0001084869 1 800 FLOWERS COM INC false --06-30 Q1 2024 0.01 0.01 10,000,000 10,000,000 0 0 0.01 0.01 200,000,000 200,000,000 58,309,547 58,273,747 0.01 0.01 200,000,000 200,000,000 32,348,221 32,348,221 20,576,358 20,565,875 5,280,000 5,280,000 2.6 21.0 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 false false false false 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. 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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 October 1, 2023

 

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

flws20231114_10qimg001.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 November 3, 2023:

 

Class A common stock: 37,829,997

Class B common stock: 27,068,221

 

 
Table of Contents

 

 

1-800-FLOWERS.COM, Inc.

FORM 10-Q

For the quarterly period ended October 1, 2023

TABLE OF CONTENTS

 

   

Page

Part I.

Financial Information

  

Item 1.

Condensed Consolidated Financial Statements

1
 

Condensed Consolidated Balance Sheets – October 1, 2023 (Unaudited) and July 2, 2023

1
 

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) – Three Months Ended October 1, 2023 and October 2, 2022

2
 

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) – Three Months Ended October 1, 2023 and October 2, 2022

3
 

Condensed Consolidated Statements of Cash Flows (Unaudited) – Three Months Ended October 1, 2023 and October 2, 2022

4
 

Notes to Condensed Consolidated Financial Statements (Unaudited)

5

Item 2.

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

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

Item 4.

Controls and Procedures

29
     

Part II.

Other Information

 30

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

31

Item 3.

Defaults upon Senior Securities

31

Item 4.

Mine Safety Disclosures

31

Item 5.

Other Information

31

Item 6.

Exhibits

31
     

Signatures

32

 

 
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)

 

  

October 1, 2023

  

July 2, 2023

 
  

(unaudited)

     

Assets

        

Current assets:

        

Cash and cash equivalents

 $8,375  $126,807 

Trade receivables, net

  44,239   20,419 

Inventories

  280,621   191,334 

Prepaid and other

  49,347   34,583 

Total current assets

  382,582   373,143 
         

Property, plant and equipment, net

  229,193   234,569 

Operating lease right-of-use assets

  120,499   124,715 

Goodwill

  153,376   153,376 

Other intangibles, net

  138,773   139,888 

Other assets

  26,925   25,739 

Total assets

 $1,051,348  $1,051,430 
         

Liabilities and Stockholders' Equity

        

Current liabilities:

        

Accounts payable

 $51,764  $52,588 

Accrued expenses

  142,695   141,914 

Current maturities of long-term debt

  45,000   10,000 

Current portion of long-term operating lease liabilities

  15,580   15,759 

Total current liabilities

  255,039   220,261 
         

Long-term debt, net

  184,071   186,391 

Long-term operating lease liabilities

  113,278   117,330 

Deferred tax liabilities, net

  30,555   31,134 

Other liabilities

  25,514   24,471 

Total liabilities

  608,457   579,587 
         

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, 58,309,547 and 58,273,747 shares issued at October 1, 2023 and July 2, 2023, respectively

  583   583 

Class B common stock, $0.01 par value, 200,000,000 shares authorized, 32,348,221 shares issued at October 1, 2023 and July 2, 2023

  323   323 

Additional paid-in capital

  390,579   388,215 

Retained earnings

  239,841   271,083 

Accumulated other comprehensive loss

  (170

)

  (170

)

Treasury stock, at cost, 20,576,358 and 20,565,875 Class A shares at October 1, 2023 and July 2, 2023, respectively and 5,280,000 Class B shares at October 1, 2023 and July 2, 2023

  (188,265

)

  (188,191

)

Total stockholders’ equity

  442,891   471,843 

Total liabilities and stockholders’ equity

 $1,051,348  $1,051,430 

 

See accompanying Notes to Condensed Consolidated Financial Statements. 

