1 800 FLOWERS COM INC

1-800-FLOWERS.COM, Inc. operates in the floral, gift, and gourmet food industries, serving a broad range of celebratory and gifting occasions. The Company's e-commerce business platform features an 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. The Company also operates BloomNet, an international floral and gift industry service provider, Napco, a resource for floral gifts and seasonal décor, DesignPac Gifts, a manufacturer of gift baskets and towers, Alice's Table, a lifestyle business offering digital on-demand floral and culinary experiences, and Card Isle, an e-commerce greeting card service. The Company's quarterly results experience seasonal fluctuations, with the Thanksgiving through Christmas holiday season, which falls within the Company's second fiscal quarter, generating over 40% of the Company's annual revenues and all of its earnings. During fiscal 2025, the fiscal second quarter revenues represented approximately 46% of annual revenues, while the first, third, and fourth quarters generated 14%, 20%, and 20% of annual revenues, respectively.

The Company faces intense competition in each of its individual product categories. In the floral industry, competitors include retail floral shops, online marketplaces, floral retailers, social media platform retailers, catalog companies, floral telemarketers and wire services, and supermarkets, mass merchants, and specialty retailers with floral departments. The plant, gift basket, and gourmet foods categories are also highly competitive and fragmented. The Company believes the strength of its brands, product selection, customer relationships, technology infrastructure, and fulfillment capabilities position it to compete effectively. The Company's consolidated customer database includes 0.9 million Celebrations Passport members who, along with multi-brand customers, represent the best customer cohorts in terms of frequency, retention, and average spend. Multi-brand customers and Celebrations Passport members represent approximately 20% of customers and approximately 40% of revenue. Celebrations Passport and multi-brand customers spend an average of 2x to 3x the amount spent by other customers.

The Company generates revenue primarily through the sale of merchandise, services, and outbound shipping charges, less discounts, returns, and credits, across three business segments: Consumer Floral & Gifts, Gourmet Foods & Gift Baskets, and BloomNet. Revenue is derived from e-commerce channels (online and telephonic) and other channels including wholesale, retail, and BloomNet services. The Company operates a Celebrations Passport loyalty program that provides members with free standard shipping and no service charge on eligible products across its portfolio of brands. The Company's business model is built on a hybrid fulfillment system that combines the use of BloomNet independent florists, Company distribution centers, and vendors who ship directly to customers, enabling same-day, next-day, and any-day delivery.

The Consumer Floral & Gifts segment includes the operations of 1-800-Flowers.com, Personalization Mall, Things Remembered, FruitBouquets.com, Flowerama, and Alice's Table. This segment is a direct-to-consumer, multi-channel provider of fresh flowers, plants, fruit and gift basket products, balloons, candles, keepsake gifts, jewelry, plush stuffed animals, artistically carved fresh fruit arrangements, personalized gifts and keepsakes, and lifestyle offerings including digital on-demand floral, culinary, and other experiences. For fiscal 2025, the Consumer Floral & Gifts segment reported net revenues of $776,781 thousand ¹ and gross profit of $305,508 thousand ² with a gross margin of 39.3% ³. The Gourmet Foods & Gift Baskets segment includes the operations of Harry & David, Wolferman's Bakery, Vital Choice, Moose Munch, Cheryl's Cookies, Mrs. Beasley's, The Popcorn Factory, DesignPac, 1-800-Baskets.com, Simply Chocolate, Shari's Berries, and Scharffen Berger. This segment is a multi-channel specialty retailer and producer of premium gift-quality fruit, gourmet food products, cookies, baked gifts, popcorn, chocolates, confections, gift baskets, seafood, and prepared meals. For fiscal 2025, the Gourmet Foods & Gift Baskets segment reported net revenues of $810,941 thousand ⁴ and gross profit of $298,052 thousand ⁵ with a gross margin of 36.8% ⁶. The BloomNet segment includes the operations of BloomNet, Napco, and Card Isle. This segment provides products and services to the professional florist industry, including settlement processing, advertising, access services, web hosting, marketing, designer education, point of sale systems, and wholesale floral supplies. For fiscal 2025, the BloomNet segment reported net revenues of $98,707 thousand ⁷ and gross profit of $47,914 thousand ⁸ with a gross margin of 48.5% ⁹.

