0001084869 1 800 FLOWERS COM INC false --06-29 Q1 2025 0.01 0.01 10,000,000 10,000,000 0 0 0.01 0.01 200,000,000 200,000,000 58,798,430 58,792,695 0.01 0.01 200,000,000 200,000,000 32,348,221 32,348,221 21,805,703 21,645,290 5,280,000 5,280,000 2.4 4.9 2021 2022 2023 2020 2021 2022 2023 2024 2017 2018 2019 2020 2021 2022 2023 2024 3 false false false false (a) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, as well as Stock-based compensation. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment. The amortization of intangible assets for the years ended June 30, 2024, July 2, 2023 and July 3, 2022 was $4.4 million, $4.2 million and $3.9 million, respectively. Future estimated amortization expense is as follows: 2025 - $2.1 million, 2026 - $1.4 million, 2027 -$0.6 million, 2028 -$0.3 million, 2029 -$0.2 million, and thereafter -$0.1 million. The Company has established a NQDC Plan for certain members of senior management. Deferred compensation plan assets are invested in mutual funds held in a “rabbi trust,” which is restricted for payment to participants of the NQDC Plan. 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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2024

 

or 

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

 

Commission File No. 0-26841

qlinearlogforcover20percent.jpg

 

1-800-FLOWERS.COM, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

11-3117311

(State of incorporation)

(I.R.S. Employer Identification No.)

Two Jericho Plaza, Suite 200, Jericho, NY 11753

(516) 237-6000

(Address of principal executive offices) (Zip code)

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Class A common stock

FLWS

The Nasdaq Stock Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐         

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☑   No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 

☐Large accelerated filer

☑Accelerated filer

☐Non-accelerated filer

☐Smaller reporting company

 

☐Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☑

 

The number of shares outstanding of each of the Registrant’s classes of common stock as of October 28, 2024:

 

Class A common stock: 36,782,727

Class B common stock: 27,068,221

 

 
Table of Contents

   

 

1-800-FLOWERS.COM, Inc.

FORM 10-Q

For the quarterly period ended September 29, 2024

TABLE OF CONTENTS

 

   

Page

Part I.

Financial Information

  

Item 1.

Condensed Consolidated Financial Statements

1
 

Condensed Consolidated Balance Sheets – September 29, 2024 (Unaudited) and June 30, 2024

1
 

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) – Three Months Ended September 29, 2024 and October 1, 2023

2
 

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) – Three Months Ended September 29, 2024 and October 1, 2023

3
 

Condensed Consolidated Statements of Cash Flows (Unaudited) – Three Months Ended September 29, 2024 and October 1, 2023

4
 

Notes to Condensed Consolidated Financial Statements (Unaudited)

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

31

Item 4.

Controls and Procedures

31
     

Part II.

Other Information

32

Item 1.

Legal Proceedings

32

Item 1A.

Risk Factors

32

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

33

Item 3.

Defaults upon Senior Securities

33

Item 4.

Mine Safety Disclosures

33

Item 5.

Other Information

33

Item 6.

Exhibits

34
     

Signatures

35

 

 
Table of Contents
 

 

 

PART I. – FINANCIAL INFORMATION

 

ITEM 1. – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except for share data)

 

  

September 29, 2024

  

June 30, 2024

 
  

(unaudited)

     

Assets

        

Current assets:

        

Cash and cash equivalents

 $8,407  $159,437 

Trade receivables, net

  41,024   18,024 

Inventories

  275,323   176,591 

Prepaid and other

  60,960   31,680 

Total current assets

  385,714   385,732 
         

Property, plant and equipment, net

  225,239   223,789 

Operating lease right-of-use assets

  112,926   113,926 

Goodwill

  156,648   156,537 

Other intangibles, net

  115,531   116,216 

Other assets

  38,566   36,448 

Total assets

 $1,034,624  $1,032,648 
         

Liabilities and Stockholders' Equity

        

Current liabilities:

        

Accounts payable

 $63,732  $80,005 

Accrued expenses

  128,926   121,303 

Current maturities of long-term debt

  57,500   10,000 

Current portion of long-term operating lease liabilities

  16,836   16,511 

Total current liabilities

  266,994   227,819 
         

Long-term debt, net

  172,293   177,113 

Long-term operating lease liabilities

  104,398   105,866 

Deferred tax liabilities, net

  18,794   19,402 

Other liabilities

  38,728   36,106 

Total liabilities

  601,207   566,306 
         

Commitments and contingencies (See Note 14)

          
         

Stockholders' equity:

        

Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued

  -   - 

Class A common stock, $0.01 par value, 200,000,000 shares authorized, 58,798,430 and 58,792,695 shares issued at September 29, 2024 and June 30, 2024, respectively

  588   588 

Class B common stock, $0.01 par value, 200,000,000 shares authorized, 32,348,221 shares issued at September 29, 2024 and June 30, 2024

  323   323 

Additional paid-in capital

  401,685   399,165 

Retained earnings

  230,788   264,978 

Accumulated other comprehensive loss

  (127)  (127)

Treasury stock, at cost, 21,805,703 and 21,645,290 Class A shares at September 29, 2024 and June 30, 2024, respectively and 5,280,000 Class B shares at September 29, 2024 and June 30, 2024

  (199,840)  (198,585)

Total stockholders’ equity

  433,417   466,342 

Total liabilities and stockholders’ equity

 $1,034,624  $1,032,648 

 

See accompanying Notes to Condensed Consolidated Financial Statements. 

 

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1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except for per share data)

(unaudited)

 

   

Three Months Ended

  
   

September 29,

    

October 1,

  
   

2024

    

2023

  
                 

Net revenues

   $ 242,090     $ 269,050  

Cost of revenues (excludes depreciation and amortization)

     149,771       167,122  

Gross profit

     92,319       101,928  

Operating expenses:

                

Marketing and sales

     82,097       82,518  

Technology and development

     15,639       15,304  

General and administrative

     28,526       28,489  

Depreciation and amortization

     13,038       13,194  

Total operating expenses

     139,300       139,505  

Operating loss

     (46,981 )     (37,577 )

Interest expense, net

     3,360       3,482  

Other (income) expense, net

     (1,767 )     474  

Loss before income taxes

     (48,574 )     (41,533 )

Income tax benefit

     (14,384 )     (10,291 )

Net loss and comprehensive loss

     (34,190 )     (31,242 )
                 

Basic and diluted net loss per common share

   $ (0.53 )   $ (0.48 )
                 

Basic and diluted weighted average shares used in the calculation of net loss per common share

     64,198       64,785  

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share data)

(unaudited)

 

   

Three Months Ended September 29, 2024 and October 1, 2023

  
                                                   

Accumulated

                          
   

Common Stock

    

Additional

            

Other

                    

Total

  
   

Class A

    

Class B

    

Paid-in

    

Retained

    

Comprehensive

    

Treasury Stock

    

Stockholders’

  
   

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Earnings

    

Loss

    

Shares

    

Amount

    

Equity

  
                                                                                 

Balance at June 30, 2024

     58,792,695     $ 588       32,348,221     $ 323     $ 399,165     $ 264,978     $ (127 )     26,925,290     $ (198,585 )   $ 466,342  

Net loss

     -       -       -       -       -       (34,190 )     -       -       -       (34,190 )

Stock-based compensation

     1,000       -       -       -       2,479       -       -       -       -       2,479  

Exercise of stock options

     4,735       -       -       -       41       -       -       -       -       41  

Acquisition of Class A treasury stock

     -       -       -       -       -       -       -       160,413       (1,255 )     (1,255 )

Balance at September 29, 2024

     58,798,430     $ 588       32,348,221     $ 323     $ 401,685     $ 230,788     $ (127 )     27,085,703     $ (199,840 )   $ 433,417  
                                                                                 

Balance at July 2, 2023

     58,273,747     $ 583       32,348,221     $ 323     $ 388,215     $ 271,083     $ (170 )     25,845,875     $ (188,191 )   $ 471,843  

Net loss

     -       -       -       -       -       (31,242 )     -       -       -       (31,242 )

Stock-based compensation

     35,800       -       -       -       2,364       -       -       -       -       2,364  

Acquisition of Class A treasury stock

     -       -       -       -       -       -       -       10,483       (74 )     (74 )

Balance at October 1, 2023

     58,309,547     $ 583       32,348,221     $ 323     $ 390,579     $ 239,841     $ (170 )     25,856,358     $ (188,265 )   $ 442,891  

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

   

Three Months Ended

  
   

September 29,

    

October 1,

  
   

2024

    

2023

  
                 

Operating activities:

                

Net loss

   $ (34,190 )   $ (31,242 )

Reconciliation of net loss to net cash used in operating activities, net of acquisitions:

                

Depreciation and amortization

     13,038       13,194  

Amortization of deferred financing costs

     180       180  

Deferred income taxes

     (607 )     (579 )

Bad debt expense

     84       586  

Stock-based compensation

     2,479       2,364  

Other non-cash items

     255       270  

Changes in operating items:

                

Trade receivables

     (23,025 )     (24,407 )

Inventories

     (97,439 )     (89,287 )

Prepaid and other

     (29,237 )     (14,764 )

Accounts payable and accrued expenses

     (8,806 )     (42 )

Other assets and liabilities

     27       (157 )

Net cash used in operating activities

     (177,241 )     (143,884 )
                 

Investing activities:

                

Acquisitions, net of cash acquired

     (3,000 )     -  

Capital expenditures

     (12,075 )     (6,974 )

Net cash used in investing activities

     (15,075 )     (6,974 )
                 

Financing activities:

                

Acquisition of treasury stock

     (1,255 )     (74 )

Proceeds from exercise of employee stock options

     41       -  

Proceeds from bank borrowings

     45,000       35,000  

Repayment of bank borrowings

     (2,500 )     (2,500 )

Net cash provided by financing activities

     41,286       32,426  
                 

Net change in cash and cash equivalents

     (151,030 )     (118,432 )

Cash and cash equivalents:

                

Beginning of period

     159,437       126,807  

End of period

   $ 8,407     $ 8,375  

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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1-800-FLOWERS.COM, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

 

 

Note 1 – Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by 1-800-FLOWERS.COM, Inc. and Subsidiaries (the “Company”) in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 29, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending June 29, 2025. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which provides a more complete understanding of our accounting policies, financial position, operating results and other matters.

 

The Company’s quarterly results may experience seasonal fluctuations. Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s second fiscal quarter, is expected to generate over 40% of the Company’s annual revenues, and all of its earnings. Due to the number of major floral gifting occasions, including Mother's Day, Valentine’s Day, Easter, and Administrative Professionals Week, revenues also have historically risen during the Company’s fiscal third and fourth quarters in comparison to its fiscal first quarter.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

Revenue Recognition

 

Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Service and outbound shipping charged to customers are recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers.

 

A description of our principal revenue generating activities is as follows:

 

●

E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due prior to the date of shipment.

●

Retail revenues - consumer products sold through our retail stores. Revenue is recognized when control of the goods is transferred to the customer, at the point of sale, at which time payment is received.

●

Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer.

●

BloomNet Services - membership fees as well as other service offerings to florists. Membership and other subscription-based fees are recognized monthly as earned. Services revenues related to orders sent through the floral network are variable, based on either the number of orders or the value of orders, and are recognized in the period in which the orders are delivered. The contracts within BloomNet Services are typically month-to-month and, as a result no consideration allocation is necessary across multiple reporting periods. Payment is typically due less than 30 days from the date the services were performed. 

 

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Deferred Revenues

 

Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. As such, customer orders are recorded as deferred revenue prior to shipment or rendering of product or services. Deferred revenues primarily relate to e-commerce orders placed, but not shipped, prior to the end of the fiscal period, as well as for subscription programs, including our various food, wine, and plant-of-the-month clubs and our Celebrations Passport® program.

 

Our total deferred revenue as of  June 30, 2024 was $25.0 million (included in “Accrued expenses” on our consolidated balance sheets), of which $13.0 million was recognized as revenue during the three months ended September 29, 2024. The deferred revenue balance as of  September 29, 2024 was $24.6 million.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires enhanced disclosures about significant segment expenses, includes enhanced interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements and related disclosures.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires the disclosure of additional information with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes and requires greater detail about significant reconciling items in the reconciliation. Additionally, the amendment requires disaggregated information pertaining to taxes paid, net of refunds received, for federal, state, and foreign income taxes. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and allows for either a prospective or retrospective approach on adoption. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.
 

Note 2 – Net Income (Loss) Per Common Share

 

Basic net loss per common share is computed by dividing the net loss during the period by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed using the weighted average number of common shares outstanding during the period and excludes the dilutive potential common shares (consisting of unvested restricted stock awards), as their inclusion would be antidilutive.  As a result of the net loss for the three months ended September 29, 2024 and October 1, 2023, there is no dilutive impact to the net loss per share calculation for the respective periods.   
 

Note 3 – Acquisitions

 

Acquisition of Scharffen Berger

 

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 hand to fund the purchase.

 

The total consideration of $3.3 million was primarily allocated to the identifiable assets acquired and liabilities assumed based on the preliminary estimates of their fair values on the acquisition date, including: property, plant and equipment of $2.0 million, inventory of $1.3 million and goodwill of $0.1 million (deductible for income tax purposes), offset by net liabilities of $0.1 million.  The Company is in the process of finalizing its allocation and this may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain additional intangible assets, revision of useful lives of intangible assets, and the determination of any residual amount that will be allocated to goodwill.

 

Scharffen Berger annual revenues and results of operations, based on its most recent available financial information, is deemed immaterial to the Company's consolidated financial statements, and, as such pro forma results of operations have not been presented.

 

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Acquisition of Card Isle

 

On April 3, 2024, the Company, within its BloomNet segment, 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 hand to fund the purchase.

 

The total consideration of $3.6 million was primarily allocated to the identifiable assets acquired and liabilities assumed based on the preliminary estimates of their fair values on the acquisition date, including: goodwill of $3.0 million (deductible for income tax purposes) and artist contracts of $0.6 million (5-year life).  The Company is in the process of finalizing its allocation and this may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain additional intangible assets, revisions of useful lives of intangible assets, and the determination of any residual amount that will be allocated to goodwill.

 

Card Isle annual revenues and results of operations, based on its most recently available financial information, is deemed immaterial to the Company's consolidated financial statements, and, as such pro forma results of operations have not been presented.
 

