibles, net in Item 1 for further information.
Current wording
In the prior fiscal year, during the quarter ended December 31, 2023, as a result of a decline in the actual and projected revenue for the Company’s PersonalizationMall tradename, as well as a higher discount rate resulting from the higher interest rate environment, the Company determined that an impairment assessment was required for this tradename. This assessment resulted in the Company recording a non-cash impairment charge of $19.8 million to reduce the recorded carrying value of the PersonalizationMall tradename. See Note 6 – Goodwill and other intangibles, net in Item 1 for further information.
Previous wording
On July 1, 2024, the Company completed its acquisition of certain assets of Scharffen Berger, a chocolate manufacturing company, expanding the Company's product offerings in the Gourmet Foods & Gift Baskets Segment. The Company used cash on its balance sheet to fund the approximately $3.3 million purchase – See Note 3 – Acquisitions in Item 1.
Current wording
On July 1, 2024, the Company completed its acquisition of certain assets of Scharffen Berger, a chocolate manufacturing company, expanding the Company's product offerings in the Gourmet Foods & Gift Baskets Segment. The Company used cash on its consolidated balance sheet to fund the approximately $3.3 million purchase – See Note 3 – Acquisitions in Item 1.
Previous wording
On April 3, 2024, the Company completed its acquisition of certain assets of Card Isle, an e-commerce greeting card company, expanding the Company’s presence in the greeting card category across all brands. The Company used cash on its balance sheet to fund the $3.6 million purchase – See Note 3 – Acquisitions in Item 1.
Current wording
On April 3, 2024, the Company completed its acquisition of certain assets of Card Isle, an e-commerce greeting card company, expanding the Company’s presence in the greeting card category across all brands. The Company used cash on its consolidated balance sheet to fund the $3.6 million purchase – See Note 3 – Acquisitions in Item 1.
Previous wording
The following table presents the EBITDA and Adjusted EBITDA for the three and six months ended December 29, 2024 and December 31, 2023, respectively.
Current wording
The following table presents EBITDA and Adjusted EBITDA for the three and nine months ended March 30, 2025 and March 31, 2024, respectively.
Previous wording
Adjusted net income and adjusted or comparable net income per common share
Current wording
Adjusted net income (loss) and adjusted or comparable net income (loss) per common share
Previous wording
The following table presents the adjusted net income and adjusted net income per common share for the three and six months ended December 29, 2024 and December 31, 2023, respectively.
Current wording
The following table presents the adjusted net income (loss) and adjusted net income (loss) per common share for the three and nine months ended March 30, 2025 and March 31, 2024, respectively.
Previous wording
Segment contribution margin and adjusted segment contribution margin are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of segment contribution margin and adjusted segment contribution margin is that they are an incomplete measure of profitability as they do not include all operating expenses or non-operating income and expenses. Management compensates for this limitation when using this measure by looking at other GAAP measures, such as operating income and net income.
Current wording
Segment contribution margin and adjusted segment contribution margin are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of segment contribution margin and adjusted segment contribution margin is that they are an incomplete measure of profitability as they do not include all operating expenses or non-operating income and expenses. Management compensates for this limitation when using this measure by looking at other GAAP measures, such as operating income (loss) and net income (loss).
Previous wording
The following table presents the net revenues, gross profit, segment contribution margin, and adjusted segment contribution margin from each of the Company’s business segments, for the three and six months ended December 29, 2024 and December 31, 2023, respectively.
Current wording
The following table presents the net revenues, gross profit, segment contribution margin, and adjusted segment contribution margin from each of the Company’s business segments, for the three and nine months ended March 30, 2025 and March 31, 2024, respectively.
Previous wording
(a) Segment performance is measured based on segment contribution margin or segment Adjusted EBITDA, reflecting only the direct controllable revenue and operating expenses of the segments, both of which are non-GAAP measurements. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead, described above, depreciation and amortization, other income (net), and other items that we do not consider indicative of our core operating performance.
