What 1-800 FLOWERS.COM (FLWS) Said on Its Q1 Earnings Call

Key Points

• Revenue fell 11.1% year over year to $171.4 million, while the adjusted EBITDA loss was roughly flat at $31.9 million. For fiscal 2027, 1-800 FLOWERS.COM expects revenue to decline 2%–5% and adjusted EBITDA of about $10 million–$15 million.
• Demand improved on the company’s two main websites: net orders declined 8%, versus a 12.6% drop a year earlier, and management cited positive recent comparable performance at 1-800-flowers.com. The company is cautiously optimistic about holiday trends as it rolls out merchandising, marketing, digital and marketplace initiatives.
• Asset sales are reducing debt: proceeds from selling PersonalizationMall.com and Things Remembered included about $22 million used to pay down the term loan, bringing its balance to $111.3 million. The company also agreed to sell its Jacksonville facility for approximately $10 million.

1-800 FLOWERS.COM NASDAQ: FLWS reported an 11.1% decline in fiscal first-quarter revenue, but executives said demand trends on its two primary websites improved as the gifting company prepared for the holiday season.

Revenue from continuing operations fell to $171.4 million from $192.7 million a year earlier. The adjusted EBITDA loss from continuing operations was $31.9 million, compared with a $31.7 million loss in the prior-year quarter.

For fiscal 2027, the company expects revenue to decline between 2% and 5% and adjusted EBITDA of approximately $10 million to $15 million. Chief Financial Officer James Langrock said the updated outlook reflects the sale of PersonalizationMall.com and Things Remembered as well as expectations for the underlying business.

Primary website demand improves

Net order demand on 1-800-flowers.com and harryanddavid.com declined 8% year over year in the quarter, an improvement from a 12.6% decline in the year-earlier period. Demand across the company’s other websites fell 36%, although Langrock said those trends improved later in the quarter and into October.

Chief Executive Officer Adolfo Villagomez said the decline on the primary websites moderated to low single digits in October. During the question-and-answer session, he said 1-800-flowers.com had posted positive comparable performance over the prior two weeks and was positive month to date.

Villagomez said the company was cautiously optimistic that improving trends could continue into the holiday season, while adding that Harry & David would receive particular attention during the fiscal second quarter.

The company is focusing its turnaround on merchandising, marketing, digital shopping and new channels, including third-party marketplaces. Villagomez said merchandising and new-channel initiatives began to have an impact in the first quarter, while marketing and digital efforts were still being built or launched.

Promotions weigh on margins

First-quarter gross margin declined to 34.1% from 35.3% a year earlier. Langrock attributed the decrease to lower sales volume, higher fuel surcharges and promotional testing on the floral website, partly offset by cost reductions and operational efficiencies.

Villagomez said the company invested in promotions and margins to test floral assortments and price points. He expects the resulting margin pressure to decline as the company applies what it has learned.

Overall net average order value rose 2% to approximately $84.58 from $82.90, Langrock said. Villagomez said lower-income consumers remain under pressure and that the company’s floral strategy is moving toward higher price points and higher-income customers.

Among the initiatives supporting the floral business is a direct-ship backup program intended to supplement the florist network. Its first phase launched in September, with an expansion expected in November. The company also expects to launch an AI-powered shopping agent developed with Google this month.

Segment results and cost initiatives

E-commerce revenue fell 12.3% to $128.4 million, reflecting weakness at other websites and in business-to-business operations. Wholesale and other revenue declined 10.7% to $20.5 million, while BloomNet revenue fell 3.6% to $22.3 million.

Langrock said a fire at the company’s Hebron, Ohio, facility temporarily limited its ability to fulfill and sell some products, affecting revenue by approximately 1%. He also said improved profitability in wholesale and other was largely driven by customer and product mix and the timing of shipments.

The company began reporting results under the three segments in the first quarter, replacing its prior structure to reflect its shift toward managing the business by channel and function rather than by brand.

Excluding non-recurring charges and the impact of its non-qualified deferred compensation plan in both periods, operating expenses fell $10.6 million to $102.3 million. Langrock said network optimization benefits are not included in the fiscal 2027 outlook and are expected to begin in fiscal 2028.

Asset sales and debt

The company completed the sale of PersonalizationMall.com and Things Remembered during the fiscal second quarter in a transaction valued at approximately $45 million. Langrock said about $22 million of the proceeds was used to pay down the term loan, with the remainder available for strategic initiatives.

At the end of the first quarter, net debt was $263.6 million and cash was $9.4 million. Following the asset sale, the company reduced its outstanding term loan balance to $111.3 million, Langrock said.

1-800 FLOWERS.COM also agreed to sell its Jacksonville, Florida, facility for approximately $10 million, subject to customary closing conditions. Langrock said the company continues to work with Guggenheim to evaluate its overall structure, including potential non-strategic asset sales and other capital-raising opportunities.

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

1-800 FLOWERS.COM, Inc is a multi-brand provider of gifts, flowers and gourmet foods. The company connects consumers with products for holidays, birthdays, anniversaries, sympathy occasions and other celebrations through e-commerce websites, telephone ordering and a network of affiliated florists.

Its portfolio includes the 1-800-Flowers.com floral brand, Harry & David fruit and gourmet gift business, Cheryl’s Cookies, The Popcorn Factory, Wolferman’s Bakery, 1-800-Baskets.com and Personal Creations.

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