Note 4 – Inventory

 

The Company’s inventory, valued at the lower of cost or net realizable value, includes purchased and manufactured finished goods for sale, packaging supplies, crops, raw material ingredients for manufactured products and associated manufacturing labor, and is classified as follows:

 

  

September 29, 2024

  

June 30, 2024

 
  

(in thousands)

 

Finished goods

 $170,479  $94,590 

Work-in-process

  26,526   25,849 

Raw materials

  78,318   56,152 

Total inventory

 $275,323  $176,591 

 
 

Note 5 – Goodwill and Intangible Assets, Net

 

The following table presents goodwill by segment and the related change in the net carrying amount:

 

          

Gourmet

     
  

Consumer

      

Foods &

     
  

Floral &

      

Gift

     
  

Gifts

  

BloomNet

  

Baskets

  

Total

 
  

(in thousands)

 

Balance at June 30, 2024

 $153,577  $2,960  $-  $156,537 

Acquisition of Scharffen Berger

  -   -   111   111 

Balance at September 29, 2024

 $153,577  $2,960  $111  $156,648 

 

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The Company’s other intangible assets consist of the following:

 

     

September 29, 2024

  

June 30, 2024

 
     

Gross

          

Gross

         
  

Amortization

  

Carrying

  

Accumulated

      

Carrying

  

Accumulated

     
  

Period

  

Amount

  

Amortization

  

Net

  

Amount

  

Amortization

  

Net

 
  

(in years)

  

(in thousands)

 

Intangible assets with determinable lives

                           

Investment in licenses

 14 - 16  $7,420  $6,701  $719  $7,420  $6,674  $746 

Customer lists

 3 - 10   29,647   26,576   3,071   29,647   25,932   3,715 

Other

 5 - 14   2,946   2,678   268   2,946   2,664   282 

Total intangible assets with determinable lives

     40,013   35,955   4,058   40,013   35,270   4,743 

Trademarks with indefinite lives

     111,473   -   111,473   111,473   -   111,473 

Total identifiable intangible assets

    $151,486  $35,955  $115,531  $151,486  $35,270  $116,216 

 

Future estimated amortization expense is as follows: remainder of Fiscal 2025 - $1.4 million, Fiscal 2026 - $1.4 million, Fiscal 2027 - $0.6 million, Fiscal 2028 - $0.3 million, Fiscal 2029 - $0.2 million and thereafter - $0.1 million.
 

Note 6 – Investments

 

Equity investments without a readily determinable fair value

 

Investments in non-marketable equity instruments of private companies, where the Company does not possess the ability to exercise significant influence, are accounted for at cost, less impairment (assessed qualitatively at each reporting period), adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. These investments are included within “Other assets” in the Company’s consolidated balance sheets. The aggregate carrying amount of the Company’s cost method investments was $2.4 million as of  September 29, 2024 and June 30, 2024, respectively. 

 

Equity investments with a readily determinable fair value

 

The Company also holds certain trading securities associated with its Non-Qualified Deferred Compensation Plan (“NQDC Plan”). These investments are measured using quoted market prices at the reporting date and are included within the “Other assets” line item in the consolidated balance sheets (see Note 9 - Fair Value Measurements). 

   

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Note 7 – Debt, Net

 

The Company’s current and long-term debt consists of the following:

 

  

September 29, 2024

  

June 30, 2024

 
  

(in thousands)

 

Revolver

 $45,000  $- 

Term Loans

  187,500   190,000 

Deferred financing costs

  (2,707)  (2,887)

Total debt

  229,793   187,113 

Less: current maturities of long-term debt

  57,500   10,000 

Long-term debt, net

 $172,293  $177,113 

 

On June 27, 2023, the Company, certain of its U.S. subsidiaries, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent entered into a Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”). The Third Amended Credit Agreement amended and restated the Company’s Second Amended and Restated Credit Agreement, dated as of May 31, 2019 (as amended by the First Amendment, dated as of August 20, 2020, the Second Amendment, dated as of November 8, 2021, and the Third Amendment, dated as of August 29, 2022). The Third Amended Credit Agreement, among other modifications: (i) increased the amount of the outstanding term loan (“Term Loan”) to $200 million, (ii) decreased the amount of the commitments in respect of the revolving credit facility to $225 million, subject to a seasonal reduction to an aggregate amount of $125 million for the period from January 1 to August 1, (iii) extended the maturity date of the outstanding term loan and the revolving credit facilities to June 27, 2028, and (iv) increased the applicable interest rate margins for SOFR and base rate loans by 25 basis points.

 

For each borrowing under the Third Amended Credit Agreement, the Company may elect that such borrowing bear interest at an annual rate equal to either: (1) a base rate plus an applicable margin varying based on the Company’s consolidated leverage ratio, where the base rate is the highest of (a) the prime rate, (b) the New York fed bank rate plus 0.5%, and (c) an adjusted SOFR rate for a one month interest period plus 1% or (2) an adjusted SOFR for rate plus an applicable margin varying based on the Company’s consolidated leverage ratio. The adjusted SOFR rate includes a credit spread adjustment of 0.1% for all interest periods.

 

The Third Amended Credit Agreement requires that while any borrowings or commitments are outstanding the Company comply with certain financial covenants and affirmative covenants as well as certain negative covenants that, subject to certain exceptions, limit the Company’s ability to, among other things, incur additional indebtedness, make certain investments and make certain restricted payments. The Company was in compliance with these covenants as of September 29, 2024. The Third Amended Credit Agreement is secured by substantially all of the assets of the Company.

 

The principal of the Term Loan is payable at a rate of $2.5 million for the first 8 quarterly installments beginning on September 29, 2023, increasing to a quarterly payment of $5.0 million, commencing on September 26, 2025, for the remaining 11 payments, with the remaining balance of $125.0 million due upon maturity on June 27, 2028.

 

Future principal term loan payments under the Third Amended Credit Agreement are as follows: $7.5 million – remainder of Fiscal 2025, $20.0 million – Fiscal 2026, $20.0 million – Fiscal 2027, and $140.0 million – Fiscal 2028.

   

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Note 8 – Property, Plant and Equipment, Net

 

The Company’s property, plant and equipment, net consists of the following:

 

   

September 29, 2024

    

June 30, 2024

  
   

(in thousands)

  

Land

   $ 33,827     $ 33,827  

Orchards in production and land improvements

     20,917       20,604  

Building and building improvements

     69,410       69,089  

Leasehold improvements

     31,257       31,289  

Production equipment

     134,806       131,664  

Furniture and fixtures

     9,330       9,325  

Computer and telecommunication equipment

     42,820       42,159  

Software

     196,207       176,160  

Capital projects in progress

     12,777       23,172  

Property, plant and equipment, gross

     551,351       537,289  

Accumulated depreciation and amortization

     (326,112 )     (313,500 )

Property, plant and equipment, net

   $ 225,239     $ 223,789  

 
 

Note 9 – Fair Value Measurements

 

Cash and cash equivalents, trade and other receivables, prepaids, accounts payable and accrued expenses are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Although no trading market exists, the Company believes that the carrying amount of its debt approximates fair value due to its variable nature (these are level 2 investments). The Company’s investments in non-marketable equity instruments of private companies are carried at cost and are periodically assessed for other-than-temporary impairment when an event or circumstances indicate that an other-than-temporary decline in value may have occurred. The Company’s remaining financial assets and liabilities are measured and recorded at fair value (see table below). The Company’s non-financial assets, such as definite lived intangible assets and property, plant and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Goodwill and indefinite lived intangibles are tested for impairment annually, or more frequently, if events occur or circumstances change such that it is more likely than not that an impairment may exist, as required under the accounting standards.

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the guidance are described below:

 

Level 1

Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2

Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3

Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

 

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The following table presents by level, within the fair value hierarchy, financial assets and liabilities measured at fair value on a recurring basis:

 

  

Carrying

  

Fair Value Measurements

 
  

Value

  

Assets (Liabilities)

 
      

Level 1

  

Level 2

  

Level 3

 
  

(in thousands)

 

Assets (Liabilities) as of September 29, 2024

                

Trading securities held in a “rabbi trust” (1)

 $35,425  $35,425  $-  $- 
  $35,425  $35,425  $-  $- 
                 

Assets (Liabilities) as of June 30, 2024

                

Trading securities held in a “rabbi trust”(1)

 $32,805  $32,805  $-  $- 
  $32,805  $32,805  $-  $- 

 

 

(1)

The Company has established a NQDC Plan for certain members of senior management. Deferred compensation plan assets are invested in mutual funds held in a “rabbi trust,” which is restricted for payment to participants of the NQDC Plan. Trading securities held in a rabbi trust are measured using quoted market prices at the reporting date and are included in the “Other assets” line item, with the corresponding liability included in the “Other liabilities” line item in the consolidated balance sheets. 

   
 

Note 10 – Income Taxes

 

The Company computed the interim tax provision using an estimated annual effective rate, adjusted for discrete items. This estimate is used in providing for income taxes on a year-to-date basis and may change in subsequent interim periods. The Company’s effective tax rate for the three months ended September 29, 2024 was 29.6%, compared to 24.8% in the same period of the prior year. The Company’s effective tax rate for the three months ended September 29, 2024 and October 1, 2023 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes and non-deductible executive compensation including tax deficiencies (shortfalls) from stock-based compensation, partially offset by tax credits. 

 

The Company evaluates the realizability of its deferred tax assets on a quarterly basis and establishes valuation allowances when it is more likely than not that all or a portion of a deferred tax asset may not be realized.  In completing this evaluation, the Company considers available positive and negative evidence. Such evidence includes historical operating results, the existence of cumulative earnings and losses in the most recent fiscal years, taxable income in prior carryback year(s) if permitted under the tax law, the time period over which our temporary differences will reverse, the implementation of feasible and prudent tax planning strategies, and expectations for future pre-tax operating income. Estimating future taxable income is inherently uncertain and requires judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of this evidence, it is more likely than not that all or a portion of the recorded deferred tax assets will not be realized in future periods.  As of September 29, 2024, and June 30, 2024, the Company had valuation allowances of approximately $4.9 million, primarily related to certain state and foreign net operating losses. 

 

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various foreign countries. The Company’s Fiscal years 2023, 2022 and 2021 remain subject to U.S. federal examination. Due to nonconformity with the U.S. federal statute of limitations for assessment, certain states remain open from Fiscal 2020. The Company's foreign income tax filings from fiscal 2017 are open for examination by its respective foreign tax authorities, mainly Canada and Brazil.

 

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At September 29, 2024, the Company has an unrecognized tax benefit, including accrued interest and penalties, of approximately $3.3 million (included in "Other liabilities" on our consolidated balance sheet), all of which if fully recognized would impact our effective tax rate. The Company believes that $0.4 million of unrecognized tax positions will be resolved over the next twelve months. 

 

 

 

 

 

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Note 11 – Business Segments

 

The Company’s management reviews the results of its operations by the following three business segments:

 

•

Consumer Floral & Gifts,

•

BloomNet, and

•

Gourmet Foods & Gift Baskets

 

Segment performance is measured based on contribution margin, which includes only the direct controllable revenue and operating expenses of the segments. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead (see (a) below), nor does it include depreciation and amortization, other (income) expense, net and income taxes, or stock-based compensation, which are included within corporate overhead. Assets and liabilities are reviewed at the consolidated level by management and not accounted for by segment.

 

  

Three Months Ended

 
  

September 29,

  

October 1,

 
  

2024

  

2023

 
  

(in thousands)

 

Net Revenues:

        

Segment Net Revenues:

        

Consumer Floral & Gifts

 $135,180  $142,194 

BloomNet

  23,075   28,870 

Gourmet Foods & Gift Baskets

  84,003   98,109 

Corporate

  89   270 

Intercompany eliminations

  (257)  (393)

Total net revenues

 $242,090  $269,050 
         

Operating Income (Loss):

        

Segment Contribution Margin:

        

Consumer Floral & Gifts

 $4,944  $8,826 

BloomNet

  6,841   9,387 

Gourmet Foods & Gift Baskets

  (12,253)  (11,028)

Segment Contribution Margin Subtotal

  (468)  7,185 

Corporate (a)

  (33,475)  (31,568)

Depreciation and amortization

  (13,038)  (13,194)

Operating loss

 $(46,981) $(37,577)

 

(a) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, stock-based compensation, as well as changes in the fair value of the Company's NQDC Plan. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.

 

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The following tables represent a disaggregation of revenue from contracts with customers, by channel: 

 

 

  

Three Months Ended

 
  

Consumer Floral &

          

Gourmet Foods &

  

Corporate and

         
  

Gifts

  

BloomNet

  

Gift Baskets

  

Eliminations

  

Consolidated

 
  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

 
  

(in thousands)

 

Net revenues

                                        

E-commerce

 $133,544  $140,335  $-  $-  $59,630  $69,576  $-  $-  $193,174  $209,911 

Other

  1,636   1,859   23,075   28,870   24,373   28,533   (168)  (123)  48,916   59,139 

Total net revenues

 $135,180  $142,194  $23,075  $28,870  $84,003  $98,109  $(168) $(123) $242,090  $269,050 
                                         

Other revenues detail

                                        

Retail and other

 $1,636  $1,859  $-  $-  $1,784  $1,934  $-  $-  $3,420  $3,793 

Wholesale

  -   -   10,112   11,797   22,589   26,599   -   -   32,701   38,396 

BloomNet services

  -   -   12,963   17,073   -   -   -   -   12,963   17,073 

Corporate

  -   -   -   -   -   -   89   270   89   270 

Eliminations

  -   -   -   -   -   -   (257)  (393)  (257)  (393)

Total other revenues

 $1,636  $1,859  $23,075  $28,870  $24,373  $28,533  $(168) $(123) $48,916  $59,139 

 

 

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Note 12 – Leases 

 

The Company currently leases plants, warehouses, offices, store facilities, and equipment under various leases through Fiscal 2036. Most lease agreements are of a long-term nature (over a year), although the Company does also enter into short-term leases, primarily for seasonal needs. Lease agreements may contain renewal options and rent escalation clauses and require the Company to pay real estate taxes, insurance, common area maintenance and operating expenses applicable to the leased properties. The Company accounts for its leases in accordance with ASC 842.

 

At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time, by assessing whether the Company has the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset.

 

At the lease commencement date, the Company determines if a lease should be classified as an operating or a finance lease (the Company currently has no finance leases) and recognizes a corresponding lease liability and a right-of-use asset on its Consolidated Balance Sheet. The lease liability is initially and subsequently measured as the present value of the remaining fixed minimum rental payments (including base rent and fixed common area maintenance) using discount rates as of the commencement date. Variable payments (including most utilities, real estate taxes, insurance and variable common area maintenance) are expensed as incurred. Further, the Company elected a short-term lease exception policy, permitting it to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The right-of-use asset is initially and subsequently measured at the carrying amount of the lease liability adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use asset. Right-of-use assets are assessed for impairment using the long-lived assets impairment guidance. The discount rate used to determine the present value of lease payments is the Company’s estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the Company generally cannot determine the interest rate implicit in the lease.

 

The Company recognizes expense for its operating leases on a straight-line basis over the lease term. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Renewal option periods are included in the measurement of lease liability, where the exercise is reasonably certain to occur. Key estimates and judgments in accounting for leases include how the Company determines: (1) lease payments, (2) lease term, and (3) the discount rate used in calculating the lease liability.