Current wording
(a) Segment performance is measured based on segment contribution margin or segment Adjusted EBITDA, reflecting only the direct controllable revenue and operating expenses of the segments, both of which are non-GAAP measurements. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead, described above, depreciation and amortization, other expense (income), net, and other items that we do not consider indicative of our core operating performance.
Previous wording
(c) See reconciliation of the Company's net income to Adjusted EBITDA (non-GAAP) above.
Current wording
(c) See reconciliation of the Company's net income (loss) to Adjusted EBITDA (non-GAAP) above.
Previous wording
The following table reconciles net cash provided by operating activities, a GAAP measure, to free cash flow, a non-GAAP measure for the six months ended December 29, 2024 and December 31, 2023, respectively.
Current wording
The following table reconciles net cash provided by operating activities, a GAAP measure, to free cash flow, a non-GAAP measure for the nine months ended March 30, 2025 and March 31, 2024, respectively.
Previous wording
Net revenues decreased 5.7% and 6.7% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to lower e-commerce order volume across the Company's three segments, reflecting a continuation of the trends that the Company had experienced throughout the prior fiscal year, as consumer discretionary income remains pressured, and consumers continue to moderate their spending. In addition, the implementation of a new order management system for our Harry & David brand within the Gourmet Foods & Gift Baskets segment negatively impacted sales in the current period by approximately $20 million. The decrease was partially offset by increased wholesale demand due to increased orders from big box retailers.
Current wording
Net revenues decreased 12.6% and 8.3% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to lower e-commerce order volume across the Company, reflecting a continuation of the trends that the Company had experienced throughout the prior fiscal year as consumer discretionary income remains pressured and consumers continue to moderate their spending. In addition, the Company experienced a highly promotional consumer environment for Valentine's Day.
Previous wording
The Company acquired Scharffen Berger and Card Isle on July 1, 2024 and April 3, 2024, respectively. Revenues related to these acquisitions were not significant during the three and six months ended December 29, 2024.
Current wording
The Company acquired Scharffen Berger and Card Isle on July 1, 2024 and April 3, 2024, respectively. Revenues related to these acquisitions were not significant during the three and nine months ended March 30, 2025.
Previous wording
E-commerce revenues (combined online and telephonic) decreased 8.3% and 8.2% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, primarily due to the decline in demand across our three segments, as well as product mix with customers trending toward lower price point items.
Current wording
E-commerce revenues (combined online and telephonic) decreased 14.2% and 9.8% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, primarily due to the decline in demand across our segments.
Previous wording
During the three and six months ended December 29, 2024, the Company fulfilled approximately 7.4 million and 9.8 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of 7.2% and 6.9%, respectively, compared to the same periods of the prior year. During the three and six months ended December 29, 2024, average order value decreased 1.2% and 1.4% to $92.02 and $88.82, respectively, compared to the same periods in the prior year. The average order value decreased as a result of higher promotions due to a competitive market and product mix as the Company has introduced a wider selection of more modestly priced items to target a broader consumer base.
Current wording
During the three and nine months ended March 30, 2025, the Company fulfilled approximately 3.7 million and 13.4 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of 14.2% and 8.9%, respectively, compared to the same periods of the prior year. During the three and nine months ended March 30, 2025, the average order value was $79.38 and $86.47, relatively flat and a decrease of 0.9%, respectively, compared to the same periods in the prior year.
Previous wording
Other revenues during the three and six months ended December 29, 2024 increased 17.4% and 3.0%, respectively, compared to the same periods of the prior year, due to higher wholesale volumes within the Gourmet Foods & Gift Baskets segment due to increased orders from big box retailers, which was partially offset by lower BloomNet revenues due to lower order volume through the network, including our 1-800-Flowers brand.
