1 800 FLOWERS COM INC

Previous wording

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our 10-Q and 8-K reports to the United States Securities and Exchange Commission (“SEC”). Also note we provide the following cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to our business. These are factors that, individually or in the aggregate, we think could cause our actual results to differ materially from expected and historical results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995.

Current wording

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our 10-Q and 8-K reports to the SEC. Also note we provide the following cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to our business. These are factors that, individually or in the aggregate, we think could cause our actual results to differ materially from expected and historical results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995.

Previous wording

The financial and credit markets and consumer sentiment have and will experience significant volatility, which may have an adverse effect on our customers’ spending patterns and in turn our business, financial condition and results of operations. The Company’s business and operating results are subject to economic conditions and their impact on consumer discretionary spending. Factors that may negatively impact consumer spending include high levels of unemployment, higher consumer debt levels, reductions in net worth, reductions in disposable income levels, declines in asset values, and related market uncertainty; home foreclosures and reductions in home values; fluctuating interest rates and credit availability; fluctuating fuel and other energy costs; fluctuating commodity prices; and general uncertainty regarding the overall future political and economic environment. Consumer spending patterns are difficult to predict and are sensitive to the general economic climate, the consumer’s level of disposable income, consumer debt, and overall consumer confidence. In the recent past, such factors have impacted and may continue to impact our business in a number of ways. Included among these current and potential future negative impacts are reduced demand and lower prices for our products and services. Adverse economic changes could reduce consumer confidence and could thereby affect our operating results. In challenging and uncertain economic environments, including the current geopolitical climate, we cannot predict when macroeconomic conditions uncertainty may arise and whether such circumstances could impact the Company.

Current wording

The financial and credit markets and consumer sentiment have experienced and may continue to experience significant volatility, which may have an adverse effect on our customers’ spending patterns and in turn our business, financial condition and results of operations. The Company’s business and operating results are subject to economic conditions and their impact on consumer discretionary spending. Factors that may negatively impact consumer spending include high levels of unemployment, higher consumer debt levels, reductions in net worth, reductions in disposable income levels, declines in asset values, and related market uncertainty; home foreclosures and reductions in home values; fluctuating interest rates and credit availability; fluctuating fuel and other energy costs; fluctuating commodity prices; and general uncertainty regarding the overall future political and economic environment. These factors may be exacerbated by inflationary pressure, uncertainty regarding tariffs and trade policy, elevated promotional activity across the retail and e-commerce sectors, and shifts in consumer preferences toward lower-priced or substitute gift offerings. Consumer spending patterns are difficult to predict and are sensitive to the general economic climate, the consumer’s level of disposable income, consumer debt, and overall consumer confidence. In the recent past, such factors have impacted and may continue to impact our business in a number of ways. Included among these current and potential future negative impacts are reduced demand and lower prices for our products and services. Adverse economic changes could reduce consumer confidence and could thereby affect our operating results. In challenging and uncertain economic environments, including the current geopolitical climate, we cannot predict when macroeconomic conditions uncertainty may arise and whether such circumstances could impact the Company.

Previous wording

•import duties and quotas, such as the tariffs that were imposed on flowers imported from Colombia during fiscal 2025;

Current wording

•import duties and quotas, such as the tariffs that were imposed on flowers imported from Colombia during fiscal 2025 and fiscal 2026, the tariffs that were imposed on cut flowers imported from Canada starting in August 2026, and any new, increased, retaliatory, suspended, reinstated, expanded, or reinterpreted tariffs or customs duties affecting flowers, food products, containers, packaging, finished goods, or other imported inputs;

Previous wording

The U.S. has recently instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S. and other countries where we conduct business. As a result, there have been, and may continue to be, greater restrictions and economic disincentives on international trade, and considerable uncertainty about future U.S trade policies. These developments have the potential to adversely impact the U.S. economy, our industry and the demand for our products. While we are managing the impact of recent trade policy changes by evaluating sourcing opportunities outside of China, working with existing vendors on concessions, changing componentry, modifying our assortment, and adjusting our pricing, it has been and may continue to be time-consuming and expensive for us to alter our business operations in order to adapt to or comply with shifting trade policies. As a result, such changes could have a material adverse effect on our business, financial condition and results of operations.