 

Additional information related to our leases is as follows:

 

  

Three Months Ended

 
  

September 29,

  

October 1,

 
  

2024

  

2023

 
  

(in thousands)

 

Lease costs:

        

Operating lease costs

 $6,004  $5,622 

Variable lease costs

  6,527   6,514 

Short-term lease cost

  755   883 

Sublease income

  (230)  (251)

Total lease costs

 $13,056  $12,768 
         

Cash paid for amounts included in measurement of operating lease liabilities

 $6,148  $5,638 

Right-of-use assets obtained in exchange for new operating lease liabilities

 $3,673  $91 

 

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September 29,

 
  

2024

 
    

Weighted-average remaining lease term - operating leases (in years)

  7.7 

Weighted-discount rate - operating leases

  4.4%

 

Maturities of lease liabilities in accordance with ASC 842 as of September 29, 2024 and reconciliation to the consolidated balance sheet are as follows (in thousands):

 

Fiscal Year:

    

Remainder of 2025

 $16,040 

2026

  21,676 

2027

  18,389 

2028

  17,417 

2029

  16,483 

Thereafter

  53,074 

Total Future Minimum Lease Payments

  143,079 

Less: Imputed Remaining Interest

  21,845 

Total Operating Lease Liabilities

  121,234 

Less: Current portion of long-term operating lease liabilities

  16,836 

Long-term operating lease liabilities

 $104,398 

 
 

Note 13 – Accrued Expenses

 

Accrued expenses consisted of the following:

 

   

September 29, 2024

    

June 30, 2024

  
   

(in thousands)

  

Payroll and employee benefits

   $ 24,119     $ 29,954  

Deferred revenue

     24,647       25,009  

Accrued marketing expenses

     11,199       10,709  

Accrued florist payout

     9,725       9,526  

Accrued purchases

     26,206       15,338  

Other

     33,030       30,767  

Accrued Expenses

   $ 128,926     $ 121,303  

  
 

Note 14 – Commitments and Contingencies

 

Litigation

 

There are various claims, lawsuits, and pending actions against the Company and its subsidiaries incident to the operations of its businesses. It is the opinion of management, after consultation with counsel, that the final resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

 

 

 

 

  

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

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.

 

Business Overview

 

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.

 

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. 

 

Macro-economic Conditions

 

Overall, broader macro-economic conditions continue to impact our consumers as they continue to moderate their discretionary spending. Consumers remain pressured by persistent inflation and higher interest rates. Our fiscal first quarter contains no major holiday occasions, which means that our e-commerce sales for the quarter are primarily comprised of everyday or just-because gift giving. Based on this, we expected our sales to be the most challenged during the first quarter of Fiscal 2025. In line with our expectations, total consolidated revenues in the first quarter of Fiscal 2025 decreased 10.0% to $242.1 million, compared with total consolidated revenues of $269.1 million in the same prior year period. As we look ahead to the holiday period in the current environment, we expect our sales trends to improve as our gifting business has historically proven to be more resilient during holiday periods as consumers tend to view holiday gifting periods as being somewhat less discretionary.

 

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Acquisition of Scharffen Berger

 

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.

 

Acquisition of Card Isle

 

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. 

 

Company Guidance

 

For Fiscal 2025, the Company continues to expect its revenue trend to improve as the fiscal year progresses.  The Adjusted EBITDA range reflects the acknowledgement that the consumer environment remains uncertain.

 

As a result, for Fiscal 2025 the Company continues to expect:

 

 

●

Total revenues on a percentage basis to be in a range of flat to a decrease in the low single digits, as compared with the prior year;

 

 

●

Adjusted EBITDA to be in a range of $85 million to $95 million; and

 

 

●

Free Cash Flow to be in a range of $45 million to $55 million.

 

Refer to "Definitions of non-GAAP Financial Measures" for reconciliation of non-GAAP results to applicable GAAP results.

 

Definitions of non-GAAP Financial Measures:

 

We sometimes use financial measures derived from consolidated financial information, but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).  Certain of these are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. See below for definitions and the reasons why we use these non-GAAP financial measures, and reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures.  These non-GAAP financial measures are referred to as “non-GAAP”, “adjusted” or "on a comparable basis" below, as these terms are used interchangeably. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, tax items, amortization or others that may arise during the year, and the Company's management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The lack of such reconciling information should be considered when assessing the impact of such disclosures.

 

 

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EBITDA and Adjusted EBITDA

 

We define EBITDA as net income (loss) before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of stock-based compensation, Non-Qualified Deferred Compensation Plan (“NQDC Plan”) Investment appreciation/depreciation, and certain items affecting period-to-period comparability.

 

The Company presents EBITDA and Adjusted EBITDA because it considers such information meaningful supplemental measures of its performance and believes such information is frequently used by the investment community in the evaluation of similarly situated companies. The Company uses EBITDA and Adjusted EBITDA as factors to determine the total amount of incentive compensation available to be awarded to executive officers and other employees. The Company's credit agreement uses EBITDA and Adjusted EBITDA to determine its interest rate and to measure compliance with certain covenants. EBITDA and Adjusted EBITDA are also used by the Company to evaluate and price potential acquisition candidates.

 

EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of the limitations are: (a) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, the Company's working capital needs; (b) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the Company's debts; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and EBITDA does not reflect any cash requirements for such capital expenditures. EBITDA and Adjusted EBITDA should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

 

The following table presents the EBITDA and Adjusted EBITDA for the three months ended September 29, 2024 and October 1, 2023, respectively.

 

Reconciliation of net loss to Adjusted EBITDA (non-GAAP):

  

Three Months Ended

  
   

September 29,

    

October 1,

  
   

2024

    

2023

  
   

(in thousands)

  

Net loss

   $ (34,190 )   $ (31,242 )

Add: Interest expense and other, net

     1,593       3,956  

Add: Depreciation and amortization

     13,038       13,194  

Add: Income tax benefit

     (14,384 )     (10,291 )

EBITDA

     (33,943 )     (24,383 )

Add: Stock-based compensation

     2,479       2,364  

Add: Compensation charge related to NQDC Plan investment appreciation (depreciation)

     1,738       (504 )

Add: System implementation costs

     1,780       -  

Adjusted EBITDA

   $ (27,946 )   $ (22,523 )

 

Adjusted net loss and adjusted or comparable net loss per common share

 

We define adjusted net income (loss) and adjusted or comparable net income (loss) per common share as net income (loss) and net income (loss) per common share adjusted for certain items affecting period-to-period comparability. We believe that adjusted net income (loss) and adjusted or comparable net income (loss) per common share are meaningful measures because they increase the comparability of period-to-period results. Since these are not measures of performance calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, GAAP net income (loss) and net income (loss) per common share, as indicators of operating performance and they may not be comparable to similarly titled measures employed by other companies.

 

The following table presents the adjusted net loss and adjusted net loss per common share for the three months ended September 29, 2024 and October 1, 2023, respectively.

 

 

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Reconciliation of net loss to adjusted net loss (non-GAAP):

  

Three Months Ended

  
   

September 29,

    

October 1,

  
   

2024

    

2023

  
   

(in thousands, except for share data)

  

Net loss

   $ (34,190 )   $ (31,242 )

Adjustments to reconcile net loss to adjusted net loss (non-GAAP)

                

Add: System implementation costs

     1,780       -  

Deduct: Income tax effect on adjustments

     (527 )     -  

Adjusted net loss (non-GAAP)

   $ (32,937 )   $ (31,242 )
                 

Basic and diluted net loss per common share

   $ (0.53 )   $ (0.48 )
                 

Basic and diluted adjusted net loss per common share (non-GAAP)

   $ (0.51 )   $ (0.48 )
                 
                 

Weighted average shares used in the calculation of basic and diluted net loss and adjusted net loss per common share

     64,198       64,785  

 

Segment contribution margin and adjusted segment contribution margin

 

We define segment contribution margin as earnings before interest, taxes, depreciation and amortization, before the allocation of corporate overhead expenses. Adjusted segment contribution margin is defined as contribution margin adjusted for certain items affecting period-to-period comparability. When viewed together with our GAAP results, we believe segment contribution margin and adjusted segment contribution margin provide management and users of the financial statements meaningful information about the performance of our business segments.

 

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.

 

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 months ended September 29, 2024 and October 1, 2023, respectively.

 

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Three Months Ended

  
                                         
           

System

    

As Adjusted

                  
           

Implementation

    

(non-GAAP)

             %  
   

September 29, 2024

    

Costs

    

September 29, 2024

    

October 1, 2023

    

Change

  
   

(dollars in thousands)

  

Net revenues:

                                        

Consumer Floral & Gifts

   $ 135,180     $ -     $ 135,180     $ 142,194       -4.9 %

BloomNet

     23,075       -       23,075       28,870       -20.1 %

Gourmet Foods & Gift Baskets

     84,003       -       84,003       98,109       -14.4 %

Corporate

     89       -       89       270       -67.0 %

Intercompany eliminations

     (257 )     -       (257 )     (393 )     34.6 %

Total net revenues

   $ 242,090     $ -     $ 242,090     $ 269,050       -10.0 %
                                         

Gross profit:

                                        

Consumer Floral & Gifts

   $ 53,929     $ -     $ 53,929     $ 56,322       -4.2 %
      39.9 %             39.9 %     39.6 %        
                                         

BloomNet

     11,528       -       11,528       14,498       -20.5 %
      50.0 %             50.0 %     50.2 %        
                                         

Gourmet Foods & Gift Baskets

     26,844       -       26,844       30,907       -13.1 %
      32.0 %             32.0 %     31.5 %        
                                         

Corporate

     18       -       18       201       -91.0 %
      20.2 %             20.2 %     74.4 %        
                                         

Total gross profit

   $ 92,319     $ -     $ 92,319     $ 101,928       -9.4 %
      38.1 %     -       38.1 %     37.9 %        
                                         

EBITDA (non-GAAP):

                                        

Segment Contribution Margin (non-GAAP) (a):

                                        

Consumer Floral & Gifts

   $ 4,944     $ -     $ 4,944     $ 8,826       -44.0 %

BloomNet

     6,841       -       6,841       9,387       -27.1 %

Gourmet Foods & Gift Baskets

     (12,253 )     913       (11,340 )     (11,028 )     -2.8 %

Segment Contribution Margin Subtotal

     (468 )     913       445       7,185       -93.8 %

Corporate (b)

     (33,475 )     867       (32,608 )     (31,568 )     -3.3 %

EBITDA (non-GAAP)

     (33,943 )     1,780       (32,163 )     (24,383 )     -31.9 %

Add: Stock-based compensation

     2,479       -       2,479       2,364       4.9 %

Add: Compensation charge related to NQDC Plan Investment Appreciation (Depreciation)

     1,738       -       1,738       (504 )     444.8 %

Adjusted EBITDA (non-GAAP) (c)

   $ (29,726 )   $ 1,780     $ (27,946 )   $ (22,523 )     -24.1 %

 

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(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.

 

(b) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, stock-based compensation, as well as changes in the fair value of the Company's NQDC Plan. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.

 

(c) See reconciliation of the Company's net loss to Adjusted EBITDA (non-GAAP) above.

 

Free Cash Flow

 

We define free cash flow as net cash provided by operating activities, less capital expenditures. The Company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of fixed assets, which can then be used to, among other things, invest in the Company’s business, make strategic acquisitions, strengthen the balance sheet, and repurchase stock or retire debt. Free cash flow is a liquidity measure that is frequently used by the investment community in the evaluation of similarly situated companies. Since free cash flow is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the company's cash balance for the period.

 

The following table reconciles net cash used in operating activities, a GAAP Measure, to free cash flow, a non-GAAP Measure for the three months ended September 29, 2024 and October 1, 2023, respectively.

 

 

   

Three Months Ended

  
   

September 29,

    

October 1,

  
   

2024

    

2023

  
    (in thousands)  

Net cash used in operating activities

   $ (177,241 )   $ (143,884 )

Capital expenditures

     (12,075 )     (6,974 )

Free cash flow

   $ (189,316 )   $ (150,858 )

 

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Results of Operations

 

Net revenues

 

   

Three Months Ended

  
   

September 29,

    

October 1,

     %  
   

2024

    

2023

    

Change

  
   

(dollars in thousands)

  

Net revenues:

                        

E-Commerce

   $ 193,174     $ 209,911       -8.0 %

Other

     48,916       59,139       -17.3 %

Total net revenues

   $ 242,090     $ 269,050       -10.0 %

 

Net revenues consist primarily of the selling price of the merchandise, service or outbound shipping charges, less discounts, returns and credits.

 

Net revenues decreased 10.0% during the three months ended September 29, 2024, compared to the same period of the prior year, due to lower 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. 

 

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 months ended September 29, 2024.

 

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Three Months Ended

  
   

Consumer Floral & Gifts

    

BloomNet

    

Gourmet Foods & Gift Baskets

    

Corporate and Eliminations

    

Consolidated

  
   

September 29, 2024

    

October 1, 2023

    

% Change

    

September 29, 2024

    

October 1, 2023

    

% Change

    

September 29, 2024

    

October 1, 2023

    

% Change

    

September 29, 2024

    

October 1, 2023

    

September 29, 2024

    

October 1, 2023

    

% Change

  
   

(dollars in thousands)

  

Net revenues

                                                                                                                

E-commerce

   $ 133,544     $ 140,335       -4.8 %   $ -     $ -       - %   $ 59,630     $ 69,576       -14.3 %   $ -     $ -     $ 193,174     $ 209,911       -8.0 %

Other

     1,636       1,859       -12.0 %     23,075       28,870       -20.1 %     24,373       28,533       -14.6 %     (168 )     (123 )     48,916       59,139       -17.3 %

Total net revenues

   $ 135,180     $ 142,194       -4.9 %   $ 23,075     $ 28,870       -20.1 %   $ 84,003     $ 98,109       -14.4 %   $ (168 )   $ (123 )   $ 242,090     $ 269,050       -10.0 %
                                                                                                                 

Other revenues detail

                                                                                                                

Retail and other

   $ 1,636     $ 1,859       -12.0 %   $ -     $ -       -     $ 1,784     $ 1,934       -7.8 %   $ -     $ -     $ 3,420     $ 3,793       -9.8 %

Wholesale

     -       -       -       10,112       11,797       -14.3 %     22,589       26,599       -15.1 %     -       -       32,701       38,396       -14.8 %

BloomNet services

     -       -       -       12,963       17,073       -24.1 %     -       -       -       -       -       12,963       17,073       -24.1 %

Corporate

     -       -       -       -       -       -       -       -       -       89       270       89       270       -67.0 %

Eliminations

     -       -       -       -       -       -       -       -       -       (257 )     (393 )     (257 )     (393 )     34.6 %

Total other revenues

   $ 1,636     $ 1,859       -12.0 %   $ 23,075     $ 28,870       -20.1 %   $ 24,373     $ 28,533       -14.6 %   $ (168 )   $ (123 )   $ 48,916     $ 59,139       -17.3 %

 

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Revenue by sales channel:

 

E-commerce revenues (combined online and telephonic) decreased 8.0% during the three months ended September 29, 2024, compared to the same period of the prior year, primarily due to the decline in demand across our three segments, as a result of the macro-economic conditions noted above. These external influences have negatively impacted consumer discretionary spending.

 

During the three months ended September 29, 2024, the Company fulfilled approximately 2.5 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of 6.5%, compared to a year-over-year decrease of 16.1% for the same period in the prior year. During the three months ended September 29, 2024, average order value decreased 1.5% to $78.25 compared to the same period in the prior year.  The average order value decreased as a result of product mix as the Company has introduced a wider selection of more modestly priced items to target a broader consumer base. 

 

Other revenues are comprised of the Company’s BloomNet segment, as well as the wholesale and retail channels of its Consumer Floral & Gifts and Gourmet Foods & Gift Baskets segments.

 

Other revenues during the three months ended September 29, 2024, decreased 17.3%, compared to the same period of the prior year, due to slightly lower wholesale volumes within the Gourmet Foods & Gift Baskets segment largely due to timing of shipments from the first quarter to the second quarter, as well as lower BloomNet revenues due to lower shop-to-shop volumes, as well as wholesale volumes.