Current wording
Other revenues during the three months ended March 30, 2025 increased 1.4% compared to the same period of the prior year, primarily due to higher wholesale volumes within the BloomNet segment. Other revenues during the nine months ended March 30, 2025 increased 2.7% compared to the same period of the prior year, due to higher wholesale volumes within the Gourmet Foods & Gift Baskets segment due to increased orders from big box retailers, which was partially offset by lower BloomNet revenues due to lower order volume through the network, including our 1-800-Flowers® brand.
Previous wording
Consumer Floral & Gifts – this segment, which includes the operations of the 1-800-Flowers.com, PersonalizationMall, Things Remembered and Alice’s Table brands, derives revenue from the sale of consumer floral products and gifts through its e-commerce sales channels (telephonic and online sales), retail stores, and royalties from its franchise operations.
Current wording
Consumer Floral & Gifts – this segment, which includes the operations of the 1-800-Flowers.com®, Personalization Mall®, Things Remembered® and Alice’s Table brands®, derives revenue from the sale of consumer floral products and gifts through its e-commerce sales channels (telephonic and online sales), retail stores, and royalties from its franchise operations.
Previous wording
Net revenues within this segment decreased 8.0% and 6.9% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to continued macro-economic pressure and use of promotional offerings due to the competitive environment.
Current wording
Net revenues within this segment decreased 11.4% and 8.5% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to continued macro-economic pressure and a highly promotional consumer environment.
Previous wording
During the three and six months ended December 29, 2024, Consumer Floral & Gifts orders through its e-commerce sales channel (online and telephonic sales) decreased 7.3% and 5.8%, respectively, compared to the same periods of the prior year. In addition, the average order value decreased 0.8% and 1.1%, respectively, as a result of product mix trending towards lower price point items and higher promotions due to the competitive market.
Current wording
During the three and nine months ended March 30, 2025, Consumer Floral & Gifts orders through its e-commerce sales channel (online and telephonic sales) decreased 12.0% and 7.9%, respectively, compared to the same periods of the prior year. In addition, during the three and nine months ended March 30, 2025, the average order value increased 0.9% and decreased 0.6%, respectively, compared to the same periods of the prior year.
Previous wording
Net revenues decreased 16.2% and 18.2% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year. The net revenue decline was primarily due to lower service revenues, which were attributable to a decline in order volume processed through the network.
Current wording
Net revenues increased 4.5% and decreased 10.7% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year. Revenue increased for the three months ended March 30, 2025 compared to the prior year period primarily due to an increase in wholesale revenues. The decrease in revenue for the nine months ended March 30, 2025, compared to the prior year was primarily due to lower service revenues, which was attributable to a decline in order volume processed through the network.
Previous wording
Gourmet Foods & Gift Baskets - this segment includes the operations of Harry & David, Wolferman’s, Cheryl’s Cookies, The Popcorn Factory, 1-800-Baskets/DesignPac, Shari’s Berries, Vital Choice, and since July 1, 2024, Scharffen Berger. Revenue is derived from the sale of gourmet fruits, cookies, baked gifts, premium chocolates and confections, gourmet popcorn, gift baskets, dipped berries, prime steaks, chops, and fish, through the Company’s e-commerce sales channels (telephonic and online sales) and company-owned and operated retail stores under the Harry & David and Cheryl’s Cookies brand names, as well as wholesale operations.
Current wording
Gourmet Foods & Gift Baskets - this segment includes the operations of Harry & David®, Wolferman’s®, Cheryl’s Cookies®, The Popcorn Factory®, 1-800-Baskets.com®/DesignPac®, Shari’s Berries®, Vital Choice®, and since July 1, 2024, Scharffen Berger®. Revenue is derived from the sale of gourmet fruits, cookies, baked gifts, premium chocolates and confections, gourmet popcorn, gift baskets, dipped berries, prime steaks, chops, and fish, through the Company’s e-commerce sales channels (telephonic and online sales) and company-owned and operated retail stores under the Harry & David and Cheryl’s Cookies brand names, as well as wholesale operations.