Current wording

As a result, there have been, and may continue to be, greater restrictions and economic disincentives on international trade, and considerable uncertainty about future U.S. trade policies. These developments have the potential to adversely impact the U.S. economy, our industry and the demand for our products. Tariff and trade-policy changes can also occur with limited notice, can be subject to legal challenge or retroactive administrative interpretation, and can cause suppliers, carriers and customers to change their behavior before the full effect of the changes is known. While we are managing the impact of recent trade policy changes by evaluating new sourcing opportunities, working with existing vendors on concessions, changing componentry, modifying our assortment, and adjusting our pricing, it has been and may continue to be time-consuming and expensive for us to alter our business operations in order to adapt to or comply with shifting trade policies. As a result, such changes could increase costs, disrupt inventory availability, reduce gross margins, or affect product quality and customer satisfaction, and thus have a material adverse effect on our business, financial condition and results of operations.

Previous wording

Increased shipping costs and supply chain disruptions may adversely affect sales of the Company’s products. Many of the Company's products are delivered to customers either directly from the manufacturer or from the Company’s fulfillment centers. The Company has established relationships with Federal Express and other common carriers for the delivery of these products. If these carriers increase the prices they charge to ship the Company’s goods, and if the Company is forced to pass these costs on to its customers, or if carrier capacity becomes constrained, due to strikes or otherwise, the Company’s sales could be negatively impacted. In addition, ocean container availability and cost, as well as port and shipping route disruptions could impact the Company’s ability to deliver products on a timely basis to our customers and adversely affect its customer relationships, revenues and earnings.

Current wording

Increased shipping costs and supply chain disruptions may adversely affect sales of the Company’s products. Many of the Company's products are delivered to customers either directly from the manufacturer or from the Company’s fulfillment centers. Our business depends on timely and accurate order routing, carrier capacity, last-mile performance, cold-chain and temperature-management controls where applicable, and the ability of our fulfillment centers, suppliers, franchisees, florists and other third-party vendors to perform during peak-volume periods. The Company has established relationships with leading common carriers for the delivery of our products. If carrier capacity becomes constrained, due to strikes or otherwise, the Company’s sales could be negatively impacted. If the Company experiences higher shipping, fuel, labor, packaging, refrigeration, or delivery costs and the Company absorbs these increases, our gross margins may decline; if the Company passes those increased costs on to customers, our demand, conversion rates, purchase frequency, or average order value may decline. In addition, ocean container availability and cost, as well as port and shipping route disruptions could impact the Company’s ability to deliver products on a timely basis to our customers and adversely affect its customer relationships, revenues and earnings. Disruptions may include geopolitical events, rerouting around disrupted shipping lanes, port congestion, labor disputes, capacity shortages, customs delays, transportation network failures, severe weather, natural disasters, or other events outside our control.

Previous wording

If the supply of flowers for sale becomes limited, the price of flowers could rise or flowers may be unavailable and the Company’s revenues and gross margins could decline. A variety of factors affect the supply of flowers in the United States and the price of the Company’s floral products. If the supply of flowers available for sale is limited due to weather conditions, farm closures, economic conditions, political conditions in supplier locations, or other factors, prices for flowers could rise and as a result customer demand for the Company’s floral products may be reduced, causing revenues and gross margins to decline. Alternatively, the Company may not be able to obtain high quality flowers in an amount sufficient to meet customer demand. Even if available, flowers from alternative sources may be of lesser quality and/or may be more expensive than those currently offered by the Company.

Current wording

If the supply of flowers for sale becomes limited, the price of flowers could rise or flowers may be unavailable and the Company’s revenues and gross margins could decline. A variety of factors affect the supply of flowers in the United States and the price of the Company’s floral products. If the supply of flowers available for sale is limited due to weather conditions, farm closures, economic conditions, political conditions in supplier locations, or other factors, prices for flowers could rise and as a result customer demand for the Company’s floral products may be reduced, causing revenues and gross margins to decline. Alternatively, the Company may not be able to obtain high quality flowers in an amount sufficient to meet customer demand. Even if available, flowers from alternative sources may be of lesser quality and/or may be more expensive than those currently offered by the Company. Quality or availability issues could be particularly harmful during major gifting occasions when we have limited time to re-source, substitute, produce or deliver products, and could result in refunds, credits, replacement costs, chargebacks, lost repeat purchases, and reputational harm.

Previous wording

The Company's operating results may suffer due to economic, political and social unrest or disturbances. Like other American businesses, the Company is unable to predict what long-term effect acts of terrorism, war, or similar unforeseen events may have on its business. The Company’s results of operations and financial condition could be adversely impacted if such events cause an economic slowdown in the United States, negatively impact the supply chain, increase the cost of key components for our gifts, or have other negative effects that cannot now be anticipated.