 

Revenue by segment:

 

Consumer Floral & Gifts – this segment, which includes the operations of the 1-800-Flowers.com, PersonalizationMall, the 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.

 

Net revenues within this segment decreased 4.9% during the three months ended September 29, 2024, compared to the same period of the prior year, due to continued macro-economic pressure.

 

During the three months ended September 29, 2024, Consumer Floral & Gifts orders through its e-commerce sales channel (online and telephonic sales) decreased 2.8%, compared to the same period of the prior year. In addition, the average order value decreased 2.1%, as a result of product mix trending towards lower price point items.

 

BloomNet - revenues in this segment are derived from membership fees, as well as product and service offerings.

 

Net revenues decreased 20.1% during the three months ended September 29, 2024, compared to the same period of the prior year. The net revenue decline was due to soft wholesale product revenues, as well as lower services revenues, attributable to a decline in order volume processed through the network.

 

 

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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.

 

Net revenues within this segmentdecreased14.4% during the three months ended September 29, 2024, compared to the same period of the prior year, as a result of lower e-commerce revenues, primarily due to macro-economic weakness and the timing of wholesale shipments.

 

During the three months ended September 29, 2024, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 13.8%, compared to the same period of the prior year. In addition, the average order value decreased 0.5%, as a result of product mix trending towards lower price point items. 

 

Gross profit

 

   

Three Months Ended

  
   

September 29,

    

October 1,

     %  
   

2024

    

2023

    

Change

  
   

(dollars in thousands)

  
                         

Gross profit

   $ 92,319     $ 101,928       -9.4 %

Gross profit %

     38.1 %     37.9 %        

 

Gross profit consists of net revenues less cost of revenues, which is comprised primarily of florist fulfillment costs (fees paid directly to florists), the cost of floral and non-floral merchandise sold from inventory or through third parties, and associated costs, including inbound and outbound shipping charges. Additionally, cost of revenues includes labor and facility costs related to direct-to-consumer and wholesale production operations, as well as payments made to sending florists related to order volume referred through the Company’s BloomNet network. 

 

Gross profit decreased 9.4% during the three months ended September 29, 2024, compared to the same period of the prior year, due to lower revenues as noted above, partially offset by a favorable gross profit percentage.

 

Gross profit percentage increased 20 basis points during the three months ended September 29, 2024, compared to the same period of the prior year, driven by improved inventory management, production efficiencies, and lower florist fulfillment costs.

 

Gross profit by segment follows:

 

Consumer Floral & Gifts segment - Gross profit decreased by 4.2% during the three months ended September 29, 2024, compared to the same period of the prior year, due to the impact of the lower revenues noted above, partially offset by favorable gross profit percentage attributable to production efficiencies and lower florist fulfillment costs.

 

BloomNet segment - Gross profit decreased by 20.5% during the three months ended September 29, 2024, compared to the same period of the prior year, due to the decrease in revenues noted above, as well as a slight decline in gross profit percentage. Gross profit percentage decreased in comparison to the prior year due to higher cost of merchandise, delivery and shipping, and labor costs, partially offset by lower florist rebates.

 

Gourmet Foods & Gift Baskets segment – Gross profit decreased by 13.1% during the three months ended September 29, 2024, compared to the same period of the prior year, due to the decrease in revenue noted above, partially offset by improved gross profit percentage. Gross profit percentage increased 50 basis points during the three months ended September 29, 2024, compared to the same period of the prior year. The increased gross profit percentage was attributable to lower cost of merchandise, which was the result of operational efficiencies and strong inventory management.

 

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Marketing and sales expense

 

   

Three Months Ended

  
   

September 29,

    

October 1,

     %  
   

2024

    

2023

    

Change

  
   

(dollars in thousands)

  
                         

Marketing and sales

   $ 82,097     $ 82,518       -0.5 %

Percentage of net revenues

     33.9 %     30.7 %        

 

Marketing and sales expense consists primarily of advertising and promotional expenditures, catalog costs, online portal and search costs, retail store and fulfillment operations (other than costs included in cost of revenues) and customer service center expenses, as well as the operating expenses of the Company’s departments engaged in marketing, selling and merchandising activities. 

 

Marketing and sales expense decreased 0.5% during the three months ended September 29, 2024, compared to the same period of the prior year, mainly related to decreased labor costs.

 

Technology and development expense 

 

   

Three Months Ended

  
   

September 29,

    

October 1,

     %  
   

2024

    

2023

    

Change

  
   

(dollars in thousands)

  
                         

Technology and development

   $ 15,639     $ 15,304       2.2 %

Percentage of net revenues

     6.5 %     5.7 %        

 

Technology and development expense consists primarily of payroll and operating expenses of the Company’s information technology group, costs associated with its websites, including hosting, design, content development, and maintenance and support costs related to the Company’s order entry, customer service, fulfillment, and database systems.

 

Technology and development expense increased by 2.2% during the three months ended September 29, 2024, compared to the same period of the prior year, primarily due to higher maintenance and support costs for the Company's technology platform enhancements, including duplicate costs relating to the implementation of a new customer service platform, partially offset by lower labor and consulting costs.

 

General and administrative expense

 

   

Three Months Ended

  
   

September 29,

    

October 1,

     %  
   

2024

    

2023

    

Change

  
   

(dollars in thousands)

  
                         

General and administrative

   $ 28,526     $ 28,489       0.1 %

Percentage of net revenues

     11.8 %     10.6 %        

 

General and administrative expense consists of payroll and other expenses in support of the Company’s executive, finance and accounting, legal, human resources and other administrative functions, as well as professional fees and other general corporate expenses.

 

General and administrative expenses were essentially flat during the three months ended September 29, 2024, compared to the same period of the prior year, primarily due to increases in labor costs driven by changes in the value of the Company’s NQDC Plan investments (offset in Other (income) expense below), partially offset by lower bad debt expense and discretionary spending.

 

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Depreciation and amortization expense

 

   

Three Months Ended

  
   

September 29,

    

October 1,

     %  
   

2024

    

2023

    

Change

  
   

(dollars in thousands)

  
                         

Depreciation and amortization

   $ 13,038     $ 13,194       -1.2 %

Percentage of net revenues

     5.4 %     4.9 %        

 

Depreciation and amortization expense was essentially in-line with the prior year, during the three months ended September 29, 2024.

 

Interest expense, net

 

   

Three Months Ended

  
   

September 29,

    

October 1,

     %  
   

2024

    

2023

    

Change

  
   

(dollars in thousands)

  
                         

Interest expense, net

   $ 3,360     $ 3,482       -3.5 %

 

Interest expense, net consists primarily of interest expense and amortization of deferred financing costs attributable to the Company’s credit facility (See Note 7 - Debt, Net in Item 1 for details), net of income earned on the Company’s available cash balances.

 

Interest expense was relatively in-line with the prior year, during the three months ended September 29, 2024.

 

Other (income) expense, net

 

   

Three Months Ended

  
   

September 29,

    

October 1,

     %  
   

2024

    

2023

    

Change

  
   

(dollars in thousands)

  
                         

Other (income) expense, net

   $ (1,767 )   $ 474       472.8 %

 

Other (income) expense 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 line item).

 

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Income Taxes

 

The Company recorded an income tax benefit of $14.4 million and $10.3 million, during the three months ended September 29, 2024 and October 1, 2023, respectively. The Company’s effective tax rate for the three months ended September 29, 2024 was 29.6%, compared to 24.8% in the same period of the prior year. The Company’s effective tax rate for the three months ended September 29, 2024 and October 1, 2023 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes and non-deductible executive compensation including tax deficiencies (shortfalls) from stock-based compensation, partially offset by tax credits. 

 

Liquidity and Capital Resources

 

Liquidity and borrowings

 

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 7 - Debt, Net in Item 1 for details). At September 29, 2024, the Company had working capital of $118.7 million, including cash and cash equivalents of $8.4 million, compared to working capital of $157.9 million, including cash and cash equivalents of $159.4 million, at June 30, 2024. 

 

Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s second fiscal quarter, is expected to generate over 40% of the Company’s annual revenues, and all of its earnings. Due to the number of major floral gifting occasions, including Mother’s Day, Valentine’s Day, Easter, and Administrative Professionals Week, revenues also have historically risen during the Company’s fiscal third and fourth quarters in comparison to its fiscal first quarter.

 

As of September 29, 2024, the Company had $45.0 million outstanding under its revolving credit agreement in order to fund pre-holiday manufacturing and inventory procurement requirements. Working capital borrowings typically peak in November after which time cash generated from operations during the Christmas holiday shopping season is expected to enable the Company to repay such borrowings.

 

While we believe that our sources of funding will be sufficient to meet our anticipated operating cash needs for at least the next twelve months, any projections of future cash needs and cash flows are subject to substantial uncertainty. We continually evaluate, and will, from time to time, consider the acquisition of, or investment in, complementary businesses, products, services, capital infrastructure, and technologies, which might affect our liquidity requirements or cause us to require additional financing.

 

Cash Flows

 

Net cash used in operating activities of $177.2 million, for the three months ended September 29, 2024, was primarily attributable to the Company’s net loss 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 inventory, trade receivables, and prepaid and other current assets.

 

Net cash used in investing activities of $15.1 million, for the three months ended September 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.

 

Net cash provided by financing activities of $41.3 million, for the three months ended September 29, 2024, related primarily to net proceeds from bank borrowings under the Company’s working capital line of credit.

 

Free Cash Flow

 

Free cash flow was negative $189.3 million for the three months ended September 29, 2024, compared with free cash flow of negative $150.8 million for three months ended October 1, 2023, a decrease of $38.5 million primarily driven by a decrease in cash flows from operations to fund the build in inventory for the holiday season. Refer to "Definitions of non-GAAP Financial Measures" for reconciliation of non-GAAP results to applicable GAAP results.

 

 

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Stock Repurchase Program

 

See Item 2 in Part II below for details.

 

Contractual Obligations

 

At September 29, 2024, the Company’s contractual obligations consist of:

 

●

Long-term debt obligations - payments due under the Company's credit agreement (see Note 7 - Debt, Net in Item 1 for details and payments due by period).

●

Operating lease obligations – payments due under the Company’s operating leases (see Note 12 - Leases in Item 1 for details and payments due by period for the long-term operating leases).

●

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.

 

   

Payments due by period

  
   

(in thousands)

  
   

Remaining

                                                  
   

Fiscal

    

Fiscal

    

Fiscal

    

Fiscal

    

Fiscal

                  
   

2025

    

2026

    

2027

    

2028

    

2029

    

Thereafter

    

Total

  

Purchase commitments

   $ 93,077     $ 11,223     $ 5,093     $ 3,447     $ 3,447     $ -     $ 116,287  

 

Critical Accounting Estimates

 

As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, the discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances, and management evaluates its estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. The Company’s most critical accounting policies relate to goodwill, other intangible assets and income taxes. There have been no significant changes to the assumptions and estimates related to the Company’s critical accounting policies since June 30, 2024.

 

Recently Issued Accounting Pronouncements 

 

See Note 1 - Accounting Policies in Item 1 for details regarding the impact of accounting standards that were recently issued on our consolidated financial statements.

 

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Forward Looking Information and Factors that May Affect Future Results

 

Our disclosure and analysis in this report contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company’s current expectations or beliefs concerning future events and can generally be identified by the use of statements that include words such as “estimate,” “expects,” “project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,” “forecast,” “likely,” “will,” "should," “goal,” “target” or similar words or phrases. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements, including:

 

●

the Company’s ability:

 

 

o

to achieve revenue and profitability;
 

o

to leverage its operating platform and reduce operating expenses;
 

o

to manage the seasonality of its business;
 

o

to cost effectively acquire and retain customers;
 

o 

to successfully integrate acquired businesses and assets;
 

o 

to reduce working capital requirements and capital expenditures;
 

o 

to mitigate the impact of supply chain cost and capacity constraints;
 

o

to compete against existing and new competitors;
 

o

to manage expenses associated with sales and marketing and necessary general and administrative and technology investments;
 

o 

to address the effects of changes in accounting policies, practices, or assumptions, including changes that could potentially require future impairment charges;
  o  to achieve its guidance for the full Fiscal year;
  o  to successfully execute its strategic initiatives; and
  o  to reduce promotional activities and achieve more efficient marketing programs.

 

●

the outcome of contingencies, including legal proceedings in the normal course of business; and

●

general consumer sentiment and economic conditions that may affect, among other things, the levels of discretionary customer purchases of the Company’s products and the costs of shipping and labor.

 

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties, and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated, or projected. Investors should bear this in mind as they consider forward-looking statements.

 

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 Forms 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission. Our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 listed various important factors that could cause actual results to differ materially from expected and historic results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. Readers can find them in Part I, Item 1A, of that filing under the heading “Cautionary Statements Under the Private Securities Litigation Reform Act of 1995”. We incorporate that section of that Form 10-K in this filing and investors should refer to it. In addition, please refer to any additional risk factors in Part II, Item 1A in this Form 10-Q.

 

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

The Company is exposed to market risk from the effect of interest rate changes.

 

Interest Rate Risk

 

The Company’s exposure to market risk for changes in interest rates relates primarily to the Company’s investment of available cash balances and its long-term debt. The Company generally invests its cash and cash equivalents in investment grade corporate and U.S. government securities. Borrowings under the Company’s credit facility bear interest at a variable rate, plus an applicable margin, and therefore expose the Company to market risk for changes in interest rates. The effect of a 50 basis point increase in current interest rates on the Company’s interest expense would be approximately $0.2 million during the three months ended September 29, 2024.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures 

 

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of September 29, 2024. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have each concluded that the Company’s disclosure controls and procedures were effective as of September 29, 2024.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting identified in connection with the Company’s evaluation required by Rules 13a-15(d) or 15d-15(d) of the Securities Exchange Act of 1934 during the quarter ended September 29, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

 

Limitations on Effectiveness of Controls and Procedures

 

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, as specified above. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.

 

31
Table of Contents
 

 

PART II. – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Litigation

 

There are various claims, lawsuits, and pending actions against the Company and its subsidiaries incident to the operations of its businesses. It is the opinion of management, after consultation with counsel, that the final resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity. 

 

ITEM 1A. RISK FACTORS

 

There were no material changes to the Company’s risk factors as discussed in Part 1, Item 1A-Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

 

32
Table of Contents

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

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, subject to general market conditions. The repurchase program is financed utilizing available cash. On April 22, 2021, the Company’s Board of Directors authorized an increase to its stock repurchase plan of up to $40.0 million. In addition, on February 3, 2022, the Company’s Board of Directors authorized an increase to its stock repurchase plan of up to $40.0 million. As of September 29, 2024, $20.3 million remained authorized under the plan.

