1-800-FLOWERS.COM Q1 2025 Earnings Call Summary

In the recent fiscal 2025 first quarter earnings call, 1-800-FLOWERS.COM (NASDAQ: FLWS) reported a 10% decline in consolidated revenue year-over-year, driven by a shift in wholesale orders and reduced e-commerce performance. Despite these challenges, the company is hopeful for the holiday season, predicting increased sales, primarily in its Gourmet Foods & Gifts segment, and is launching new initiatives such as exclusive Harry & David pop-up shops in select Macy's (NYSE:M) locations. The company continues to focus on leveraging artificial intelligence (AI) to enhance customer service and overall customer experience, maintaining its guidance for fiscal 2025.

Key Takeaways

• Revenue declined by 10%, with e-commerce down by 8%.
• Orders decreased by 6.5% with a 1.5% drop in average order value.
• Adjusted EBITDA loss of $27.9 million, despite reduced operating expenses.
• Gourmet Foods & Gifts and Consumer Floral & Gifts segments saw revenue declines of 14.4% and 4.9%, respectively.
• BloomNet revenue decreased by 20.1% due to a partner's merger.
• Inventory levels at $275.3 million; total debt stable at $232.5 million.
• Projected fiscal 2025 revenue flat to mid-single digits down; adjusted EBITDA guidance of $85 million to $95 million.
• New partnerships and same-day delivery of non-floral products anticipated to boost holiday sales.
• Expectation of 20-25% increase in crop yield for key fruits to enhance inventory and reduce costs.

Company Outlook

• Targeting revenue growth of flat to mid-single digits down for fiscal 2025.
• Free cash flow projected between $45 million to $55 million.
• Optimistic about improved e-commerce trends and holiday performance.

Bearish Highlights

• Shift of $3 million in wholesale orders negatively impacted revenue.
• BloomNet segment experienced a 20.1% revenue decline due to a partner's merger.

Bullish Highlights

• Launching Harry & David pop-up shops in Macy's.
• Continued success with affluent customers; efforts to attract lower-end customers gaining traction.
• Favorable pear crop expected to improve inventory management.

Misses

• Revenue expectations missed due to a 10% decline in consolidated revenue.
• E-commerce revenue decreased by 8%, with loss in order count and average order value.

Q&A Highlights

Management expressed confidence in future revenue improvement, despite challenges with increased media costs. Future expansions into brick-and-mortar retail are being explored, especially following the successful pop-up initiative.

InvestingPro Insights

With a market capitalization of $527.9 million, 1-800-FLOWERS.COM is exhibiting a cautious yet optimistic outlook despite recent revenue declines. Analysts forecast net income growth this year, correlating with the anticipated holiday season increase in activity and strategic initiatives.

Conclusion

As we approach the holiday season, 1-800-FLOWERS.COM remains focused on enhancing customer experiences through innovative initiatives while navigating a challenging market landscape. Their proactive investments in technology and partnerships signal confidence in future growth.

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