Current wording

The Company's operating results may suffer due to economic, political and social unrest or disturbances. Like other American businesses, the Company is unable to predict what long-term effect acts of terrorism, war, natural disasters, or similar unforeseen events may have on its business. The Company’s results of operations and financial condition could be adversely impacted if such events cause an economic slowdown in the United States, negatively impact the supply chain, increase the cost of key components for our gifts, or have other negative effects that cannot now be anticipated.

Previous wording

During peak periods, the Company utilizes temporary employees and outsourced staff, who may not be as well-trained or committed to its customers as its permanent employees, and if they fail to provide the Company’s customers with high quality customer service the customers may not return, which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. The Company depends on its customer service department to respond to its customers should they have questions or problems with their orders. During peak periods, the Company relies on its permanent employees, as well as temporary employees and outsourced staff to respond to customer inquiries. These temporary employees and outsourced staff may not have the same level of commitment to the Company’s customers or be as well trained as its permanent employees. If the Company’s customers are dissatisfied with the quality of the customer service they receive, they may not shop with the Company again, which could have a material adverse effect on its business, financial condition, results of operations and cash flows.

Current wording

During peak periods, the Company utilizes temporary employees and outsourced staff, who may not be as well-trained or committed to its customers as its permanent employees, and if they fail to provide the Company’s customers with high quality customer service, the customers may not return, which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. The Company depends on its customer service department to respond to its customers should they have questions or problems with their orders. During peak periods, the Company relies on its permanent employees, as well as temporary employees and outsourced staff to respond to customer inquiries. These temporary employees and outsourced staff may not have the same level of commitment to the Company’s customers or be as well trained as permanent employees. If the Company’s customers are dissatisfied with the quality of the customer service they receive, they may not shop with the Company again, which could have a material adverse effect on its business, financial condition, results of operations and cash flows.

Previous wording

If the Company fails to develop and maintain its brands, it may not increase or maintain its customer base or its revenues. The Company must continue to develop and maintain the its brands to expand its customer base and its revenues. In addition, the Company has introduced and acquired other brands in the past, and may continue to do so in the future. The Company believes that the importance of brand recognition will increase as it expands its product offerings. Many of the Company’s customers may not be aware of the Company’s non-floral products. If the Company fails to advertise and market its products effectively, it may not succeed in establishing its brands and may lose customers leading to a reduction of revenues.

Current wording

If the Company fails to develop and maintain its brands, it may not increase or maintain its customer base or its revenues. The Company must continue to develop and maintain its brands to expand its customer base and its revenues. In addition, the Company has introduced and acquired other brands in the past, and may continue to do so in the future. The Company believes that the importance of brand recognition will increase as it expands its product offerings. Many of the Company’s customers may not be aware of the Company’s non-floral products. If the Company fails to advertise and market its products effectively, it may not succeed in establishing its brands and may lose customers, leading to a reduction of revenues.

Previous wording

The Company’s success in promoting and enhancing the 1-800-FLOWERS.COM brands will also depend on its success in providing its customers high-quality products and a high level of customer service. If the Company’s customers do not perceive its products and services to be of high quality, the value of the 1-800-FLOWERS.COM brands would be diminished and the Company may lose customers and its revenues may decline.

Current wording

The Company’s success in promoting and enhancing the 1-800-FLOWERS.COM brands will also depend on its success in providing its customers high-quality products and a high level of customer service. If the Company’s customers do not perceive its products and services to be of high quality, the value of the 1-800-FLOWERS.COM brands would be diminished and the Company may lose customers and its revenues may decline. Negative publicity, including through social media, online reviews, influencer content, generated content, misinformation, fraudulent use of our brands, delivery or product-quality failures, data or privacy incidents, labor or sourcing issues, or public statements or actions by employees, franchisees, vendors, partners, or other third parties, could damage our reputation and adversely affect customer acquisition, retention, revenues and operating results.