 

The following table sets forth, for the months indicated, the Company’s purchase of common stock during the first three months of Fiscal 2025, which includes the period July 1, 2024 through September 29, 2024:

 

                   

Total

    

Dollar

  
                   

Number of

    

Value of

  
                   

Shares

    

Shares

  
                   

Purchased

    

that May

  
                   

as Part of

    

Yet Be

  
   

Total

    

Average

    

Publicly

    

Purchased

  
   

Number of

    

Price

    

Announced

    

Under the

  
   

Shares

    

Paid Per

    

Plans or

    

Plans or

  

Period

  

Purchased

    

Share (1)

    

Programs

    

Programs

  
   

(in thousands, except shares and average price paid per share)

          
                                 

07/01/24 – 07/28/24

     -     $ -       -     $ 21,571  

07/29/24 – 08/25/24

     -     $ -       -     $ 21,571  

08/26/24 – 09/29/24

     160,413     $ 7.79       160,413     $ 20,316  

Total

     160,413     $ 7.79       160,413          

 

(1)

Average price per share excludes commissions and other transaction fees.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable. 

 

 

ITEM 5. OTHER INFORMATION

 

Rule 10b5-1 Plans

 

During the three months ended September 29, 2024, none of the directors or executive officers adopted or terminated a "Rule 10b5- 1 trading arrangement" or a "non-rule 10b5- 1 trading arrangement", as defined in Item 408 of Regulation S-K.
 

 

 

33
Table of Contents

     

 

ITEM 6. EXHIBITS

 

31.1

Certification of the principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

31.2

Certification of the principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Document

101.PRE

Inline XBRL Taxonomy Definition Presentation Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

* Filed herewith.

 

 

34
Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

1-800-FLOWERS.COM, Inc. 

(Registrant)
 

Date: November 1, 2024

/s/ James F. McCann      

James F. McCann
Executive Chairman and Chief Executive Officer
(Principal Executive Officer)  
   

Date: November 1, 2024

/s/ William E. Shea      
William E. Shea
Senior Vice President, Treasurer and
Chief Financial Officer (Principal
Financial and Accounting Officer)

 

35

Exhibit 31.1

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(RULE 13a-14(a))

 

 

I, James F. McCann, certify that:

 

 

(1)

I have reviewed this quarterly report on Form 10-Q of 1-800-FLOWERS.COM, Inc.;

 

 

(2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

(3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

(4)

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

 

(5)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: November 1, 2024

/s/ James F. McCann
 

James F. McCann
 

Executive Chairman and Chief Executive Officer
   

 

 

 

Exhibit 31.2

 

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(RULE 13a-14(a))

 

 

I, William E. Shea, certify that:

 

 

(1)

I have reviewed this quarterly report on Form 10-Q of 1-800-FLOWERS.COM, Inc.;

 

 

(2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

(3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

(4)

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

 

(5)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: November 1, 2024

/s/ William E. Shea
 

William E. Shea
 

Senior Vice President, Treasurer and
 

Chief Financial Officer

 

 

 

Exhibit 32.1

 

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of 1-800-FLOWERS.COM, Inc. (the “Company”) hereby certifies, to the best of such officer's knowledge, that:

 

(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended September 29, 2024, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

 

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Dated: November 1, 2024

/s/ James F. McCann
 

James F. McCann

Executive Chairman and Chief Executive Officer
   

Dated: November 1, 2024

/s/ William E. Shea
 

William E. Shea

Senior Vice President, Treasurer

and Chief Financial Officer

 

These certifications are furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certifications will not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates them by reference.

 

 

 
v3.24.3
Document And Entity Information - shares
 3 Months Ended
Sep. 29, 2024
Oct. 28, 2024
Document Information [Line Items]    
Entity Central Index Key 0001084869  
Entity Registrant Name 1 800 FLOWERS COM INC  
Amendment Flag false  
Current Fiscal Year End Date --06-29  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2025  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 29, 2024  
Document Transition Report false  
Entity File Number 0-26841  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 11-3117311  
Entity Address, Address Line One Two Jericho Plaza, Suite 200  
Entity Address, City or Town Jericho  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 11753  
City Area Code 516  
Local Phone Number 237-6000  
Title of 12(b) Security Class A common stock  
Trading Symbol FLWS  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Common Class B [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   27,068,221
Common Class A [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   36,782,727
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Sep. 29, 2024
Jun. 30, 2024
Current assets:    
Cash and cash equivalents $ 8,407 $ 159,437
Trade receivables, net 41,024 18,024
Inventories 275,323 176,591
Prepaid and other 60,960 31,680
Total current assets 385,714 385,732
Property, plant and equipment, net 225,239 223,789
Operating lease right-of-use assets 112,926 113,926
Goodwill 156,648 156,537
Total identifiable intangible assets, net 115,531 116,216
Other assets 38,566 36,448
Total assets 1,034,624 1,032,648
Current liabilities:    
Accounts payable 63,732 80,005
Accrued expenses 128,926 121,303
Current maturities of long-term debt 57,500 10,000
Current portion of long-term operating lease liabilities 16,836 16,511
Total current liabilities 266,994 227,819
Long-term debt, net 172,293 177,113
Long-term operating lease liabilities 104,398 105,866
Deferred tax liabilities, net 18,794 19,402
Other liabilities 38,728 36,106
Total liabilities 601,207 566,306
Commitments and contingencies (See Note 14)
Stockholders' equity:    
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued 0 0
Additional paid-in capital 401,685 399,165
Retained earnings 230,788 264,978
Accumulated other comprehensive loss (127) (127)
Treasury stock, at cost, 21,805,703 and 21,645,290 Class A shares at September 29, 2024 and June 30, 2024, respectively and 5,280,000 Class B shares at September 29, 2024 and June 30, 2024 (199,840) (198,585)
Total stockholders’ equity 433,417 466,342
Total liabilities and stockholders’ equity 1,034,624 1,032,648
Common Class A [Member]    
Stockholders' equity:    
Common stock 588 588
Common Class B [Member]    
Stockholders' equity:    
Common stock $ 323 $ 323
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Sep. 29, 2024
Jun. 30, 2024
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, authorized (in shares) 10,000,000 10,000,000
Preferred stock, issued (in shares) 0 0
Common Class A [Member]    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, authorized (in shares) 200,000,000 200,000,000
Common stock, issued (in shares) 58,798,430 58,792,695
Treasury stock, shares (in shares) 21,805,703 21,645,290
Common Class B [Member]    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, authorized (in shares) 200,000,000 200,000,000
Common stock, issued (in shares) 32,348,221 32,348,221
Treasury stock, shares (in shares) 5,280,000 5,280,000
v3.24.3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Net revenues $ 242,090 $ 269,050
Cost of revenues (excludes depreciation and amortization) 149,771 167,122
Gross profit 92,319 101,928
Operating expenses:    
Marketing and sales 82,097 82,518
Technology and development 15,639 15,304
General and administrative 28,526 28,489
Depreciation and amortization 13,038 13,194
Total operating expenses 139,300 139,505
Operating loss (46,981) (37,577)
Interest expense, net 3,360 3,482
Other (income) expense, net (1,767) 474
Loss before income taxes (48,574) (41,533)
Income tax benefit (14,384) (10,291)
Net loss and comprehensive loss $ (34,190) $ (31,242)
Basic and diluted net loss per common share (in dollars per share) $ (0.53) $ (0.48)
Basic and diluted weighted average shares used in the calculation of net loss per common share (in shares) 64,198 64,785
v3.24.3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock Outstanding [Member]
Common Class A [Member]
Common Stock Outstanding [Member]
Common Class B [Member]
Common Stock [Member]
Common Class A [Member]
Common Stock [Member]
Common Class B [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Treasury Stock, Common [Member]
Total
Balance (in shares) at Jul. 02, 2023 58,273,747 32,348,221           25,845,875  
Balance at Jul. 02, 2023     $ 583 $ 323 $ 388,215 $ 271,083 $ (170) $ (188,191) $ 471,843
Net loss     0 0 0 (31,242) 0 $ 0 (31,242)
Stock-based compensation (in shares) 35,800 0           0  
Stock-based compensation     0 0 2,364 0 0 $ 0 2,364
Acquisition of Class A treasury stock     0 0 0 0 0 $ (74) (74)
Acquisition of Class A treasury stock (in shares)               10,483  
Balance (in shares) at Oct. 01, 2023 58,309,547 32,348,221           25,856,358  
Balance at Oct. 01, 2023     583 323 390,579 239,841 (170) $ (188,265) 442,891
Balance (in shares) at Jun. 30, 2024 58,792,695 32,348,221           26,925,290  
Balance at Jun. 30, 2024     588 323 399,165 264,978 (127) $ (198,585) 466,342
Net loss     0 0 0 (34,190) 0 $ 0 (34,190)
Stock-based compensation (in shares) 1,000 0           0  
Stock-based compensation     0 0 2,479 0 0 $ 0 2,479
Exercise of stock options (in shares) 4,735 0           0  
Exercise of stock options     0 0 41 0 0 $ 0 41
Acquisition of Class A treasury stock     0 0 0 0 0 $ (1,255) (1,255)
Acquisition of Class A treasury stock (in shares)               160,413  
Balance (in shares) at Sep. 29, 2024 58,798,430 32,348,221           27,085,703  
Balance at Sep. 29, 2024     $ 588 $ 323 $ 401,685 $ 230,788 $ (127) $ (199,840) $ 433,417
v3.24.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Operating activities:    
Net loss $ (34,190) $ (31,242)
Reconciliation of net loss to net cash used in operating activities, net of acquisitions:    
Depreciation and amortization 13,038 13,194
Amortization of deferred financing costs 180 180
Deferred income taxes (607) (579)
Bad debt expense 84 586
Stock-based compensation 2,479 2,364
Other non-cash items 255 270
Changes in operating items:    
Trade receivables (23,025) (24,407)
Inventories (97,439) (89,287)
Prepaid and other (29,237) (14,764)
Accounts payable and accrued expenses (8,806) (42)
Other assets and liabilities 27 (157)
Net cash used in operating activities (177,241) (143,884)
Investing activities:    
Acquisitions, net of cash acquired (3,000) 0
Capital expenditures (12,075) (6,974)
Net cash used in investing activities (15,075) (6,974)
Financing activities:    
Acquisition of treasury stock (1,255) (74)
Proceeds from exercise of employee stock options 41 0
Proceeds from bank borrowings 45,000 35,000
Repayment of bank borrowings (2,500) (2,500)
Net cash provided by financing activities 41,286 32,426
Net change in cash and cash equivalents (151,030) (118,432)
Cash and cash equivalents:    
Beginning of period 159,437 126,807
End of period $ 8,407 $ 8,375
v3.24.3
Note 1 - Accounting Policies
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

Note 1 – Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by 1-800-FLOWERS.COM, Inc. and Subsidiaries (the “Company”) in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 29, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending June 29, 2025. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which provides a more complete understanding of our accounting policies, financial position, operating results and other matters.

 

The Company’s quarterly results may experience seasonal fluctuations. Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s second fiscal quarter, is expected to generate over 40% of the Company’s annual revenues, and all of its earnings. Due to the number of major floral gifting occasions, including Mother's Day, Valentine’s Day, Easter, and Administrative Professionals Week, revenues also have historically risen during the Company’s fiscal third and fourth quarters in comparison to its fiscal first quarter.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

Revenue Recognition

 

Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Service and outbound shipping charged to customers are recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers.

 

A description of our principal revenue generating activities is as follows:

 

●

E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due prior to the date of shipment.

●

Retail revenues - consumer products sold through our retail stores. Revenue is recognized when control of the goods is transferred to the customer, at the point of sale, at which time payment is received.

●

Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer.

●

BloomNet Services - membership fees as well as other service offerings to florists. Membership and other subscription-based fees are recognized monthly as earned. Services revenues related to orders sent through the floral network are variable, based on either the number of orders or the value of orders, and are recognized in the period in which the orders are delivered. The contracts within BloomNet Services are typically month-to-month and, as a result no consideration allocation is necessary across multiple reporting periods. Payment is typically due less than 30 days from the date the services were performed. 

 

Deferred Revenues

 

Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. As such, customer orders are recorded as deferred revenue prior to shipment or rendering of product or services. Deferred revenues primarily relate to e-commerce orders placed, but not shipped, prior to the end of the fiscal period, as well as for subscription programs, including our various food, wine, and plant-of-the-month clubs and our Celebrations Passport® program.

 

Our total deferred revenue as of  June 30, 2024 was $25.0 million (included in “Accrued expenses” on our consolidated balance sheets), of which $13.0 million was recognized as revenue during the three months ended September 29, 2024. The deferred revenue balance as of  September 29, 2024 was $24.6 million.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires enhanced disclosures about significant segment expenses, includes enhanced interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements and related disclosures.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires the disclosure of additional information with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes and requires greater detail about significant reconciling items in the reconciliation. Additionally, the amendment requires disaggregated information pertaining to taxes paid, net of refunds received, for federal, state, and foreign income taxes. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and allows for either a prospective or retrospective approach on adoption. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.
v3.24.3
Note 2 - Net Income (Loss) Per Common Share
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

Note 2 – Net Income (Loss) Per Common Share

 

Basic net loss per common share is computed by dividing the net loss during the period by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed using the weighted average number of common shares outstanding during the period and excludes the dilutive potential common shares (consisting of unvested restricted stock awards), as their inclusion would be antidilutive.  As a result of the net loss for the three months ended September 29, 2024 and October 1, 2023, there is no dilutive impact to the net loss per share calculation for the respective periods.   
v3.24.3
Note 3 - Acquisitions
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Mergers, Acquisitions and Dispositions Disclosures [Text Block]

Note 3 – Acquisitions

 

Acquisition of Scharffen Berger

 

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 hand to fund the purchase.

 

The total consideration of $3.3 million was primarily allocated to the identifiable assets acquired and liabilities assumed based on the preliminary estimates of their fair values on the acquisition date, including: property, plant and equipment of $2.0 million, inventory of $1.3 million and goodwill of $0.1 million (deductible for income tax purposes), offset by net liabilities of $0.1 million.  The Company is in the process of finalizing its allocation and this may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain additional intangible assets, revision of useful lives of intangible assets, and the determination of any residual amount that will be allocated to goodwill.

 

Scharffen Berger annual revenues and results of operations, based on its most recent available financial information, is deemed immaterial to the Company's consolidated financial statements, and, as such pro forma results of operations have not been presented.

 

Acquisition of Card Isle

 

On April 3, 2024, the Company, within its BloomNet segment, 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 hand to fund the purchase.

 

The total consideration of $3.6 million was primarily allocated to the identifiable assets acquired and liabilities assumed based on the preliminary estimates of their fair values on the acquisition date, including: goodwill of $3.0 million (deductible for income tax purposes) and artist contracts of $0.6 million (5-year life).  The Company is in the process of finalizing its allocation and this may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain additional intangible assets, revisions of useful lives of intangible assets, and the determination of any residual amount that will be allocated to goodwill.