 

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Table of Contents

 

 

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

  
   

October 1,

2023

    

October 2,

2022

  
                 

Net revenues

   $ 269,050     $ 303,604  

Cost of revenues

     167,122       202,146  

Gross profit

     101,928       101,458  

Operating expenses:

                

Marketing and sales

     82,518       89,139  

Technology and development

     15,304       14,740  

General and administrative

     28,489       26,245  

Depreciation and amortization

     13,194       12,694  

Total operating expenses

     139,505       142,818  

Operating loss

     (37,577

)

     (41,360

)

Interest expense, net

     3,482       2,821  

Other expense, net

     474       922  

Loss before income taxes

     (41,533

)

     (45,103

)

Income tax benefit

     (10,291

)

     (11,411

)

Net loss and comprehensive net loss

   $ (31,242

)

   $ (33,692

)
                 

Basic and diluted net loss per common share

   $ (0.48

)

   $ (0.52

)
                 

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

     64,785       64,538  

 

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 October 1, 2023 and October 2, 2022

  
   

Common Stock

    

Additional

    

Retained

   

Accumulated

Other

                    

Total

  
   

Class A

    

Class B

    

Paid-in

    

Earnings

    

Comprehensive

    

Treasury Stock

    

Stockholders’

  
   

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

(Deficit)

   

Loss

    

Shares

    

Amount

    

Equity

  
                                                                                 

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  
                                                                                 

Balance at July 3, 2022

     57,706,389     $ 577       32,529,614     $ 325     $ 379,885     $ 315,785     $ (211

)

     25,698,396     $ (186,952

)

   $ 509,409  

Net loss

     -       -       -       -       -       (33,692

)

     -       -       -       (33,692

)

Stock-based compensation

     -       -       -       -       1,555       -       -       -       -       1,555  

Balance at October 2, 2022

     57,706,389     $ 577       32,529,614     $ 325     $ 381,440     $ 282,093     $ (211

)

     25,698,396     $ (186,952

)

   $ 477,272  

 

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

  
   

October 1, 2023

    

October 2, 2022

  
                 

Operating activities:

                

Net loss

   $ (31,242

)

   $ (33,692

)

Adjustments to reconcile net loss to net cash used in operating activities:

                

Depreciation and amortization

     13,194       12,694  

Amortization of deferred financing costs

     180       345  

Deferred income taxes

     (579

)

     (381

)

Bad debt expense

     586       265  

Stock-based compensation

     2,364       1,555  

Other non-cash items

     270       326  

Changes in operating items:

                

Trade receivables

     (24,407

)

     (25,416

)

Inventories

     (89,287

)

     (95,038

)

Prepaid and other

     (14,764

)

     (19,425

)

Accounts payable and accrued expenses

     (42

)

     11,742  

Other assets and liabilities

     (157

)

     702  

Net cash used in operating activities

     (143,884

)

     (146,323

)
                 

Investing activities:

                

Capital expenditures

     (6,974

)

     (11,033

)

Net cash used in investing activities

     (6,974

)

     (11,033

)
                 

Financing activities:

                

Acquisition of treasury stock

     (74

)

     -  

Proceeds from bank borrowings

     35,000       140,000  

Repayment of bank borrowings

     (2,500

)

     (5,000

)

Debt issuance cost

     -       333  

Net cash provided by financing activities

     32,426       135,333  
                 

Net change in cash and cash equivalents

     (118,432

)

     (22,023

)

Cash and cash equivalents:

                

Beginning of period

     126,807       31,465  

End of period

   $ 8,375     $ 9,442  

 

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-month period ended October 1, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2024. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended July 2, 2023, 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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Table of Contents
 

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 July 2, 2023 was $30.8 million (included in “Accrued expenses” on our consolidated balance sheets), of which $16.1 million was recognized as revenue during the three months ended October 1, 2023. The deferred revenue balance as of October 1, 2023 was $29.7 million.  

 

Recently Issued Accounting Pronouncements

 

The Company does not expect that any recently issued accounting pronouncements will have a material effect on its consolidated financial statements.
 

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 October 1, 2023 and October 2, 2022, there is no dilutive impact to the net loss per share calculation for the respective periods.
 

Note 3 – Acquisitions

 

Acquisition of Things Remembered

 

On January 10, 2023, the Company completed its acquisition of certain assets of the Things Remembered brand, a provider of personalized gifts, whose operations are integrated within the PersonalizationMall.com brand, in the Consumer Floral & Gifts segment. The Company used cash on hand to fund the $5.0 million purchase, which included the intellectual property, customer list, certain inventory, and equipment. The acquisition did not include Things Remembered retail stores. Things Remembered’s annual revenues from its e-commerce operations, based on its most recently available unaudited financial information was $30.4 million for the twelve months ended November 30, 2022.

 

The total consideration of $5.0 million was preliminarily allocated to the identifiable assets acquired and liabilities assumed based on our preliminary estimates of their fair values on the acquisition date, including: goodwill of $1.7 million (deductible for income tax purposes), trademarks of $0.8 million (indefinite life), customer lists of $0.8 million (3-year life), inventory of $1.3 million, and equipment of $0.4 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, revisions of useful lives of intangible assets, and the determination of any residual amount that will be allocated to goodwill.