Previous wording

Marketing programs that generate a significant amount of traffic may be less effective or less cost-efficient than in previous periods, which could limit the volume and growth of the Company’s business. Although the Company expects a significant portion of its customers will continue to come directly to its website, mobile applications, and telephone call center, it will also rely on marketing arrangements with third party websites, search engines, display advertising providers, social media platforms, and affiliates with which the Company has strategic relationships for traffic. If these third parties do not attract a significant number of visitors, the Company may not receive a significant number of customers from these relationships and its revenues from these relationships may decrease or remain flat. There continues to be strong competition to establish or maintain relationships with leading Internet companies, and the Company may not successfully enter into additional relationships or renew existing ones beyond their current terms. The Company may also be required to pay significant fees to maintain and expand existing relationships. The Company’s online revenues may suffer if it does not enter into new strategic online and social media relationships or maintain such existing relationships or if these relationships do not result in traffic sufficient to justify their costs. In addition, current or future legislation or changes to third parties’ policies may limit the Company’s ability to effectively reach consumers whose behavior suggests that they might be interested in Company products. Vendors of advertising and analytics products and services have modified and may continue to modify their products and services in ways that could reduce the efficiency of our marketing efforts, such as changes to cookie settings and policies, modifications of organic search and paid listing algorithms, the addition of AI summaries to online search engine results, and the introduction of new AI assistant platforms. While we strive to adjust our marketing strategies in response to these changes, there can be no guarantee that any adjustments will be effective. Any reduction in our ability to make effective use of advertising technologies could harm our ability to personalize the experience of prospective customers, increase our costs, and limit our ability to attract and retain customers on cost-effective terms. As a result, our business and results of operations could be adversely affected.

Current wording

Marketing programs that generate a significant amount of traffic may be less effective or less cost-efficient than in previous periods, which could limit the volume and growth of the Company’s business. Although the Company expects a significant portion of its customers will continue to come directly to its website, mobile applications, and telephone call center, it will also rely on marketing arrangements with third party websites, search engines, display advertising providers, social media platforms, and affiliates with which the Company has strategic relationships for traffic. If these third parties do not attract a significant number of visitors, the Company may not receive a significant number of customers from these relationships and its revenues from these relationships may decrease or remain flat. There continues to be strong competition to establish or maintain relationships with leading Internet companies, and the Company may not successfully enter into additional relationships or renew existing ones beyond their current terms. The Company may also be required to pay significant fees to maintain and expand existing relationships. The Company’s online revenues may suffer if it does not enter into new strategic online and social media relationships or maintain such existing relationships or if these relationships do not result in traffic sufficient to justify their costs. In addition, current or future legislation or changes to third parties’ policies may limit the Company’s ability to effectively reach consumers whose behavior suggests that they might be interested in Company products. Vendors of advertising and analytics products and services have modified, and may continue to modify their products and services in ways that could reduce the efficiency of our marketing efforts, such as changes to cookie settings and policies, modifications of organic search and paid listing algorithms, the addition of artificial intelligence ("AI") summaries to online search engine results, and the introduction of new AI assistant platforms. Consumers may increasingly rely on generative AI search, shopping assistants, social commerce, marketplace recommendations, or other intermediated discovery tools that reduce traffic to our owned websites and mobile applications or change how and whether our brands and products are described or ranked. These tools may display inaccurate or incomplete information about our products, prices, availability, delivery terms, or promotions and we may have limited ability to correct or influence that content. While we strive to adjust our marketing strategies in response to these changes, there can be no guarantee that any adjustments will be effective. If customer acquisition costs rise, if attribution data becomes less reliable, if our ability to make effective use of advertising technologies is reduced, or if competitors more effectively use AI-enabled marketing and personalization tools, our revenues, margins, and result…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

If a florist discontinues its relationship with the Company, the Company’s customers may experience delays in service or declines in quality and may not shop with the Company again. Many of the Company’s arrangements with local florists for order fulfillment may be terminated by either party with 10 days’ notice. If a florist discontinues its relationship with the Company, the Company will be required to obtain a suitable replacement located in the same geographic area, which may cause delays in delivery or a decline in quality, leading to customer dissatisfaction and loss of customers.

Current wording

If a florist discontinues its relationship with the Company, the Company’s customers may experience delays in service or declines in quality and may not shop with the Company again. Many of the Company’s arrangements with local florists for order fulfillment may be terminated by either party with 10 days’ notice. If a florist discontinues its relationship with the Company, the Company will be required to obtain a suitable replacement located in the same geographic area, which may cause delays in delivery or a decline in quality, leading to customer dissatisfaction and loss of customers. Replacing florists or vendors may be particularly difficult during peak holiday periods, in rural or underserved delivery areas, or where cost, quality, labor availability or delivery constraints limit available alternatives.

Previous wording

•supermarkets, mass merchants and specialty gift retailers with floral departments.