 

Card Isle annual revenues and results of operations, based on its most recently available financial information, is deemed immaterial to the Company's consolidated financial statements, and, as such pro forma results of operations have not been presented.
v3.24.3
Note 4 - Inventory
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Inventory Disclosure [Text Block]

Note 4 – Inventory

 

The Company’s inventory, valued at the lower of cost or net realizable value, includes purchased and manufactured finished goods for sale, packaging supplies, crops, raw material ingredients for manufactured products and associated manufacturing labor, and is classified as follows:

 

  

September 29, 2024

  

June 30, 2024

 
  

(in thousands)

 

Finished goods

 $170,479  $94,590 

Work-in-process

  26,526   25,849 

Raw materials

  78,318   56,152 

Total inventory

 $275,323  $176,591 

 
v3.24.3
Note 5 - Goodwill and Intangible Assets, Net
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]

Note 5 – Goodwill and Intangible Assets, Net

 

The following table presents goodwill by segment and the related change in the net carrying amount:

 

          

Gourmet

     
  

Consumer

      

Foods &

     
  

Floral &

      

Gift

     
  

Gifts

  

BloomNet

  

Baskets

  

Total

 
  

(in thousands)

 

Balance at June 30, 2024

 $153,577  $2,960  $-  $156,537 

Acquisition of Scharffen Berger

  -   -   111   111 

Balance at September 29, 2024

 $153,577  $2,960  $111  $156,648 

 

The Company’s other intangible assets consist of the following:

 

     

September 29, 2024

  

June 30, 2024

 
     

Gross

          

Gross

         
  

Amortization

  

Carrying

  

Accumulated

      

Carrying

  

Accumulated

     
  

Period

  

Amount

  

Amortization

  

Net

  

Amount

  

Amortization

  

Net

 
  

(in years)

  

(in thousands)

 

Intangible assets with determinable lives

                           

Investment in licenses

 14 - 16  $7,420  $6,701  $719  $7,420  $6,674  $746 

Customer lists

 3 - 10   29,647   26,576   3,071   29,647   25,932   3,715 

Other

 5 - 14   2,946   2,678   268   2,946   2,664   282 

Total intangible assets with determinable lives

     40,013   35,955   4,058   40,013   35,270   4,743 

Trademarks with indefinite lives

     111,473   -   111,473   111,473   -   111,473 

Total identifiable intangible assets

    $151,486  $35,955  $115,531  $151,486  $35,270  $116,216 

 

Future estimated amortization expense is as follows: remainder of Fiscal 2025 - $1.4 million, Fiscal 2026 - $1.4 million, Fiscal 2027 - $0.6 million, Fiscal 2028 - $0.3 million, Fiscal 2029 - $0.2 million and thereafter - $0.1 million.
v3.24.3
Note 6 - Investments
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Equity Method Investments and Joint Ventures Disclosure [Text Block]

Note 6 – Investments

 

Equity investments without a readily determinable fair value

 

Investments in non-marketable equity instruments of private companies, where the Company does not possess the ability to exercise significant influence, are accounted for at cost, less impairment (assessed qualitatively at each reporting period), adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. These investments are included within “Other assets” in the Company’s consolidated balance sheets. The aggregate carrying amount of the Company’s cost method investments was $2.4 million as of  September 29, 2024 and June 30, 2024, respectively. 

 

Equity investments with a readily determinable fair value

 

The Company also holds certain trading securities associated with its Non-Qualified Deferred Compensation Plan (“NQDC Plan”). These investments are measured using quoted market prices at the reporting date and are included within the “Other assets” line item in the consolidated balance sheets (see Note 9 - Fair Value Measurements). 

   
v3.24.3
Note 7 - Debt, Net
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 7 – Debt, Net

 

The Company’s current and long-term debt consists of the following:

 

  

September 29, 2024

  

June 30, 2024

 
  

(in thousands)

 

Revolver

 $45,000  $- 

Term Loans

  187,500   190,000 

Deferred financing costs

  (2,707)  (2,887)

Total debt

  229,793   187,113 

Less: current maturities of long-term debt

  57,500   10,000 

Long-term debt, net

 $172,293  $177,113 

 

On June 27, 2023, the Company, certain of its U.S. subsidiaries, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent entered into a Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”). The Third Amended Credit Agreement amended and restated the Company’s Second Amended and Restated Credit Agreement, dated as of May 31, 2019 (as amended by the First Amendment, dated as of August 20, 2020, the Second Amendment, dated as of November 8, 2021, and the Third Amendment, dated as of August 29, 2022). The Third Amended Credit Agreement, among other modifications: (i) increased the amount of the outstanding term loan (“Term Loan”) to $200 million, (ii) decreased the amount of the commitments in respect of the revolving credit facility to $225 million, subject to a seasonal reduction to an aggregate amount of $125 million for the period from January 1 to August 1, (iii) extended the maturity date of the outstanding term loan and the revolving credit facilities to June 27, 2028, and (iv) increased the applicable interest rate margins for SOFR and base rate loans by 25 basis points.

 

For each borrowing under the Third Amended Credit Agreement, the Company may elect that such borrowing bear interest at an annual rate equal to either: (1) a base rate plus an applicable margin varying based on the Company’s consolidated leverage ratio, where the base rate is the highest of (a) the prime rate, (b) the New York fed bank rate plus 0.5%, and (c) an adjusted SOFR rate for a one month interest period plus 1% or (2) an adjusted SOFR for rate plus an applicable margin varying based on the Company’s consolidated leverage ratio. The adjusted SOFR rate includes a credit spread adjustment of 0.1% for all interest periods.

 

The Third Amended Credit Agreement requires that while any borrowings or commitments are outstanding the Company comply with certain financial covenants and affirmative covenants as well as certain negative covenants that, subject to certain exceptions, limit the Company’s ability to, among other things, incur additional indebtedness, make certain investments and make certain restricted payments. The Company was in compliance with these covenants as of September 29, 2024. The Third Amended Credit Agreement is secured by substantially all of the assets of the Company.

 

The principal of the Term Loan is payable at a rate of $2.5 million for the first 8 quarterly installments beginning on September 29, 2023, increasing to a quarterly payment of $5.0 million, commencing on September 26, 2025, for the remaining 11 payments, with the remaining balance of $125.0 million due upon maturity on June 27, 2028.

 

Future principal term loan payments under the Third Amended Credit Agreement are as follows: $7.5 million – remainder of Fiscal 2025, $20.0 million – Fiscal 2026, $20.0 million – Fiscal 2027, and $140.0 million – Fiscal 2028.

   
v3.24.3
Note 8 - Property, Plant and Equipment, Net
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Property, Plant and Equipment Disclosure [Text Block]

Note 8 – Property, Plant and Equipment, Net

 

The Company’s property, plant and equipment, net consists of the following:

 

   

September 29, 2024

    

June 30, 2024

  
   

(in thousands)

  

Land

   $ 33,827     $ 33,827  

Orchards in production and land improvements

     20,917       20,604  

Building and building improvements

     69,410       69,089  

Leasehold improvements

     31,257       31,289  

Production equipment

     134,806       131,664  

Furniture and fixtures

     9,330       9,325  

Computer and telecommunication equipment

     42,820       42,159  

Software

     196,207       176,160  

Capital projects in progress

     12,777       23,172  

Property, plant and equipment, gross

     551,351       537,289  

Accumulated depreciation and amortization

     (326,112 )     (313,500 )

Property, plant and equipment, net

   $ 225,239     $ 223,789  

 
v3.24.3
Note 9 - Fair Value Measurements
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

Note 9 – Fair Value Measurements

 

Cash and cash equivalents, trade and other receivables, prepaids, accounts payable and accrued expenses are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Although no trading market exists, the Company believes that the carrying amount of its debt approximates fair value due to its variable nature (these are level 2 investments). The Company’s investments in non-marketable equity instruments of private companies are carried at cost and are periodically assessed for other-than-temporary impairment when an event or circumstances indicate that an other-than-temporary decline in value may have occurred. The Company’s remaining financial assets and liabilities are measured and recorded at fair value (see table below). The Company’s non-financial assets, such as definite lived intangible assets and property, plant and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Goodwill and indefinite lived intangibles are tested for impairment annually, or more frequently, if events occur or circumstances change such that it is more likely than not that an impairment may exist, as required under the accounting standards.

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the guidance are described below:

 

Level 1

Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2

Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3

Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

 

The following table presents by level, within the fair value hierarchy, financial assets and liabilities measured at fair value on a recurring basis:

 

  

Carrying

  

Fair Value Measurements

 
  

Value

  

Assets (Liabilities)

 
      

Level 1

  

Level 2

  

Level 3

 
  

(in thousands)

 

Assets (Liabilities) as of September 29, 2024

                

Trading securities held in a “rabbi trust” (1)

 $35,425  $35,425  $-  $- 
  $35,425  $35,425  $-  $- 
                 

Assets (Liabilities) as of June 30, 2024

                

Trading securities held in a “rabbi trust”(1)

 $32,805  $32,805  $-  $- 
  $32,805  $32,805  $-  $- 

 

 

(1)

The Company has established a NQDC Plan for certain members of senior management. Deferred compensation plan assets are invested in mutual funds held in a “rabbi trust,” which is restricted for payment to participants of the NQDC Plan. Trading securities held in a rabbi trust are measured using quoted market prices at the reporting date and are included in the “Other assets” line item, with the corresponding liability included in the “Other liabilities” line item in the consolidated balance sheets. 

   
v3.24.3
Note 10 - Income Taxes
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 10 – Income Taxes

 

The Company computed the interim tax provision using an estimated annual effective rate, adjusted for discrete items. This estimate is used in providing for income taxes on a year-to-date basis and may change in subsequent interim periods. The Company’s effective tax rate for the three months ended September 29, 2024 was 29.6%, compared to 24.8% in the same period of the prior year. The Company’s effective tax rate for the three months ended September 29, 2024 and October 1, 2023 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes and non-deductible executive compensation including tax deficiencies (shortfalls) from stock-based compensation, partially offset by tax credits. 

 

The Company evaluates the realizability of its deferred tax assets on a quarterly basis and establishes valuation allowances when it is more likely than not that all or a portion of a deferred tax asset may not be realized.  In completing this evaluation, the Company considers available positive and negative evidence. Such evidence includes historical operating results, the existence of cumulative earnings and losses in the most recent fiscal years, taxable income in prior carryback year(s) if permitted under the tax law, the time period over which our temporary differences will reverse, the implementation of feasible and prudent tax planning strategies, and expectations for future pre-tax operating income. Estimating future taxable income is inherently uncertain and requires judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of this evidence, it is more likely than not that all or a portion of the recorded deferred tax assets will not be realized in future periods.  As of September 29, 2024, and June 30, 2024, the Company had valuation allowances of approximately $4.9 million, primarily related to certain state and foreign net operating losses. 

 

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various foreign countries. The Company’s Fiscal years 2023, 2022 and 2021 remain subject to U.S. federal examination. Due to nonconformity with the U.S. federal statute of limitations for assessment, certain states remain open from Fiscal 2020. The Company's foreign income tax filings from fiscal 2017 are open for examination by its respective foreign tax authorities, mainly Canada and Brazil.

 

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At September 29, 2024, the Company has an unrecognized tax benefit, including accrued interest and penalties, of approximately $3.3 million (included in "Other liabilities" on our consolidated balance sheet), all of which if fully recognized would impact our effective tax rate. The Company believes that $0.4 million of unrecognized tax positions will be resolved over the next twelve months. 

 

 

 

 

 
v3.24.3
Note 11 - Business Segments
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

Note 11 – Business Segments

 

The Company’s management reviews the results of its operations by the following three business segments:

 

•

Consumer Floral & Gifts,

•

BloomNet, and

•

Gourmet Foods & Gift Baskets

 

Segment performance is measured based on contribution margin, which includes only the direct controllable revenue and operating expenses of the segments. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead (see (a) below), nor does it include depreciation and amortization, other (income) expense, net and income taxes, or stock-based compensation, which are included within corporate overhead. Assets and liabilities are reviewed at the consolidated level by management and not accounted for by segment.

 

  

Three Months Ended

 
  

September 29,

  

October 1,

 
  

2024

  

2023

 
  

(in thousands)

 

Net Revenues:

        

Segment Net Revenues:

        

Consumer Floral & Gifts

 $135,180  $142,194 

BloomNet

  23,075   28,870 

Gourmet Foods & Gift Baskets

  84,003   98,109 

Corporate

  89   270 

Intercompany eliminations

  (257)  (393)

Total net revenues

 $242,090  $269,050 
         

Operating Income (Loss):

        

Segment Contribution Margin:

        

Consumer Floral & Gifts

 $4,944  $8,826 

BloomNet

  6,841   9,387 

Gourmet Foods & Gift Baskets

  (12,253)  (11,028)

Segment Contribution Margin Subtotal

  (468)  7,185 

Corporate (a)

  (33,475)  (31,568)

Depreciation and amortization

  (13,038)  (13,194)

Operating loss

 $(46,981) $(37,577)

 

(a) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, stock-based compensation, as well as changes in the fair value of the Company's NQDC Plan. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.

 

 

The following tables represent a disaggregation of revenue from contracts with customers, by channel: 

 

 

  

Three Months Ended

 
  

Consumer Floral &

          

Gourmet Foods &

  

Corporate and

         
  

Gifts

  

BloomNet

  

Gift Baskets

  

Eliminations

  

Consolidated

 
  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

 
  

(in thousands)

 

Net revenues

                                        

E-commerce

 $133,544  $140,335  $-  $-  $59,630  $69,576  $-  $-  $193,174  $209,911 

Other

  1,636   1,859   23,075   28,870   24,373   28,533   (168)  (123)  48,916   59,139 

Total net revenues

 $135,180  $142,194  $23,075  $28,870  $84,003  $98,109  $(168) $(123) $242,090  $269,050 
                                         

Other revenues detail

                                        

Retail and other

 $1,636  $1,859  $-  $-  $1,784  $1,934  $-  $-  $3,420  $3,793 

Wholesale

  -   -   10,112   11,797   22,589   26,599   -   -   32,701   38,396 

BloomNet services

  -   -   12,963   17,073   -   -   -   -   12,963   17,073 

Corporate

  -   -   -   -   -   -   89   270   89   270 

Eliminations

  -   -   -   -   -   -   (257)  (393)  (257)  (393)

Total other revenues

 $1,636  $1,859  $23,075  $28,870  $24,373  $28,533  $(168) $(123) $48,916  $59,139 

 

 
v3.24.3
Note 12 - Leases
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

Note 12 – Leases 

 

The Company currently leases plants, warehouses, offices, store facilities, and equipment under various leases through Fiscal 2036. Most lease agreements are of a long-term nature (over a year), although the Company does also enter into short-term leases, primarily for seasonal needs. Lease agreements may contain renewal options and rent escalation clauses and require the Company to pay real estate taxes, insurance, common area maintenance and operating expenses applicable to the leased properties. The Company accounts for its leases in accordance with ASC 842.

 

At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time, by assessing whether the Company has the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset.

 

At the lease commencement date, the Company determines if a lease should be classified as an operating or a finance lease (the Company currently has no finance leases) and recognizes a corresponding lease liability and a right-of-use asset on its Consolidated Balance Sheet. The lease liability is initially and subsequently measured as the present value of the remaining fixed minimum rental payments (including base rent and fixed common area maintenance) using discount rates as of the commencement date. Variable payments (including most utilities, real estate taxes, insurance and variable common area maintenance) are expensed as incurred. Further, the Company elected a short-term lease exception policy, permitting it to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The right-of-use asset is initially and subsequently measured at the carrying amount of the lease liability adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use asset. Right-of-use assets are assessed for impairment using the long-lived assets impairment guidance. The discount rate used to determine the present value of lease payments is the Company’s estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the Company generally cannot determine the interest rate implicit in the lease.