Previous wording
Net revenues within this segment decreased4.0% and 5.6%during thethree and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, as a result of lower e-commerce revenues, which were impacted by lower demand, partially offset by increased wholesale volume as big box retailers increased orders in the current year. In addition, the implementation of a new order management system for our Harry & David brand negatively impacted sales in the current period by approximately $20 million.
Current wording
Net revenues within this segment decreased 18.2% and 7.7% during thethree and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, as a result of lower e-commerce revenues due to lower demand, partially offset by increased wholesale volume as big box retailers increased orders in the current year. In addition, the implementation of a new order management system for our Harry & David brand negatively impacted sales in the first nine months of fiscal 2025.
Previous wording
During the three and six months ended December 29, 2024, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 7.0% and 8.0%, respectively, compared to the same periods of the prior year. In addition, the average order value decreased 1.5% and 1.2%, respectively, as a result of product mix trending towards lower price point items and the higher promotions due to the competitive market.
Current wording
During the three and nine months ended March 30, 2025, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 18.1% and 10.1%, respectively, compared to the same periods of the prior year. In addition, the average order value for the three and nine months ended March 30, 2025 decreased 2.0% and 1.0%, respectively, compared to the same periods of the prior year, as a result of product mix trending towards lower price point items and a highly promotional consumer environment.
Previous wording
Gross profit decreased 5.7% and 6.5% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to lower revenues as noted above.
Current wording
Gross profit decreased 24.3% and 10.6% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to lower revenues as noted above.
Previous wording
Consumer Floral & Gifts segment - Gross profit decreased by 10.0% and 8.0% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to the impact of the lower revenues noted above, as well as the unfavorable gross profit percentage primarily attributable to higher cost of merchandise.
Current wording
Consumer Floral & Gifts segment- Gross profit decreased by 17.2% and 11.2% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to the impact of the lower revenues noted above, as well as the unfavorable gross profit percentage primarily attributable to higher cost of merchandise.
Previous wording
BloomNet **segment -**Gross profit decreased by 10.4% and 15.7% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to the decrease in revenues noted above, partially offset by an increase in the gross profit percentage. Gross profit percentage increased in comparison to the same periods of the prior year due to lower florist rebates, which was driven by lower florist-to-florist volume.
Current wording
BloomNet® segment - Gross profit increased by 8.0% and decreased 8.4% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year. Gross profit increased for the three months ended March 30, 2025, compared to the prior year period, due to the aforementioned revenue increase and improved gross profit percentage driven by lower florist rebates. Gross profit decreased for the nine months ended March 30, 2025, compared to the prior year period, due to the impact of lower revenues noted above, offset in part by improved gross profit percentage driven by lower florist rebates related to lower florist-to-florist volume.
Previous wording
Gourmet Foods & Gift Baskets segment - Gross profit decreased by 3.3% and 4.5% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to the decrease in revenue noted above, partially offset by a slightly improved gross profit percentage. Gross profit percentage increased 30 basis points and 50 basis points during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year. The increased gross profit percentage was attributable to lower delivery and shipping costs and labor efficiencies, which was partially offset by a higher cost of merchandise and incremental costs associated with the implementation of a new order management system for our Harry & David Brand.
Current wording
Gourmet Foods & Gift Baskets segment- Gross profit decreased by 38.6% and 8.2% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to the decrease in revenue noted above, as well as decreased gross profit percentage attributable to higher cost of merchandise and incremental costs associated with the implementation of a new order management system for the Harry & David brand.
Previous wording
Technology and development expense increased by 7.8% and 4.9% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, primarily due to higher development and consulting costs for the Company's technology platform enhancements, including incremental costs relating to the implementation of a new customer service platform and order management system.
Current wording
Technology and development expense decreased by 3.7% and increased 2.0% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year. The decrease for the three months ended March 30, 2025 as compared to the prior year period is related to a decline in maintenance and support for the Company's technology platform enhancements. The increase for the nine months ended March 30, 2025 as compared to the prior year period is due to higher development and consulting costs for the Company's technology platform enhancements, including incremental costs relating to the implementation of a new customer service platform and order management system.