Current wording

•supermarkets, mass merchants and specialty gift retailers with floral departments; and

Previous wording

Extreme weather conditions, natural disasters, public health conditions such as pandemics, and other catastrophic events, may interrupt our business, or our suppliers’ businesses. Some of our facilities and our suppliers’ facilities are located in areas that may be subject to extreme, and occasionally prolonged, weather conditions, including hurricanes, tornadoes, and wildfires. Extreme weather conditions, whether caused by global climate change or otherwise, may interrupt our operations in such areas. In addition, public health conditions or other such unforeseen events could affect our and our suppliers' operations. Any such events would negatively impact various functions, such as production, distribution, and order fulfillment. Furthermore, extreme weather conditions may interrupt our suppliers’ production or shipments, or increase our suppliers’ product costs, all of which could have an adverse effect on our business, financial condition, and results of operations.

Current wording

Extreme weather conditions, natural disasters, public health conditions such as pandemics, and other catastrophic events, may interrupt our business, or our suppliers’ businesses. Some of our facilities and our suppliers’ facilities are located in areas that may be subject to extreme, and occasionally prolonged, weather conditions, including hurricanes, tornadoes, earthquakes, and wildfires. Extreme weather conditions, whether caused by global climate change or otherwise, may interrupt our operations in such areas. In addition, public health conditions or other such unforeseen events could affect our and our suppliers' operations. Any such events would negatively impact various functions, such as production, distribution, and order fulfillment. Furthermore, extreme weather conditions may interrupt our suppliers’ production or shipments, or increase our suppliers’ product costs, all of which could have an adverse effect on our business, financial condition, and results of operations.

Previous wording

The terms of our existing credit facilities could limit our operating flexibility. The credit agreement governing our existing credit facilities contains certain financial and certain affirmative and negative covenants requiring us to maintain certain financial ratios and liquidity levels, limiting the ability to, among other things, incur additional indebtedness, make certain investments, make certain restricted payments, incur certain liens or permit them to exist, hold cash deposits in accounts not maintained with lenders under the existing credit facilities or their affiliates, enter into certain types of transactions with affiliates, merge or consolidate with another company, and transfer, sell or otherwise dispose of assets. These terms may affect our ability to obtain future financing and to pursue attractive business opportunities, and our flexibility in planning for, and reacting to, changes in business conditions, which could adversely affect our business, financial condition and results of operations. If we fail to comply with the provisions of our existing credit facilities and if such failure is not cured or waived, it could result in an event of default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due and payable. Any such default would also limit our ability to obtain additional financing, which could have an adverse effect on our cash flow and liquidity.

Current wording

The terms of our existing credit facilities could limit our operating flexibility. The credit agreement governing our existing credit facilities contains certain financial and certain affirmative and negative covenants requiring us to maintain certain financial ratios and liquidity and EBITDA levels, limiting the ability to, among other things, incur additional indebtedness, make certain investments, make certain restricted payments, incur certain liens or permit them to exist, hold cash deposits in accounts not maintained with lenders under the existing credit facilities or their affiliates, enter into certain types of transactions with affiliates, merge or consolidate with another company, and transfer, sell or otherwise dispose of assets. These terms may affect our ability to obtain future financing and to pursue attractive business opportunities, and our flexibility in planning for, and reacting to, changes in business conditions, which could adversely affect our business, financial condition and results of operations. If we fail to comply with the provisions of our existing credit facilities and if such failure is not cured or waived, it could result in an event of default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due and payable. Any such default would also limit our ability to obtain additional financing, which could have an adverse effect on our cash flow and liquidity.

Previous wording

We have incurred impairment charges for our goodwill and other long-lived tangible and intangible assets, and may incur further impairment charges in the future, which would negatively impact our operating results. We review goodwill and other long-term assets regularly to assess whether indicators of impairment have arisen, the result of which may require that the Company recognize an impairment charge. Impairments have resulted and may result from, among other things, actual or projected decline in performance, adverse changes in interest rates and other market conditions, adverse changes in applicable laws or regulations, and a variety of other factors. We have in the past recorded, and may in the future be required to record, significant charges in our consolidated financial statements during the period in which any impairment of our goodwill or intangible assets is determined. For example, during fiscal 2025, fiscal 2024, and fiscal 2023, we recorded aggregate non-cash impairment charges of $143.8 million, $19.8 million, and $64.6 million, respectively, related to goodwill and certain trademarks to reduce their carrying value to their estimated fair value. If we are required to record additional non-cash impairment charges to our goodwill, other intangibles, and/or long-lived assets, any such non-cash charge could have a material adverse effect on our Consolidated Statements of Operations and Balance Sheets in the reporting period in which we record the charge.

