1-800 FLOWERS.COM Q4 Earnings Call Highlights

Key Points

• Revenue and profitability declined sharply: Fiscal 2026 revenue fell 10.8% to $1.5 billion, while adjusted EBITDA dropped to $2.9 million from $29.2 million. Fourth-quarter revenue decreased 12.9% year over year, and the adjusted EBITDA loss widened to $31 million.
• The company is pursuing greater financial flexibility: 1-800-FLOWERS.COM amended its credit agreement, is evaluating non-strategic asset sales and potential debt or equity financing, and retained Guggenheim Securities to advise on capital-structure options.
• Fiscal 2027 priorities include recovery and cost savings: Management expects revenue to decline in the mid-single digits and adjusted EBITDA to reach $10 million-$15 million, supported by an additional $15 million-$20 million of identified savings and reinvestment in marketing, technology and customer experience.

1-800 FLOWERS.COM NASDAQ: FLWS reported lower fourth-quarter and full-year fiscal 2026 revenue and adjusted EBITDA, while outlining plans to raise capital, potentially divest non-strategic assets and reinvest savings into marketing, technology and customer-experience initiatives.

Chief Executive Officer Adolfo Villagomez said fiscal 2026 focused on strengthening the company’s operating foundation through leadership changes, organizational simplification, digital modernization and clearer accountability across the customer journey. The company is entering fiscal 2027 with revenue recovery as its top operational priority, he said.

“We now have a stronger leadership team, better capabilities, deeper customer insights, and a more agile organization,” Villagomez said. “As we enter fiscal 2027, we will continue building those capabilities, but our focus is increasingly on putting them to work and demonstrating what we can deliver.”

Financial Flexibility and Capital Options

The company said it amended its credit agreement with banking partners, extending its covenant-relief period and providing more flexibility in using proceeds from possible asset sales. Under the amended agreement, 1-800-FLOWERS.COM may retain a portion of potential asset-sale proceeds for strategic investments.

Chief Financial Officer James Langrock said the company is also evaluating non-strategic asset sales, public or private debt and equity financings, and other capital-structure transactions. Guggenheim Securities has been retained as financial adviser for the review.

Langrock said the actions are intended to improve financial flexibility and support investments in initiatives designed to improve customer acquisition, retention, engagement and longer-term growth. He cautioned that the company is in the early stages of the process and that there is no assurance it will result in a transaction.

During the question-and-answer session, Langrock said the company is reviewing both brands and hard assets for possible divestitures, focusing on assets that may not be necessary for its long-term strategy or could be operated through third-party partnerships.

Revenue and Profitability Decline

Fourth-quarter consolidated revenue declined 12.9% year over year to $293.1 million. Revenue in the Consumer Floral and Gifts segment fell 13.4%, while Gourmet Foods and Gift Baskets revenue declined 15.4%. BloomNet revenue increased 1.9%.

Langrock said the timing of Easter affected Gourmet Foods and Gift Baskets results, contributing approximately 2.5 to 3.5 percentage points to that segment’s revenue decline and about 1.5 percentage points to consolidated quarterly revenue. The Easter timing shift did not affect full-year results, he said.

For fiscal 2026, consolidated revenue declined 10.8% to $1.5 billion. Transactions fell 17.6%, partially offset by a 5.5% increase in average order value and growth in the company’s wholesale business.

• Fourth-quarter adjusted gross margin was 34.7%, compared with 35.5% a year earlier.
• Full-year adjusted gross margin was 38.0%, compared with 39.1% in fiscal 2025.
• Fourth-quarter adjusted EBITDA loss was $31 million, compared with a $24.2 million loss in the prior-year period.
• Full-year adjusted EBITDA was $2.9 million, down from $29.2 million a year earlier.

Gross margin reflected sales deleveraging, higher commodity costs and inventory reserves, partly offset by cost reductions, operating efficiencies and an approximately $7 million benefit from tariff refunds, Langrock said. He said the company does not expect additional tariff refunds at this time.

Among commodities, Langrock said cocoa remained a year-over-year headwind despite moderating from peak market prices. Costs for butter, flour and liquid eggs had provided some benefit, although flour costs had begun to rise. The company is also monitoring outbound shipping costs and fuel surcharges.

Cost Savings, Liquidity and Fiscal 2027 Outlook

The company completed its original $50 million run-rate cost-savings target ahead of schedule and identified an additional $15 million to $20 million of opportunities across cost of goods sold and operating expenses. It expects to execute those additional savings initiatives during fiscal 2027, with the full benefit expected in fiscal 2028.

At the end of fiscal 2026, net debt was $128 million, compared with $114 million a year earlier. Cash totaled $11 million, and inventory was $153 million, down from $177 million. The company had $139 million in term debt and no borrowings under its revolving credit facility. Langrock said working-capital management contributed to a $55 million year-over-year improvement in free cash flow.

For fiscal 2027, 1-800-FLOWERS.COM expects revenue to decline in the mid-single-digit range and adjusted EBITDA of $10 million to $15 million. The EBITDA outlook includes approximately $12 million of additional variable compensation expense compared with fiscal 2026.

Langrock said the outlook assumes the company will receive the full benefit of its $50 million in run-rate savings, though some of those savings will be reinvested in marketing, marketing technology and digital customer-experience improvements. The forecast does not include any potential benefit from investments funded by future capital-raising activity or divestitures.

The company expects the rate of revenue decline to moderate during fiscal 2027 as its initiatives gain traction, though it did not provide quarterly guidance.

Customer Experience and Marketing Initiatives

Villagomez said the company has shifted to a function-based operating model that separates responsibility for marketing, merchandising and digital experience. Marketing is focused on customer acquisition, retention and engagement; merchandising oversees assortment, pricing, delivery fees and promotions; and the digital team is responsible for improving websites and conversion.

The company recently launched a redesigned Harry & David website in A/B testing, featuring a mobile-first design, improved navigation, dynamic product ranking and AI-powered search. It also moved some lower-traffic standalone websites into categories on harryanddavid.com to simplify its digital ecosystem.

Villagomez said the company is working to better align florist-fulfilled and direct-shipped floral offerings. More than 60% of Consumer Floral and Gifts fulfillment is currently florist fulfilled, according to Langrock. Rather than targeting a specific mix, Villagomez said the company intends to offer customers the fulfillment option best suited to their location and needs.

The company ended fiscal 2026 with 7.5 million customers and more than 800,000 Passport members. Existing customers generated 77% of revenue. Multi-category customers represented 12% of customers and 26% of revenue, while Passport members represented 9% of customers and 19% of revenue.

Villagomez said the company plans to expand Passport beyond free shipping, using a redesigned loyalty approach to segment customers, improve retention and reduce customer reacquisition costs. He also said third-party marketplace relationships with Amazon, DoorDash, Instacart and others were growing from a small base at double- and, in some cases, triple-digit rates and were marketing-contribution-margin positive. The company has seen little cannibalization of its own digital channels, he said.

About 1-800 FLOWERS.COM (NASDAQ:FLWS)

1-800-FLOWERS.COM, Inc, founded in 1976 by Jim McCann and headquartered in Jericho, New York, is a leading floral and gift retailer in North America. Operating primarily through its online platform and call center, the company offers a wide selection of fresh-cut flowers, gourmet foods, gift baskets, plants and home décor items. With a network of affiliated florists and its own floral production farms, 1-800-FLOWERS.COM facilitates same-day delivery services across the United States, reaching more than 90% of U.S.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.