Previous wording
General and administrative expenses increased 0.9% and 0.5% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, primarily due to an increase in insurance costs, partially offset by lower labor costs, professional fees, and changes in the value of the Company’s NQDC Plan investments (offset in Other income, net below).
Current wording
General and administrative expenses decreased 20.6% and 7.2% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, primarily due to lower labor costs and changes in the value of the Company’s NQDC Plan investments (offset in Other expense (income), net below), partially offset by higher insurance costs and professional fees.
Previous wording
Depreciation and amortization expense was essentially in-line with the prior year, during the three and six months ended December 29, 2024.
Current wording
Depreciation and amortization expense was essentially in-line with the prior year during the three and nine months ended March 30, 2025.
Previous wording
Interest expense was lower compared to the prior year, during the three and six months ended December 29, 2024, driven by the lower interest rates and outstanding Term Loan balance, offset by increased borrowings against our revolving credit facility throughout the quarter.
Current wording
Interest expense, net was higher compared to the prior year, during the three and nine months ended March 30, 2025, driven by higher interest rates, partially offset by a lower outstanding Term Loan balance.
Previous wording
Other income, net consists primarily of investment losses (gains) on the Company’s NQDC Plan investments (for which the offsetting expense was recorded in the general and administration expense above).
Current wording
Other expense (income), net consists primarily of investment losses (gains) on the Company’s NQDC Plan investments (for which the offsetting expense was recorded in the general and administration expense above).
Previous wording
The Company recorded an income tax expense of $23.5 million and $9.1 million, during the three and six months ended December 29, 2024, respectively compared to an income tax expense of $26.5 million and $16.2 million, during the three and six months ended December 31, 2023, respectively. The Company’s effective tax rate for the three and six months ended December 29, 2024 was 26.7% and 23.2%, respectively, compared to 29.6% and 33.8% in the same respective periods of the prior year. The Company’s effective tax rate for the three and six months ended December 29, 2024 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes, tax deficiencies (shortfalls) from stock-based compensation and increases in valuation allowances, partially offset by tax credits. The Company’s effective tax rate for three and six months ended December 31, 2023 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes and non-deductible executive compensation, partially offset by tax credits. The Company's effective tax rate for the three and six months ended December 31, 2023, was further impacted by the intangible impairment charge, which reduced the amount of income reflected in the Company’s estimated annual effective tax rate.
Current wording
The Company recorded an income tax benefit of $18.5 million and $9.4 million during the three and nine months ended March 30, 2025, respectively, compared to an income tax benefit of $8.3 million and income tax expense of $7.8 million during the three and nine months ended March 31, 2024, respectively. The Company’s effective tax rate for the three and nine months ended March 30, 2025 was 9.4% and 5.9%, respectively, compared to 33.0% and 34.7% in the same respective periods of the prior year. The Company’s effective tax rate for the three and nine months ended March 30, 2025 differed from the U.S. federal statutory rate of 21.0% primarily due to establishing a valuation allowance on certain federal and state deferred tax assets (including charitable contribution carryforwards) and the permanent portion of goodwill impairment charges. The Company’s effective tax rate for the three and nine months ended March 30, 2025 was also impacted by state income taxes and tax deficiencies (shortfalls) from stock-based compensation, partially offset by tax credits. The Company’s effective tax rate for the three and nine months ended March 31, 2024 differed from the U.S. federal statutory rate of 21.0% primarily due to impairment charges reducing the amount of income reflected in the Company’s estimated annual effective tax rate. Further impacting the Company's effective tax rate for the three and nine months ended March 31, 2024 were tax deficiencies (shortfalls) from stock-based compensation, state income taxes and non-deductible executive compensation, partially offset by tax credits.