 

Operating results of the Things Remembered business are reflected in the Company’s consolidated financial statements from the date of acquisition within the Consumer Floral & Gifts segment. Pro forma results of operations have not been presented, as the impact on the Company’s consolidated financial results was not material.

 

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Table of Contents
 
 

Note 4 – Inventory, Net

 

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:

 

   

October 1, 2023

    

July 2, 2023

  
   

(in thousands)

  

Finished goods

   $ 160,087     $ 92,582  

Work-in-process

     31,265       33,818  

Raw materials

     89,269       64,934  

Total inventory

   $ 280,621     $ 191,334  

 
 

Note 5 – Goodwill and Intangible Assets, Net

 

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

 

  

Consumer

Floral &

Gifts

  

BloomNet

  

Gourmet

Foods &

Gift
Baskets

  

Total

 
  

(in thousands)

 

Balance at July 2, 2023 and October 1, 2023

 $153,376  $-  $-  $153,376 

 

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

 

             

October 1, 2023

    

July 2, 2023

  
   

Amortization

Period

    

Gross

Carrying

Amount

    

Accumulated
Amortization

    

Net

    

Gross

Carrying

Amount

    

Accumulated
Amortization

    

Net

  
   

(in years)

    

(in thousands)

 

Intangible assets with determinable lives

                                                          

Investment in licenses

   14 - 16     $ 7,420     $ 6,595     $ 825     $ 7,420     $ 6,569     $ 851  

Customer lists

   3 - 10       29,071       22,685       6,386       29,071       21,611       7,460  

Other

   5 - 14       2,946       2,619       327       2,946       2,604       342  

Total intangible assets with determinable lives

               39,437       31,899       7,538       39,437       30,784       8,653  

Trademarks with indefinite lives

               131,235       -       131,235       131,235       -       131,235  

Total identifiable intangible assets

             $ 170,672     $ 31,899     $ 138,773     $ 170,672     $ 30,784     $ 139,888  

 

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Future estimated amortization expense is as follows: remainder of fiscal 2024 - $3.3 million, fiscal 2025 - $1.9 million, fiscal 2026 - $1.3 million, fiscal 2027 - $0.5 million, fiscal 2028 - $0.2 million and thereafter - $0.3 million.

 

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Table of Contents
 
 

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 equity investments without a readily determinable fair value was $2.6 million as of October 1, 2023 and July 2, 2023, 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). 

 

 

Note 7 –Debt, Net

 

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

 

  

October 1, 2023

  

July 2, 2023

 
  

(in thousands)

 

Revolver

 $35,000  $- 

Term Loans

  197,500   200,000 

Deferred financing costs

  (3,429

)

  (3,609

)

Total debt

  229,071   196,391 

Less: current debt

  45,000   10,000 

Long-term debt

 $184,071  $186,391 

 

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 amends and restates 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) increases the amount of the outstanding term loan (“Term Loan”) from approximately $150 million to $200 million, (ii) decreases the amount of the commitments in respect of the revolving credit facility from $250 million 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) extends the maturity date of the outstanding term loan and the revolving credit facilities by approximately 48 months to June 27, 2028, and (iv) increases 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 plus an applicable margin varying based on the Company’s consolidated leverage ratio. The adjusted SOFR rate includes a credit spread adjustment of 0.10% 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 October 1, 2023. The Third Amended Credit Agreement is secured by substantially all of the assets of the Company.

 

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Table of Contents
 

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 2024, $10.0 million – Fiscal 2025, $20.0 million – Fiscal 2026, $20.0 million – Fiscal 2027, and $140.0 million – Fiscal 2028.
 

Note 8 - Property, Plant and Equipment

 

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

 

   

October 1, 2023

    

July 2, 2023

  
   

(in thousands)

  

Land

   $ 33,866     $ 33,866  

Orchards in production and land improvements

     20,509       20,401  

Building and building improvements

     68,344       67,647  

Leasehold improvements

     29,677       29,524  

Production equipment

     126,529       125,297  

Furniture and fixtures

     9,149       9,102  

Computer and telecommunication equipment

     42,622       41,859  

Software

     185,001       181,085  

Capital projects in progress

     18,264       18,205  

Property, plant and equipment, gross

     533,961       526,986  

Accumulated depreciation and amortization

     (304,768

)

     (292,417

)

Property, plant and equipment, net

   $ 229,193     $ 234,569  
 

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.