 

The Company recognizes expense for its operating leases on a straight-line basis over the lease term. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Renewal option periods are included in the measurement of lease liability, where the exercise is reasonably certain to occur. Key estimates and judgments in accounting for leases include how the Company determines: (1) lease payments, (2) lease term, and (3) the discount rate used in calculating the lease liability.

 

Additional information related to our leases is as follows:

 

  

Three Months Ended

 
  

September 29,

  

October 1,

 
  

2024

  

2023

 
  

(in thousands)

 

Lease costs:

        

Operating lease costs

 $6,004  $5,622 

Variable lease costs

  6,527   6,514 

Short-term lease cost

  755   883 

Sublease income

  (230)  (251)

Total lease costs

 $13,056  $12,768 
         

Cash paid for amounts included in measurement of operating lease liabilities

 $6,148  $5,638 

Right-of-use assets obtained in exchange for new operating lease liabilities

 $3,673  $91 

 

  

September 29,

 
  

2024

 
    

Weighted-average remaining lease term - operating leases (in years)

  7.7 

Weighted-discount rate - operating leases

  4.4%

 

Maturities of lease liabilities in accordance with ASC 842 as of September 29, 2024 and reconciliation to the consolidated balance sheet are as follows (in thousands):

 

Fiscal Year:

    

Remainder of 2025

 $16,040 

2026

  21,676 

2027

  18,389 

2028

  17,417 

2029

  16,483 

Thereafter

  53,074 

Total Future Minimum Lease Payments

  143,079 

Less: Imputed Remaining Interest

  21,845 

Total Operating Lease Liabilities

  121,234 

Less: Current portion of long-term operating lease liabilities

  16,836 

Long-term operating lease liabilities

 $104,398 

 
v3.24.3
Note 13 - Accrued Expenses
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]

Note 13 – Accrued Expenses

 

Accrued expenses consisted of the following:

 

   

September 29, 2024

    

June 30, 2024

  
   

(in thousands)

  

Payroll and employee benefits

   $ 24,119     $ 29,954  

Deferred revenue

     24,647       25,009  

Accrued marketing expenses

     11,199       10,709  

Accrued florist payout

     9,725       9,526  

Accrued purchases

     26,206       15,338  

Other

     33,030       30,767  

Accrued Expenses

   $ 128,926     $ 121,303  

  
v3.24.3
Note 14 - Commitments and Contingencies
 3 Months Ended
Sep. 29, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

Note 14 – Commitments and Contingencies

 

Litigation

 

There are various claims, lawsuits, and pending actions against the Company and its subsidiaries incident to the operations of its businesses. It is the opinion of management, after consultation with counsel, that the final resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

 
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 29, 2024
Insider Trading Arr Line Items  
Rule 10b5-1 Arrangement Adopted [Flag] false
Rule 10b5-1 Arrangement Terminated [Flag] false
Non-Rule 10b5-1 Arrangement Terminated [Flag] false
Non-Rule 10b5-1 Arrangement Adopted [Flag] false
v3.24.3
Significant Accounting Policies (Policies)
 3 Months Ended
Sep. 29, 2024
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by 1-800-FLOWERS.COM, Inc. and Subsidiaries (the “Company”) in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 29, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending June 29, 2025. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which provides a more complete understanding of our accounting policies, financial position, operating results and other matters.

 

The Company’s quarterly results may experience seasonal fluctuations. Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s second fiscal quarter, is expected to generate over 40% of the Company’s annual revenues, and all of its earnings. Due to the number of major floral gifting occasions, including Mother's Day, Valentine’s Day, Easter, and Administrative Professionals Week, revenues also have historically risen during the Company’s fiscal third and fourth quarters in comparison to its fiscal first quarter.

 
Use of Estimates, Policy [Policy Text Block]

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 
Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

 

Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Service and outbound shipping charged to customers are recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers.

 

A description of our principal revenue generating activities is as follows:

 

●

E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due prior to the date of shipment.

●

Retail revenues - consumer products sold through our retail stores. Revenue is recognized when control of the goods is transferred to the customer, at the point of sale, at which time payment is received.

●

Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer.

●

BloomNet Services - membership fees as well as other service offerings to florists. Membership and other subscription-based fees are recognized monthly as earned. Services revenues related to orders sent through the floral network are variable, based on either the number of orders or the value of orders, and are recognized in the period in which the orders are delivered. The contracts within BloomNet Services are typically month-to-month and, as a result no consideration allocation is necessary across multiple reporting periods. Payment is typically due less than 30 days from the date the services were performed. 

 

Deferred Revenues

 

Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. As such, customer orders are recorded as deferred revenue prior to shipment or rendering of product or services. Deferred revenues primarily relate to e-commerce orders placed, but not shipped, prior to the end of the fiscal period, as well as for subscription programs, including our various food, wine, and plant-of-the-month clubs and our Celebrations Passport® program.

 

Our total deferred revenue as of  June 30, 2024 was $25.0 million (included in “Accrued expenses” on our consolidated balance sheets), of which $13.0 million was recognized as revenue during the three months ended September 29, 2024. The deferred revenue balance as of  September 29, 2024 was $24.6 million.

 
New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires enhanced disclosures about significant segment expenses, includes enhanced interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements and related disclosures.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires the disclosure of additional information with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes and requires greater detail about significant reconciling items in the reconciliation. Additionally, the amendment requires disaggregated information pertaining to taxes paid, net of refunds received, for federal, state, and foreign income taxes. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and allows for either a prospective or retrospective approach on adoption. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.
v3.24.3
Note 4 - Inventory (Tables)
 3 Months Ended
Sep. 29, 2024
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
  

September 29, 2024

  

June 30, 2024

 
  

(in thousands)

 

Finished goods

 $170,479  $94,590 

Work-in-process

  26,526   25,849 

Raw materials

  78,318   56,152 

Total inventory

 $275,323  $176,591 
v3.24.3
Note 5 - Goodwill and Intangible Assets, Net (Tables)
 3 Months Ended
Sep. 29, 2024
Notes Tables  
Schedule of Goodwill [Table Text Block]
          

Gourmet

     
  

Consumer

      

Foods &

     
  

Floral &

      

Gift

     
  

Gifts

  

BloomNet

  

Baskets

  

Total

 
  

(in thousands)

 

Balance at June 30, 2024

 $153,577  $2,960  $-  $156,537 

Acquisition of Scharffen Berger

  -   -   111   111 

Balance at September 29, 2024

 $153,577  $2,960  $111  $156,648 
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Table Text Block]
     

September 29, 2024

  

June 30, 2024

 
     

Gross

          

Gross

         
  

Amortization

  

Carrying

  

Accumulated

      

Carrying

  

Accumulated

     
  

Period

  

Amount

  

Amortization

  

Net

  

Amount

  

Amortization

  

Net

 
  

(in years)

  

(in thousands)

 

Intangible assets with determinable lives

                           

Investment in licenses

 14 - 16  $7,420  $6,701  $719  $7,420  $6,674  $746 

Customer lists

 3 - 10   29,647   26,576   3,071   29,647   25,932   3,715 

Other

 5 - 14   2,946   2,678   268   2,946   2,664   282 

Total intangible assets with determinable lives

     40,013   35,955   4,058   40,013   35,270   4,743 

Trademarks with indefinite lives

     111,473   -   111,473   111,473   -   111,473 

Total identifiable intangible assets

    $151,486  $35,955  $115,531  $151,486  $35,270  $116,216 
v3.24.3
Note 7 - Debt, Net (Tables)
 3 Months Ended
Sep. 29, 2024
Notes Tables  
Schedule of Debt [Table Text Block]
  

September 29, 2024

  

June 30, 2024

 
  

(in thousands)

 

Revolver

 $45,000  $- 

Term Loans

  187,500   190,000 

Deferred financing costs

  (2,707)  (2,887)

Total debt

  229,793   187,113 

Less: current maturities of long-term debt

  57,500   10,000 

Long-term debt, net

 $172,293  $177,113 
v3.24.3
Note 8 - Property, Plant and Equipment, Net (Tables)
 3 Months Ended
Sep. 29, 2024
Notes Tables  
Property, Plant and Equipment [Table Text Block]
   

September 29, 2024

    

June 30, 2024

  
   

(in thousands)

  

Land

   $ 33,827     $ 33,827  

Orchards in production and land improvements

     20,917       20,604  

Building and building improvements

     69,410       69,089  

Leasehold improvements

     31,257       31,289  

Production equipment

     134,806       131,664  

Furniture and fixtures

     9,330       9,325  

Computer and telecommunication equipment

     42,820       42,159  

Software

     196,207       176,160  

Capital projects in progress

     12,777       23,172  

Property, plant and equipment, gross

     551,351       537,289  

Accumulated depreciation and amortization

     (326,112 )     (313,500 )

Property, plant and equipment, net

   $ 225,239     $ 223,789  
v3.24.3
Note 9 - Fair Value Measurements (Tables)
 3 Months Ended
Sep. 29, 2024
Notes Tables  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
  

Carrying

  

Fair Value Measurements

 
  

Value

  

Assets (Liabilities)

 
      

Level 1

  

Level 2

  

Level 3

 
  

(in thousands)

 

Assets (Liabilities) as of September 29, 2024

                

Trading securities held in a “rabbi trust” (1)

 $35,425  $35,425  $-  $- 
  $35,425  $35,425  $-  $- 
                 

Assets (Liabilities) as of June 30, 2024

                

Trading securities held in a “rabbi trust”(1)

 $32,805  $32,805  $-  $- 
  $32,805  $32,805  $-  $- 
v3.24.3
Note 11 - Business Segments (Tables)
 3 Months Ended
Sep. 29, 2024
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
  

Three Months Ended

 
  

September 29,

  

October 1,

 
  

2024

  

2023

 
  

(in thousands)

 

Net Revenues:

        

Segment Net Revenues:

        

Consumer Floral & Gifts

 $135,180  $142,194 

BloomNet

  23,075   28,870 

Gourmet Foods & Gift Baskets

  84,003   98,109 

Corporate

  89   270 

Intercompany eliminations

  (257)  (393)

Total net revenues

 $242,090  $269,050 
         

Operating Income (Loss):

        

Segment Contribution Margin:

        

Consumer Floral & Gifts

 $4,944  $8,826 

BloomNet

  6,841   9,387 

Gourmet Foods & Gift Baskets

  (12,253)  (11,028)

Segment Contribution Margin Subtotal

  (468)  7,185 

Corporate (a)

  (33,475)  (31,568)

Depreciation and amortization

  (13,038)  (13,194)

Operating loss

 $(46,981) $(37,577)
Disaggregation of Revenue [Table Text Block]
  

Three Months Ended

 
  

Consumer Floral &

          

Gourmet Foods &

  

Corporate and

         
  

Gifts

  

BloomNet

  

Gift Baskets

  

Eliminations

  

Consolidated

 
  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

  

September 29, 2024

  

October 1, 2023

 
  

(in thousands)

 

Net revenues

                                        

E-commerce

 $133,544  $140,335  $-  $-  $59,630  $69,576  $-  $-  $193,174  $209,911 

Other

  1,636   1,859   23,075   28,870   24,373   28,533   (168)  (123)  48,916   59,139 

Total net revenues

 $135,180  $142,194  $23,075  $28,870  $84,003  $98,109  $(168) $(123) $242,090  $269,050 
                                         

Other revenues detail

                                        

Retail and other

 $1,636  $1,859  $-  $-  $1,784  $1,934  $-  $-  $3,420  $3,793 

Wholesale

  -   -   10,112   11,797   22,589   26,599   -   -   32,701   38,396 

BloomNet services

  -   -   12,963   17,073   -   -   -   -   12,963   17,073 

Corporate

  -   -   -   -   -   -   89   270   89   270 

Eliminations

  -   -   -   -   -   -   (257)  (393)  (257)  (393)

Total other revenues

 $1,636  $1,859  $23,075  $28,870  $24,373  $28,533  $(168) $(123) $48,916  $59,139 
v3.24.3
Note 12 - Leases (Tables)
 3 Months Ended
Sep. 29, 2024
Notes Tables  
Lease, Cost [Table Text Block]
  

Three Months Ended

 
  

September 29,

  

October 1,

 
  

2024

  

2023

 
  

(in thousands)

 

Lease costs:

        

Operating lease costs

 $6,004  $5,622 

Variable lease costs

  6,527   6,514 

Short-term lease cost

  755   883 

Sublease income

  (230)  (251)

Total lease costs

 $13,056  $12,768 
         

Cash paid for amounts included in measurement of operating lease liabilities

 $6,148  $5,638 

Right-of-use assets obtained in exchange for new operating lease liabilities

 $3,673  $91 
  

September 29,

 
  

2024

 
    

Weighted-average remaining lease term - operating leases (in years)

  7.7 

Weighted-discount rate - operating leases

  4.4%
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Fiscal Year:

    

Remainder of 2025

 $16,040 

2026

  21,676 

2027

  18,389 

2028

  17,417 

2029

  16,483 

Thereafter

  53,074 

Total Future Minimum Lease Payments

  143,079 

Less: Imputed Remaining Interest

  21,845 

Total Operating Lease Liabilities

  121,234 

Less: Current portion of long-term operating lease liabilities

  16,836 

Long-term operating lease liabilities

 $104,398 
v3.24.3
Note 13 - Accrued Expenses (Tables)
 3 Months Ended
Sep. 29, 2024
Notes Tables  
Schedule of Accrued Liabilities [Table Text Block]
   

September 29, 2024

    

June 30, 2024

  
   

(in thousands)

  