Previous wording
The Company's principal sources of liquidity are cash on hand, cash flows generated from operations, and borrowings available under the Company’s credit agreement (see Note 10 – Long-term debt, net in Item 1 for details). At December 29, 2024, the Company had working capital of $167.3 million, including cash and cash equivalents of $247.2 million, compared to working capital of $157.9 million, including cash and cash equivalents of $159.4 million, at June 30, 2024.
Current wording
The Company's principal sources of liquidity are cash on hand, cash flows generated from operations, and borrowings available under the Company’s credit agreement (see Note 10 – Long-term debt, net in Item 1 for details). At March 30, 2025, the Company had working capital of $108.1 million, including cash and cash equivalents of $84.7 million, compared to working capital of $157.9 million, including cash and cash equivalents of $159.4 million, at June 30, 2024.
Previous wording
During the first two quarters of fiscal 2025, the Company borrowed under its revolving credit agreement in order to fund pre-holiday manufacturing and inventory procurement requirements, with borrowings peaking at $110.0 million in November 2024. Cash generated from operations during the Christmas holiday shopping season enabled the Company to repay the borrowings under the Revolver in December 2024. Based on current projected cash flows, the Company believes that the available cash balances will be sufficient to provide for the Company's operating needs through the remainder of fiscal 2025, at which time the Company would again expect to borrow against its Revolver to fund pre-holiday manufacturing and inventory purchases. The Company had no amounts outstanding under the Revolver as of December 29, 2024. In addition, during the second quarter of fiscal 2025, the Company made a payment of $27.5 million on its Term Loan, which includes a $25.0 million prepayment.
Current wording
During the first two quarters of fiscal 2025, the Company borrowed under its revolving credit facility in order to fund pre-holiday manufacturing and inventory procurement requirements, with borrowings peaking at $110.0 million in November 2024. Cash generated from operations during the Christmas holiday shopping season enabled the Company to repay the borrowings under its revolving credit facility in December 2024. Based on current projected cash flows, the Company believes that the available cash balances will be sufficient to provide for the Company's operating needs through the remainder of fiscal 2025, at which time the Company would again expect to borrow against its revolving credit facility to fund pre-holiday manufacturing and inventory purchases. The Company had no amounts outstanding under the Revolver as of March 30, 2025. In addition, during the second quarter of fiscal 2025, the Company made a payment of $27.5 million on its Term Loan, which includes a $25.0 million prepayment.
Previous wording
Net cash provided by operating activities of$151.3 million, for thesix months ended December 29, 2024, was primarily attributable to the Company’s net income during the period, adjusted by non-cash charges for depreciation and amortization and stock-based compensation, combined with seasonal changes in net working capital, including increases in accounts payable and accrued expenses and trade receivables and a decrease in inventory.
Current wording
Net cash provided by operating activities of $0.7 million, for the nine months ended March 30, 2025, was primarily attributable to the Company’s net loss during the period adjusted for non-cash charges for goodwill and intangible impairment, depreciation and amortization, stock-based compensation, and deferred income taxes, offset by uses of cash for working capital purposes, comprised of decreases in accounts payable and accrued expenses and increases in trade receivables, offset by decreases in inventory.
Previous wording
Net cash used in investing activitiesof$26.0 million, for the six months ended December 29, 2024, was attributable to capital expenditures primarily related to the Company's technology and automation initiatives, and the acquisition of Scharffen Berger as noted above.
Current wording
Net cash used in investing activitiesof$35.4 million, for the nine months ended March 30, 2025, was attributable to capital expenditures primarily related to the Company's technology and automation initiatives, and the acquisition of Scharffen Berger as noted above.
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Current report — wording carried from elsewhere
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report — wording carried from elsewhere
See Note 6 – Goodwill and other intangibles, net in Item 1 for further information.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
During the three and six months ended December 31, 2023, the Company recorded a non-cash impairment charge of $19.8 million related to its PersonalizationMall trademark, due to a decline in the actual and projected revenue, combined with a higher discount rate resulting from the higher interest rate environment. See Note 6 – Goodwill and other intangibles, net in Item 1 for further information.