 

9
Table of Contents
 

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

 

  

Carrying

Value

  

Fair Value Measurements

Assets (Liabilities)

 
      

Level 1

  

Level 2

  

Level 3

 
  

(in thousands)

 

As of October 1, 2023:

                

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

 $23,803  $23,803  $-  $- 

Total assets (liabilities) at fair value

 $23,803  $23,803  $-  $- 
                 

As of July 2, 2023:

                

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

 $22,617  $22,617  $-  $- 

Total assets (liabilities) at fair value

 $22,617  $22,617  $-  $- 

 

 

(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 October 1, 2023 was 24.8% compared to 25.3% in the same period of the prior year. The Company’s effective tax rate for the three months ended October 1, 2023 and October 2, 2022 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes and non-deductible executive compensation, partially offset by tax credits and other items.

 

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various foreign countries. The Company’s fiscal years 2020, 2021, and 2022 remain subject to U.S. federal examination. Due to ongoing state examinations and nonconformity with the U.S. federal statute of limitations for assessment, certain states remain open from fiscal 2016. 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 October 1, 2023, the Company has an unrecognized tax benefit, including accrued interest and penalties, of approximately $1.6 million. The Company believes that $0.1 million of unrecognized tax positions will be resolved over the next twelve months. 

 

10
Table of Contents
 
 

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

 
  

October 1,

2023

  

October 2,

2022

 

Net Revenues:

 

(in thousands)

 

Segment Net Revenues:

        

Consumer Floral & Gifts

 $142,194  $162,180 

BloomNet

  28,870   33,367 

Gourmet Foods & Gift Baskets

  98,109   108,228 

Corporate

  270   44 

Intercompany eliminations

  (393

)

  (215

)

Total net revenues

 $269,050  $303,604 
         

Operating Income (Loss):

        

Segment Contribution Margin:

        

Consumer Floral & Gifts

 $8,826  $10,810 

BloomNet

  9,387   9,517 

Gourmet Foods & Gift Baskets

  (11,028

)

  (18,710

)

Segment Contribution Margin Subtotal

  7,185   1,617 

Corporate (a)

  (31,568

)

  (30,283

)

Depreciation and amortization

  (13,194

)

  (12,694

)

Operating income (loss)

 $(37,577

)

 $(41,360

)

 

(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.

 

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

 

   

Three Months Ended

  
   

Consumer Floral &
Gifts

    

BloomNet

   

Gourmet Foods &

Gift
Baskets

    

Corporate and

Eliminations

    

Consolidated

  
   

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

  

Net revenues

                                                                                

E-commerce

   $ 140,335     $ 160,382     $ -     $ -     $ 69,576     $ 78,540     $ -     $ -     $ 209,911     $ 238,922  

Other

     1,859       1,798       28,870       33,367       28,533       29,688       (123

)

     (171

)

     59,139       64,682  

Total net revenues

   $ 142,194     $ 162,180     $ 28,870     $ 33,367     $ 98,109     $ 108,228     $ (123

)

   $ (171

)

   $ 269,050     $ 303,604  
                                                                                 

Other revenues detail

                                                                          

Retail and other

     1,859       1,798       -       -       1,934       1,907       -       -       3,793       3,705  

Wholesale

     -       -       11,797       13,622       26,599       27,781       -       -       38,396       41,403  

BloomNet services

     -       -       17,073       19,745       -       -       -       -       17,073       19,745  

Corporate

     -       -       -       -       -       -       270       44       270       44  

Eliminations

     -       -       -       -       -       -       (393

)

     (215

)

     (393

)

     (215

)

Total other revenues

   $ 1,859     $ 1,798     $ 28,870     $ 33,367     $ 28,533     $ 29,688     $ (123

)

   $ (171

)

   $ 59,139     $ 64,682  
 

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 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.