Current wording

We have incurred impairment charges for our goodwill and other long-lived tangible and intangible assets, and may incur further impairment charges in the future, which would negatively impact our operating results. We review goodwill and other long-term assets regularly to assess whether indicators of impairment have arisen, the result of which may require that the Company recognize an impairment charge. Impairments have resulted and may result from, among other things, actual or projected decline in performance, adverse changes in interest rates and other market conditions, adverse changes in applicable laws or regulations, and a variety of other factors. We have in the past recorded, and may in the future be required to record, significant charges in our consolidated financial statements during the period in which any impairment of our goodwill or intangible assets is determined. For example, during fiscal 2026, fiscal 2025, and fiscal 2024, we recorded aggregate non-cash impairment charges of $45.2 million, $143.8 million, and $19.8 million, respectively, related to goodwill and certain trademarks to reduce their carrying value to their estimated fair value. If we are required to record additional non-cash impairment charges to our goodwill, other intangibles, and/or long-lived assets, any such non-cash charge could have a material adverse effect on our Consolidated Statements of Operations and Balance Sheets in the reporting period in which we record the charge.

Previous wording

Failure to protect our website, networks and computer systems against disruption and cyber security threats, or otherwise protect our and our customers’ confidential information, could damage our relationships with our customers, harm our reputation, expose us to litigation and adversely affect our business. We rely extensively on our computer systems for the successful operation of our business, including corporate email communications to and from employees, customers and retail operations, the design, manufacture and distribution of our finished goods, digital marketing efforts, collection and retention of customer data, employee information, the processing of credit card transactions, online e-commerce activities and our interaction with the public in the social media space. Our systems are subject to damage or interruption from computer viruses, malicious attacks and other security breaches. The possibility of a cyber-attack on any one or all of these systems is always a serious threat and consumer awareness and sensitivity to privacy breaches and cyber security threats is high. If a cybersecurity incident occurs, or there is a public perception that we have suffered a breach, our reputation and brand could be damaged and we could be required to expend significant capital and other resources to alleviate problems.

Current wording

Failure to protect our website, networks and computer systems against disruption and cyber security threats, or otherwise protect our and our customers’ confidential information, could damage our relationships with our customers, harm our reputation, expose us to litigation and adversely affect our business. We rely extensively on our computer systems for the successful operation of our business, including corporate email communications to and from employees, customers and retail operations, the design, manufacture and distribution of our finished goods, digital marketing efforts, collection and retention of customer data, employee information, the processing of credit card transactions, online e-commerce activities and our interaction with the public in the social media space. Our systems are subject to damage or interruption from computer viruses, malicious attacks and other security breaches. We also rely on various third-party technology providers, and failures or compromises affecting these providers could adversely affect our operations even if our own systems are not directly compromised. The possibility of a cyber-attack on any one or all of these systems is always a serious threat and consumer awareness and sensitivity to privacy breaches and cyber security threats is high. Cybersecurity threats continue to evolve in volume, sophistication and automation, including through the use of artificial intelligence. If a cybersecurity incident occurs, or there is a public perception that we have suffered a breach, our reputation and brand could be damaged and we could be required to expend significant capital and other resources to alleviate problems, such as delayed order processing or fulfillment, disruption of customer service, loss of access to systems or data, regulatory investigations, litigation, contractual claims, increased insurance costs, inability to maintain payment card compliance, or restrictions on our ability to collect, use or transfer data.

Previous wording

In addition, our systems may increasingly incorporate features involving artificial intelligence ("AI"), which is complex, subject to increasing litigation and regulatory scrutiny, and may have errors or inadequacies that are not easily detectable. In some instances, we may make use of third-party artificial intelligence products and services. These features, products, and services may produce unintentional or unexpected outputs that are incorrect, infringe intellectual property or other rights, do not match our business goals, do not comply with our internal policies or applicable legal or contractual requirements, or otherwise are inconsistent with our business goals or brand identities. As a result, our implementation of AI features, products and services could subject us to regulatory action, legal liability, and brand or reputational harm.

