Financial results
1-800-FLOWERS.COM weathers revenue decline with its flexible business model
The model has given the company the flexibility to adapt to changing market trends while providing exceptional service and products to its customers both domestically and internationally, it said.
In a statement, it said total consolidated revenues decreased 17.9% to $398.8 million, compared with total consolidated revenues of $485.9 million in the prior year period, which included a 53rd week. Excluding the impact of the 53rd week in the prior year period, revenues declined 14.8%.
Gross profit margin increased 340 basis points to 37.1%, compared with 33.7% in the prior year period. This continues the trend of improving gross margin since the fiscal first quarter led by improvements across the company’s three business segments, which benefited from lower ocean freight costs, the company’s strategic pricing initiatives, and a decline in certain commodity costs, it said in a statement.
Operating expenses declined $18.7 million, or 9.8%, from $190.7 million in the prior year period to $172.0 million. On a percentage basis, operating expenses increased to 43.1% of sales, compared with 39.3% in the prior year period, primarily due to sales deleverage and the performance of its non-qualified deferred compensation plan, which was partially mitigated by marketing efficiencies.
Net loss for the quarter was $22.5 million, or ($0.35) per share, compared with a net loss of $22.3 million, or ($0.34) per share, in the prior year period. Net loss and net loss per share in the current year period were impacted by the tax treatment of the impairment charge recorded during the fiscal third quarter. Adjusted net loss1 was $17.8 million, or ($0.28) per share, compared with an adjusted net loss of $21.8 million, or ($0.34) per share, in the prior year period.
Gourmet revenues
Its Gourmet Foods and Gift Baskets revenues for the quarter were $120.7 million, declining 18.7% compared with $148.4 million in the prior year period. Gross profit margin was 28.1%, compared with 23.2% in the prior year period. Segment contribution margin1 loss was $13.4 million, compared with segment contribution margin1 loss of $23.7 million in the prior year period. This primarily reflects the gross margin improvement combined with more efficient marketing spend.
Jim McCann, Chairman and Chief Executive Officer of 1-800-FLOWERS.COM, Inc, said “We successfully mitigated the impact of a softer sales environment during Fiscal 2023 through our expense optimization efforts coupled with the improvement in our gross margin. Simultaneously, we executed on our strategic initiatives to offer customers an expanding array of gift-giving options across multiple price points, we invested in our technology platform to enhance the customer experience, and we expanded our product portfolio, both organically and through acquisitions, which positions us well as a premier gift giving destination once the broader consumer environment improves.”
“As we look beyond the current horizon, we believe that the actions we have taken to enhance the customer experience, improve margins, and optimize expenses, combined with an improved consumer environment, will enable us to achieve our historical sales growth, gross profit margin and adjusted EBITDA margin rates.”