Payroll and employee benefits

   $ 24,119     $ 29,954  

Deferred revenue

     24,647       25,009  

Accrued marketing expenses

     11,199       10,709  

Accrued florist payout

     9,725       9,526  

Accrued purchases

     26,206       15,338  

Other

     33,030       30,767  

Accrued Expenses

   $ 128,926     $ 121,303  
v3.24.3
Note 1 - Accounting Policies (Details Textual) - USD ($)
$ in Millions
 3 Months Ended
Sep. 29, 2024
Jun. 30, 2024
Contract with Customer, Liability, Current $ 24.6 $ 25.0
Contract with Customer, Liability, Revenue Recognized $ 13.0  
v3.24.3
Note 3 - Acquisitions (Details Textual) - USD ($)
$ in Thousands
Jul. 01, 2024
Apr. 03, 2024
Sep. 29, 2024
Jun. 30, 2024
Goodwill     $ 156,648 $ 156,537
Sharffen Berger [Member]        
Business Combination, Consideration Transferred $ 3,300      
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment 2,000      
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory 1,300      
Goodwill 100      
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities $ 100      
Card Isle [Member]        
Business Combination, Consideration Transferred   $ 3,600    
Goodwill   3,000    
Card Isle [Member] | Artist Contracts [Member]        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles   $ 600    
v3.24.3
Note 4 - Inventory - Summary of Inventory (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Jun. 30, 2024
Finished goods $ 170,479 $ 94,590
Work-in-process 26,526 25,849
Raw materials 78,318 56,152
Total inventory $ 275,323 $ 176,591
v3.24.3
Note 5 - Goodwill and Intangible Assets, Net (Details Textual)
$ in Millions
Sep. 29, 2024
USD ($)
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year $ 1.4
Finite-Lived Intangible Asset, Expected Amortization, Year One 1.4
Finite-Lived Intangible Asset, Expected Amortization, Year Two 0.6
Finite-Lived Intangible Asset, Expected Amortization, Year Three 0.3
Finite-Lived Intangible Asset, Expected Amortization, Year Four 0.2
Finite-Lived Intangible Asset, Expected Amortization, after Year Four $ 0.1
v3.24.3
Note 5 - Goodwill and Intangible Assets, Net - Goodwill by Segment (Details)
$ in Thousands
 3 Months Ended
Sep. 29, 2024
USD ($)
Balance $ 156,537
Acquisition of Scharffen Berger 111
Balance 156,648
Consumer Floral [Member]  
Balance 153,577
Acquisition of Scharffen Berger 0
Balance 153,577
BloomNet Wire Service [Member]  
Balance 2,960
Acquisition of Scharffen Berger 0
Balance 2,960
Gourmet Foods and Gift Baskets [Member]  
Balance 0
Acquisition of Scharffen Berger 111
Balance $ 111
v3.24.3
Note 5 - Goodwill and Intangible Assets, Net - Other Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Jun. 30, 2024
Intangible assets with determinable lives, gross $ 40,013 $ 40,013
Accumulated amortization 35,955 35,270
Intangible assets with determinable lives, net 4,058 4,743
Trademarks with indefinite lives, gross 111,473 111,473
Total identifiable intangible assets, gross 151,486 151,486
Total identifiable intangible assets, net 115,531 116,216
Licensing Agreements [Member]    
Intangible assets with determinable lives, gross 7,420 7,420
Accumulated amortization 6,701 6,674
Intangible assets with determinable lives, net $ 719 746
Licensing Agreements [Member] | Minimum [Member]    
Finite-lived intangible asset, useful life (Year) 14 years  
Licensing Agreements [Member] | Maximum [Member]    
Finite-lived intangible asset, useful life (Year) 16 years  
Customer Lists [Member]    
Intangible assets with determinable lives, gross $ 29,647 29,647
Accumulated amortization 26,576 25,932
Intangible assets with determinable lives, net $ 3,071 3,715
Customer Lists [Member] | Minimum [Member]    
Finite-lived intangible asset, useful life (Year) [1] 3 years  
Customer Lists [Member] | Maximum [Member]    
Finite-lived intangible asset, useful life (Year) [1] 10 years  
Other Intangible Assets [Member]    
Intangible assets with determinable lives, gross $ 2,946 2,946
Accumulated amortization 2,678 2,664
Intangible assets with determinable lives, net $ 268 $ 282
Other Intangible Assets [Member] | Minimum [Member]    
Finite-lived intangible asset, useful life (Year) [1] 5 years  
Other Intangible Assets [Member] | Maximum [Member]    
Finite-lived intangible asset, useful life (Year) [1] 14 years  
[1] The amortization of intangible assets for the years ended June 30, 2024, July 2, 2023 and July 3, 2022 was $4.4 million, $4.2 million and $3.9 million, respectively. Future estimated amortization expense is as follows: 2025 - $2.1 million, 2026 - $1.4 million, 2027 -$0.6 million, 2028 -$0.3 million, 2029 -$0.2 million, and thereafter -$0.1 million.
v3.24.3
Note 6 - Investments (Details Textual) - USD ($)
$ in Millions
Sep. 29, 2024
Jun. 30, 2024
Equity Securities without Readily Determinable Fair Value, Amount $ 2.4 $ 2.4
v3.24.3
Note 7 - Debt, Net (Details Textual) - USD ($)
$ in Millions
 7 Months Ended
Jun. 27, 2023
Aug. 01, 2023
Sep. 29, 2024
The 2020 Credit Agreement [Member] | Revolving Credit Facility [Member]      
Line of Credit Facility, Maximum Borrowing Capacity $ 225.0    
Line of Credit Facility, Maximum Borrowing Capacity During Seasonal Reduction   $ 125.0  
The 2020 Credit Agreement [Member] | Revolving Credit Facility [Member] | Base Rate [Member]      
Debt Instrument, Basis Spread on Variable Rate, Increase (Decrease) 0.25%    
The New Term Loan [Member] | The 2020 Credit Agreement [Member]      
Debt Instrument, Face Amount $ 200.0    
Long-Term Debt, Maturity, First 8 Payments, Quarterly     $ 2.5
Long-Term Debt, Maturity, Subsequent 11 Payments, Quarterly     5.0
Long-Term Debt, Maturity, Due on Maturity Date     125.0
Long-Term Debt, Maturity, Remainder of Fiscal Year     7.5
Long-Term Debt, Maturity, Year One     20.0
Long-Term Debt, Maturity, Year Two     20.0
Long-Term Debt, Maturity, Year Three     $ 140.0
Line of Credit and Term Loan [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member]      
Debt Instrument, Base Rate, Basis Spread on Variable Rate 0.50%    
Line of Credit and Term Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]      
Debt Instrument, Base Rate, Basis Spread on Variable Rate 0.10%    
Debt Instrument, Adjusted Rate 1.00%    
v3.24.3
Note 7 - Debt, Net - Summary of Current and Long-term Debt (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Jun. 30, 2024
Deferred financing costs $ (2,707) $ (2,887)
Debt instrument, carrying amount 229,793 187,113
Less: current maturities of long-term debt 57,500 10,000
Long-term debt, net 172,293 177,113
Line of Credit [Member]    
Revolver 45,000 0
Term Loan [Member]    
Term Loans $ 187,500 $ 190,000
v3.24.3
Note 8 - Property, Plant and Equipment, Net - Summary of Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Jun. 30, 2024
Property, plant, and equipment, gross $ 551,351 $ 537,289
Accumulated depreciation and amortization (326,112) (313,500)
Property, plant and equipment, net 225,239 223,789
Land [Member]    
Property, plant, and equipment, gross 33,827 33,827
Orchards in Production and Land Improvements [Member]    
Property, plant, and equipment, gross 20,917 20,604
Building and Building Improvements [Member]    
Property, plant, and equipment, gross 69,410 69,089
Leasehold Improvements [Member]    
Property, plant, and equipment, gross 31,257 31,289
Equipment [Member]    
Property, plant, and equipment, gross 134,806 131,664
Furniture and Fixtures [Member]    
Property, plant, and equipment, gross 9,330 9,325
Computer and Telecommunication Equipment [Member]    
Property, plant, and equipment, gross 42,820 42,159
Software and Software Development Costs [Member]    
Property, plant, and equipment, gross 196,207 176,160
Capital Projects in Progress [Member]    
Property, plant, and equipment, gross $ 12,777 $ 23,172
v3.24.3
Note 9 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Jun. 30, 2024
Trading securities held in a “rabbi trust” [1] $ 35,425 $ 32,805
Fair Value, Net Asset (Liability) 35,425 32,805
Fair Value, Inputs, Level 1 [Member]    
Trading securities held in a “rabbi trust” [1] 35,425 32,805
Fair Value, Net Asset (Liability) 35,425 32,805
Fair Value, Inputs, Level 2 [Member]    
Trading securities held in a “rabbi trust” [1] 0 0
Fair Value, Net Asset (Liability) 0 0
Fair Value, Inputs, Level 3 [Member]    
Trading securities held in a “rabbi trust” [1] 0 0
Fair Value, Net Asset (Liability) $ 0 $ 0
[1] The Company has established a NQDC Plan for certain members of senior management. Deferred compensation plan assets are invested in mutual funds held in a “rabbi trust,” which is restricted for payment to participants of the NQDC Plan. Trading securities held in a rabbi trust are measured using quoted market prices at the reporting date and are included in the “Other assets” line item, with the corresponding liability included in the “Other liabilities” line item in the consolidated balance sheets.
v3.24.3
Note 10 - Income Taxes (Details Textual) - USD ($)
$ in Millions
 3 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Jun. 30, 2024
Effective Income Tax Rate Reconciliation, Percent 29.60% 24.80%  
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00%    
Deferred Tax Assets, Valuation Allowance $ 4.9   $ 4.9
Unrecognized Tax Benefits 3.3    
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit $ 0.4    
Domestic Tax Jurisdiction [Member]      
Open Tax Year 2021 2022 2023    
State and Local Jurisdiction [Member]      
Open Tax Year 2020 2021 2022 2023 2024    
Foreign Tax Jurisdiction [Member]      
Open Tax Year 2017 2018 2019 2020 2021 2022 2023 2024    
v3.24.3
Note 11 - Business Segments (Details Textual)
 3 Months Ended
Sep. 29, 2024
Number of Reportable Segments 3
v3.24.3
Note 11 - Business Segments - Segment Performance (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Net revenues $ 242,090 $ 269,050
Depreciation and amortization (13,038) (13,194)
Operating loss (46,981) (37,577)
Operating Segments [Member]    
Contribution margin (468) 7,185
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member]    
Net revenues 89 270
Corporate (a) [1] (33,475) (31,568)
Intersegment Eliminations [Member]    
Net revenues (257) (393)
Consumer Floral and Gifts [Member] | Operating Segments [Member]    
Net revenues 135,180 142,194
BloomNet [Member] | Operating Segments [Member]    
Net revenues 23,075 28,870
Gourmet Foods and Gift Baskets [Member] | Operating Segments [Member]    
Net revenues 84,003 98,109
Contribution margin (12,253) (11,028)
Consumer Floral [Member] | Operating Segments [Member]    
Contribution margin 4,944 8,826
BloomNet Wire Service [Member] | Operating Segments [Member]    
Contribution margin $ 6,841 $ 9,387
[1] (a) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, as well as Stock-based compensation. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.
v3.24.3
Note 11 - Business Segments - Disaggregation of Revenue From Contracts With Customers (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Net revenues $ 242,090 $ 269,050
E-commerce [Member]    
Net revenues 193,174 209,911
Product and Service, Other [Member]    
Net revenues 48,916 59,139
Product and Service, Other [Member] | Retail and Other [Member]    
Net revenues 3,420 3,793
Product and Service, Other [Member] | Wholesale [Member]    
Net revenues 32,701 38,396
Product and Service, Other [Member] | Bloomnet Services [Member]    
Net revenues 12,963 17,073
Operating Segments [Member] | Consumer Floral and Gifts [Member]    
Net revenues 135,180 142,194
Operating Segments [Member] | BloomNet [Member]    
Net revenues 23,075 28,870
Operating Segments [Member] | Gourmet Foods and Gift Baskets [Member]    
Net revenues 84,003 98,109
Operating Segments [Member] | E-commerce [Member] | Consumer Floral and Gifts [Member]    
Net revenues 133,544 140,335
Operating Segments [Member] | E-commerce [Member] | BloomNet [Member]    
Net revenues 0 0
Operating Segments [Member] | E-commerce [Member] | Gourmet Foods and Gift Baskets [Member]    
Net revenues 59,630 69,576
Operating Segments [Member] | Product and Service, Other [Member] | Consumer Floral and Gifts [Member]    
Net revenues 1,636 1,859
Operating Segments [Member] | Product and Service, Other [Member] | Consumer Floral and Gifts [Member] | Retail and Other [Member]    
Net revenues 1,636 1,859
Operating Segments [Member] | Product and Service, Other [Member] | Consumer Floral and Gifts [Member] | Wholesale [Member]    
Net revenues 0 0
Operating Segments [Member] | Product and Service, Other [Member] | Consumer Floral and Gifts [Member] | Bloomnet Services [Member]    
Net revenues 0 0
Operating Segments [Member] | Product and Service, Other [Member] | BloomNet [Member]    
Net revenues 23,075 28,870
Operating Segments [Member] | Product and Service, Other [Member] | BloomNet [Member] | Retail and Other [Member]    
Net revenues 0 0
Operating Segments [Member] | Product and Service, Other [Member] | BloomNet [Member] | Wholesale [Member]    
Net revenues 10,112 11,797
Operating Segments [Member] | Product and Service, Other [Member] | BloomNet [Member] | Bloomnet Services [Member]    
Net revenues 12,963 17,073
Operating Segments [Member] | Product and Service, Other [Member] | Gourmet Foods and Gift Baskets [Member]    
Net revenues 24,373 28,533
Operating Segments [Member] | Product and Service, Other [Member] | Gourmet Foods and Gift Baskets [Member] | Retail and Other [Member]    
Net revenues 1,784 1,934
Operating Segments [Member] | Product and Service, Other [Member] | Gourmet Foods and Gift Baskets [Member] | Wholesale [Member]    
Net revenues 22,589 26,599
Operating Segments [Member] | Product and Service, Other [Member] | Gourmet Foods and Gift Baskets [Member] | Bloomnet Services [Member]    
Net revenues 0 0
Segment Reporting, Reconciling Item, Excluding Corporate Nonsegment [Member]    
Net revenues (168) (123)
Segment Reporting, Reconciling Item, Excluding Corporate Nonsegment [Member] | E-commerce [Member]    
Net revenues 0 0
Segment Reporting, Reconciling Item, Excluding Corporate Nonsegment [Member] | Product and Service, Other [Member]    
Net revenues (168) (123)
Consolidation, Eliminations [Member] | Product and Service, Other [Member] | Retail and Other [Member]    
Net revenues 0 0
Consolidation, Eliminations [Member] | Product and Service, Other [Member] | Wholesale [Member]    
Net revenues 0 0
Consolidation, Eliminations [Member] | Product and Service, Other [Member] | Bloomnet Services [Member]    
Net revenues 0 0
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member]    
Net revenues 89 270
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member] | Product and Service, Other [Member]    
Net revenues 89 270
Intersegment Eliminations [Member]    
Net revenues (257) (393)
Intersegment Eliminations [Member] | Product and Service, Other [Member]    
Net revenues $ (257) $ (393)
v3.24.3
Note 12 - Leases - Lease Costs (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Operating lease costs $ 6,004 $ 5,622
Variable lease costs 6,527 6,514
Short-term lease cost 755 883
Sublease income (230) (251)
Total lease costs 13,056 12,768
Cash paid for amounts included in measurement of operating lease liabilities 6,148 5,638
Right-of-use assets obtained in exchange for new operating lease liabilities $ 3,673 $ 91
Weighted-average remaining lease term - operating leases (in years) (Year) 7 years 8 months 12 days  
Weighted-discount rate - operating leases 4.40%  
v3.24.3
Note 12 - Leases - Maturities of Lease Liabilities (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Jun. 30, 2024
Remainder of 2025 $ 16,040  
2026 21,676  
2027 18,389  
2028 17,417  
2029 16,483  
Thereafter 53,074  
Total Future Minimum Lease Payments 143,079  
Less: Imputed Remaining Interest 21,845  
Total Operating Lease Liabilities 121,234  
Less: Current portion of long-term operating lease liabilities 16,836 $ 16,511
Long-term operating lease liabilities $ 104,398 $ 105,866
v3.24.3
Note 13 - Accrued Expenses - Accrued Expenses (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Jun. 30, 2024
Payroll and employee benefits $ 24,119 $ 29,954
Deferred revenue 24,647 25,009
Accrued marketing expenses 11,199 10,709
Accrued florist payout 9,725 9,526
Accrued purchases 26,206 15,338
Other 33,030 30,767
Accrued Expenses $ 128,926 $ 121,303
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