Current wording

In addition, our systems may increasingly incorporate features involving AI, which is complex, subject to increasing litigation and regulatory scrutiny, and may have errors or inadequacies that are not easily detectable. In some instances, we may make use of third-party artificial intelligence products and services. These features, products, and services may produce unintentional or unexpected outputs that are incorrect, biased, infringe intellectual property or other rights, do not match our business goals, do not comply with our internal policies or applicable legal or contractual requirements, or otherwise are inconsistent with our business goals or brand identities. As a result, our implementation of AI features, products and services could subject us to regulatory action, legal liability, and brand or reputational harm.

Previous wording

The Company’s franchisees may damage its brands or increase its costs by failing to comply with its franchise agreements or its operating standards. The Company’s franchise business is governed by its Uniform Franchise Disclosure Document, franchise agreements and applicable franchise law. If the Company’s franchisees do not comply with its established operating standards or the terms of the franchise agreements, the 1-800-FLOWERS.COM brands may be damaged. The Company may incur significant additional costs, including time-consuming and expensive litigation, to enforce its rights under the franchise agreements. Additionally, the Company is the primary tenant on certain leases, which the franchisees sublease from the Company. If a franchisee fails to meet its obligations as subtenant, the Company could incur significant costs to avoid default under the primary lease. Furthermore, as a franchisor, the Company has obligations to its franchisees. Franchisees may challenge the performance of the Company’s obligations under the franchise agreements and subject it to costs in defending these claims and, if the claims are successful, costs in connection with their compliance.

Current wording

The Company’s franchisees may damage its brands or increase its costs by failing to comply with its franchise agreements or its operating standards. The Company’s franchise business is governed by its Uniform Franchise Disclosure Document, franchise agreements and applicable franchise law. If the Company’s franchisees do not comply with its established operating standards or the terms of the franchise agreements, the 1-800-FLOWERS.COM brands may be damaged. The Company may incur significant additional costs, including time-consuming and expensive litigation, to enforce its rights under the franchise agreements. Additionally, the Company is the primary tenant on certain leases, which certain franchisees sublease from the Company. If a franchisee fails to meet its obligations as subtenant, the Company could incur significant costs to avoid default under the primary lease. Furthermore, as a franchisor, the Company has obligations to its franchisees. Franchisees may challenge the performance of the Company’s obligations under the franchise agreements and subject it to costs in defending these claims and, if the claims are successful, costs in connection with their compliance.

Previous wording

A privacy or data security breach could expose us to costly government enforcement actions and private litigation and adversely affect our business. An important component of our business involves the receipt, processing, transmittal, and storage ofpersonaland confidential information about our customers. We have programs in place to detect, contain and respond to data security incidents. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures. In addition, hardware, software, or applications we develop or procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deceiving our team members, contractors, vendors, and temporary staff. In addition, security breaches can also occur as a result of intentional or inadvertent breaches by our employees or by persons with whom we have commercial relationships. Any actual or suspected security breach or other compromise of our security measures or those of our third party vendors, whether as a result of banking efforts, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering or otherwise, could harm our reputation and business, damage our brand and make it harder to retain existing customers or acquire new ones, require us to expend significant capital and other resources to address the breach, and result in a violation of applicable laws, regulations or other legal obligations. Moreover, any insurance coverage we may carry may be inadequate to cover the expenses and other potential financial exposure we could face as a result of a privacy or data breach.

Current wording

A privacy or data security breach could expose us to costly government enforcement actions and private litigation and adversely affect our business. An important component of our business involves the receipt, processing, transmittal, and storage ofpersonaland confidential information about our customers. We have programs in place to detect, contain and respond to data security incidents. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures. In addition, hardware, software, or applications we develop or procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deceiving our team members, contractors, vendors, and temporary staff. In addition, security breaches can also occur as a result of intentional or inadvertent breaches by our employees or by persons with whom we have commercial relationships. Any actual or suspected security breach or other compromise of our security measures or those of our third party vendors, whether as a result of hacking efforts, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering or otherwise, could harm our reputation and business, damage our brand and make it harder to retain existing customers or acquire new ones, require us to expend significant capital and other resources to address the breach, and result in a violation of applicable laws, regulations or other legal obligations. Moreover, any insurance coverage we may carry may be inadequate to cover the expenses and other potential financial exposure we could face as a result of a privacy or data breach.