During fiscal 2025, the Company announced a multi-year Celebrations strategy, a comprehensive evolution of the Company that begins with transforming the customer journey into a sentiment-led experience. On July 1, 2024, the Company completed its acquisition of Scharffen Berger, a manufacturer of giftable premium chocolate and specialty treats, for approximately $3.3 million ¹⁰ in cash, expanding the Company's product offerings in the Gourmet Foods & Gift Baskets segment. On April 3, 2024, the Company completed its acquisition of Card Isle, an e-commerce greeting card company, for $3.6 million ¹¹ in cash, expanding the Company's presence in the greeting card category across its brands. On January 10, 2023, the Company completed its acquisition of certain assets of the Things Remembered brand for $5.0 million ¹² in cash, which was integrated into the Personalization Mall brand. During fiscal 2025, the Company recorded aggregate non-cash impairment charges of $143.8 million ¹³ related to goodwill and certain trademarks, including $138.2 million ¹⁴ in the third quarter comprised of $113.4 million ¹⁵ related to goodwill and $24.8 million ¹⁶ attributable to the Personalization Mall tradename, with an immaterial adjustment of $5.6 million ¹⁷ in the fourth quarter. The Company repurchased a total of $10.2 million ¹⁸ (1,274,559 shares ¹⁹) during fiscal 2025 under its stock repurchase plan. As of June 29, 2025, $11.4 million ²⁰ remains authorized under the plan.

For fiscal 2025, total net revenues decreased by $145.8 million ²¹, or 8.0% ²², to $1,685,658 thousand ²³, compared to $1,831,421 thousand ²⁴ in fiscal 2024. The decline was primarily due to continued slowing demand for everyday gifting occasions as discretionary income remains under pressure and consumers continue to moderate their spending, along with a highly promotional consumer environment during the holidays. Gross margins declined throughout the year, ending at 38.7% ²⁵, a 140-basis point ²⁶ decrease over fiscal 2024, primarily due to higher cost of merchandise and deleveraging of fixed costs. Net loss was $199,993 thousand ²⁷, compared with a net loss of $6,105 thousand ²⁸ in fiscal 2024. Adjusted EBITDA for fiscal 2025 was $29,166 thousand ²⁹, compared with $93,067 thousand ³⁰ in fiscal 2024, reflecting a decline of $63.9 million ³¹ driven by lower sales, reduced gross margin, and increased advertising costs.

The Company's multi-year Celebrations strategy is a key growth vector, described as a comprehensive evolution that begins with transforming the customer journey into a sentiment-led experience, striving 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. The Company is also focused on broadening its reach beyond its e-commerce sites into new channels as part of its strategic priorities for fiscal 2026. The Company continues to execute its vision to build a Celebratory Ecosystem, including a collection of premium gifting brands and an increasing suite of products and services designed to help customers deliver smiles. The Company intends to continue to develop differentiated products and signature collections that customers have embraced and come to expect.

The Company is investing in emerging marketing channels and customer engagement technologies, with particular emphasis on artificial intelligence-driven personalization, enhanced mobile commerce capabilities, and innovative partnership models that align with evolving consumer preferences and purchasing behaviors. The Company's strategic priorities for fiscal 2026 include driving cost savings and organizational efficiency, building a customer-centric and data-driven organization, broadening reach beyond e-commerce sites into new channels, and strengthening the team through enhanced talent and accountability. The Company is approaching fiscal 2026 as a pivotal period of foundation setting, aiming to position itself to support its multi-year Celebrations strategy and fuel future growth by transforming into a customer-centric, data-driven organization with clear objectives and return on investment-focused decision making.

The Company's strategic priorities for fiscal 2026 include driving cost savings and organizational efficiency. The Company experienced gross margin decline in fiscal 2025, ending at 38.7% ³², a 140-basis point ³³ decrease over fiscal 2024, primarily due to higher cost of merchandise and deleveraging of fixed costs. The Company's approach to fiscal 2026 includes a renewed commitment to agility and customer-centricity, with the belief that foundational steps will set the stage for sustainable revenue and profit growth in the years to come.

The Company's hybrid fulfillment system combines the use of BloomNet independent florists, Company distribution centers, and vendors who ship directly to customers. The Company's products are distributed from a combination of Company-owned and leased distribution facilities across the country, which are shared by its brands in order to reduce both transit time to the customer and overall logistics costs. The Company utilizes a global supply chain that includes both U.S. and international suppliers. In preparation for the Company's second quarter holiday season, the Company significantly increases its inventories, with this seasonal build traditionally financed by cash flows from operations, supplemented by borrowings under the Company's revolving credit facility. The Company has historically repaid the balance of its revolving credit facility with cash generated from operations prior to the end of the Company's fiscal second quarter.

Capital expenditures for fiscal 2025 were $41,463 thousand ³⁴, compared to $38,632 thousand ³⁵ in fiscal 2024. The Company has a stock repurchase plan through which purchases can be made from time to time in the open market and through privately negotiated transactions. On April 22, 2021, the Company's Board of Directors authorized an increase to its stock repurchase plan of up to $40.0 million ³⁶. On February 3, 2022, the Company's Board of Directors authorized an additional increase to its stock repurchase plan of up to $40.0 million ³⁷. As of June 29, 2025, $11.4 million ³⁸ remains authorized under the plan. The Company has never declared or paid cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company's existing credit facilities contain limitations on the payment of dividends.

The broader macro-economic conditions have continued to impact consumers, with consumer confidence and sentiment declining in response to various uncertainties, including potential tariff impacts on inflation, a softening labor market, and shifting economic policies. The Company experienced a highly promotional consumer environment during the holidays in fiscal 2025. The Company is dependent on international vendors for its supply of flowers, as well as certain components and products, exposing it to risks including import duties and quotas such as the tariffs imposed on flowers imported from Colombia during fiscal 2025, agricultural limitations, changes in trading status, economic uncertainties, currency fluctuations, severe weather, work stoppages, foreign government regulations, political unrest, and trade restrictions.

The Company faces risks from increased shipping costs and supply chain disruptions, as many of its products are delivered to customers either directly from the manufacturer or from the Company's fulfillment centers. 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. Various diseases, pests, fungi, viruses, drought, frosts, hail, wildfires, floods, and certain other weather conditions could affect the quality and quantity of fruit production in the Company's Harry & David orchards. The ripening of fruits in the Harry & David orchards can happen earlier than predicted due to warmer temperatures, resulting in an oversupply, or later than predicted due to colder temperatures, causing delays in product shipments and potentially not being able to timely meet customer demand during the critical holiday season.

The Company faces material risk from macroeconomic conditions impacting consumer discretionary spending, which has resulted in declining revenues and a highly promotional environment. The Company is dependent on international vendors for its supply of flowers, exposing it to risks including import duties and quotas such as the tariffs imposed on flowers imported from Colombia during fiscal 2025. The Company recorded aggregate non-cash impairment charges of $143.8 million ³⁹ in fiscal 2025 related to goodwill and certain trademarks, and may be required to record additional impairment charges in the future if actual or projected performance declines further. The Company's business is highly seasonal, with the fiscal second quarter generating over 40% of annual revenues and all of its earnings, and if revenues during peak periods do not meet expectations, the Company may not generate sufficient revenue to offset increased costs. The Company's existing credit facilities contain financial covenants that could limit operating flexibility, and failure to comply could result in an event of default enabling lenders to declare outstanding principal immediately due and payable.

Management's message in the filing characterizes fiscal 2025 as a challenging year from a top and bottom line perspective, with broader macro-economic conditions continuing to impact consumers. Management states that the Company is approaching fiscal 2026 as a pivotal period of foundation setting, with strategic priorities focused on positioning the organization for long-term growth, including driving cost savings and organizational efficiency, building a customer-centric and data-driven organization, broadening reach beyond e-commerce sites into new channels, and strengthening the team through enhanced talent and accountability. Management emphasizes a renewed commitment to agility and customer-centricity, believing these foundational steps will set the stage for sustainable revenue and profit growth in the years to come. The Company announced a multi-year Celebrations strategy, a comprehensive evolution that begins with transforming the customer journey into a sentiment-led experience, striving to advance the Company's vision of becoming the premier relationship destination for heartfelt expressions.