Previous wording

A variety of federal, state and international laws and regulations govern the collection, use, retention, sharing, export and security of personal information. These include laws and regulations that are intended to protect the privacy of children online, including the Children’s Online Privacy Protection Act, a U.S. federal law that requires websites and online services to obtain parental consent before collecting personal information from children under 13, as well as regulations adopted by the Federal Trade Commission, and a growing array of state laws. We also may choose to comply with, or may be required to comply with, self-regulatory obligations or other industry standards. Laws and regulations relating to privacy, data protection and consumer protection are evolving and subject to potentially differing interpretations, and laws providing for new privacy and security rights and requirements may overlap with each other, and may be enacted or come into effect in different jurisdictions. These requirements may be enacted, interpreted or applied in a manner that is inconsistent from one jurisdiction to another or in a manner that conflicts with other rules or our practices. As a result, some of our practices may be in conflict, or may not comply in the future with all such evolving laws, regulations, requirements and obligations. Any failure, or perceived failure, by us to comply with any federal, state or international privacy or consumer protection-related laws, regulations, regulatory guidance, orders to which we may be subject or other legal obligations relating to privacy or consumer protection could adversely affect our reputation, brand and business, and may result in claims, proceedings or actions against us by governmental entities or others, including claims for statutory damages asserted on behalf of purported classes of affected persons or other liabilities or require us to change our business practices, including changing, limiting or ceasing altogether the collection, use, sharing, or transfer of data relating to customers, which could materially adversely affect our business, financial condition and operating results.

Current wording

Failure to comply with federal, state and international laws and regulations relating to privacy, data protection and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, could adversely affect our business and our financial condition. A variety of federal, state and international laws and regulations govern the collection, use, retention, sharing, export and security of personal information. These include laws and regulations that are intended to protect the privacy of children online, including the Children’s Online Privacy Protection Act, a U.S. federal law that requires websites and online services to obtain parental consent before collecting personal information from children under 13, as well as regulations adopted by the Federal Trade Commission, and a growing array of state laws. We also may choose to comply with, or may be required to comply with, self-regulatory obligations or other industry standards. Laws and regulations relating to privacy, data protection and consumer protection are evolving and subject to potentially differing interpretations, and laws providing for new privacy and security rights and requirements may overlap with each other, and may be enacted or come into effect in different jurisdictions. These requirements may be enacted, interpreted or applied in a manner that is inconsistent from one jurisdiction to another or in a manner that conflicts with other rules or our practices. As a result, some of our practices may be in conflict, or may not comply in the future with all such evolving laws, regulations, requirements and obligations. Any failure, or perceived failure, by us to comply with any federal, state or international privacy or consumer protection-related laws, regulations, regulatory guidance, orders to which we may be subject or other legal obligations relating to privacy or consumer protection could adversely affect our reputation, brand and business, and may result in claims, proceedings or actions against us by governmental entities or others, including claims for statutory damages asserted on behalf of purported classes of affected persons or other liabilities or require us to change our business practices, including changing, limiting or ceasing altogether the collection, use, sharing, or transfer of data relating to customers, which could materially adversely affect our business, financial condition and operating results.

Previous wording

Our business is subject to evolving corporate governance and public disclosure regulations and expectations. We are subject to evolving rules and regulations promulgated by a number of federal, state, and local governmental and self-regulatory organizations, including the United States Securities and Exchange Commission (“SEC”), the Nasdaq Stock Exchange and the Financial Accounting Standards Board. These rules and regulations continue to increase in scope and complexity, making compliance more difficult, expensive and uncertain. In addition, public companies are encountering increased scrutiny on ESG matters and related disclosures. These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations. For example, developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards. We could be criticized, fined or suffer other adverse consequences based on the inaccuracy, inadequacy or incompleteness of our reporting. If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we otherwise fail to comply with ESG-related regulations, our reputation, business, financial performance and growth could be adversely affected.

Current wording

Our business is subject to evolving corporate governance and public disclosure regulations and expectations. We are subject to evolving rules and regulations promulgated by a number of federal, state, and local governmental and self-regulatory organizations, including the SEC, the Nasdaq Stock Exchange and the Financial Accounting Standards Board. These rules and regulations continue to increase in scope and complexity, making compliance more difficult, expensive and uncertain. In addition, public companies are encountering increased scrutiny on Environmental, Social, and Governance ("ESG") matters and related disclosures. These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations. For example, developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards. We could be criticized, fined or suffer other adverse consequences based on the inaccuracy, inadequacy or incompleteness of our reporting. If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we otherwise fail to comply with ESG-related regulations, our reputation, business, financial performance and growth could be adversely affected.