 

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Additional information related to our leases is as follows:

 

   

Three Months Ended

 
   

October 1, 2023

    

October 2, 2022

  
   

(in thousands)

  

Lease costs:

                

Operating lease costs

   $ 5,622     $ 5,347  

Variable lease costs

     6,514       5,851  

Short-term lease cost

     883       1,565  

Sublease income

     (251

)

     (243

)

Total lease costs

   $ 12,768     $ 12,520  
                 

Cash paid for amounts included in measurement of operating lease liabilities

   $ 5,638       4,481  

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

   $ 91       9,985  

 

   

October 1, 2023

  
   

(in thousands)

  

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

     8.5  

Weighted-discount rate - operating leases

     4.0

%

 

Maturities of lease liabilities in accordance with ASC 842 as of October 1, 2023 and reconciliation to balance sheet are as follows (in thousands):

 

Fiscal Year:        

Remainder of 2024

   $ 15,169  

2025

     20,394  

2026

     18,409  

2027

     16,784  

2028

     15,862  

Thereafter

     67,096  

Total Future Minimum Lease Payments

     153,714  

Less: Imputed Remaining Interest

     24,856  

Total Operating Lease Liabilities

     128,858  

Less: Current portion of long-term operating lease liabilities

     15,580  

Long-term operating lease liabilities

   $ 113,278  
 

Note 13 - Accrued Expenses

 

Accrued expenses consisted of the following:

 

  

October 1, 2023

  

July 2, 2023

 
  

(in thousands)

 

Payroll and employee benefits

 $27,260  $33,927 

Deferred revenue

  29,697   30,811 

Accrued marketing expenses

  11,564   13,679 

Accrued florist payout

  13,824   13,437 

Accrued purchases

  28,573   18,351 

Other

  31,777   31,709 

Accrued Expenses

 $142,695  $141,914 

 

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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 year ended July 2, 2023. 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 year ended July 2, 2023 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 an 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®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge across our portfolio of brands, 1-800-FLOWERS.COM, Inc. 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 members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; and Alice’s Table®, a lifestyle business offering fully digital on demand floral, culinary and other experiences to guests across the country.

 

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 year ended July 2, 2023. 

 

Macro-economic Conditions

 

Overall, broader macro-economic conditions continue to impact our consumers as they continue to moderate their discretionary income. Consumers remain pressured by persistent inflation, higher interest rates, and more recently, the resumption of student loan repayments. Our fiscal first quarter is comprised of everyday or just-because gift giving occasions, which has been challenged as consumers reduced their discretionary spending in response to the macro environment. Based on this, we expected our sales to be the most challenged during the first quarter of fiscal 2024, as there are no major holiday occasions during the quarter. In line with this, total consolidated revenues in the first quarter of fiscal 2024 decreased 11.4% to $269.1 million, compared with total consolidated revenues of $303.6 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.

 

The challenging macro-economic conditions that have affected our customers have also impacted our operating costs. During the second quarter of fiscal 2022, in-bound and out-bound shipping, commodity, labor and fuel costs began to surge, and escalated throughout the balance of the year and into fiscal 2023. During our second quarter and third quarter of fiscal 2023, while certain commodity prices remained near historical highs, we began to see a more stable labor market, and significant year-over-year reductions in ocean freight costs. As a result of these trends, combined with our strategic pricing initiatives, automation efforts, and other internal management initiatives, we started to see year-over-year improvement in gross margin commencing in the second quarter of fiscal 2023. These trends and initiatives continued into fiscal 2024 and we saw a significant improvement in year-over-year gross margin in the first quarter of fiscal 2024. This improvement and a reduction of expenses helped to offset the aforementioned year-over-year decline in sales.

 

Acquisition of Things Remembered

 

On January 10, 2023, the Company completed its acquisition of certain assets of the Things Remembered brand, a provider of personalized gifts, whose operations have been integrated within the PersonalizationMall.com brand, in the Consumer Floral & Gifts segment. The Company used cash on hand to fund the $5.0 million purchase, which included intellectual property, customer list, certain inventory, and equipment - see Note 3 –Acquisitions in Item 1. 

 

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Table of Contents

 

Amended and Restated Credit Agreement

 

On June 27, 2023, the Company entered into a Third Amended and Restated Credit Agreement to, among other modifications, (i) increase the amount of the outstanding term loan from approximately $150 million to $200 million, (ii) decrease the amount of the commitments in respect of the revolving credit facility from $250 million 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) extend the maturity date of the outstanding term loan and the revolving credit facilities by approximately 48 months to June 27, 2028, and (iv) increase the applicable interest rate margins for SOFR and base rate loans by 25 basis points (See Note 7 - Debt, in Item 1, for details).

 

Company Guidance

 

For Fiscal 2024, the Company continues to expect revenues to remain pressured by a challenging consumer environment, but year-over-year trends to continue to improve during the holiday period and into the second half of the fiscal year. The Company also expects continued improvement in gross margin.  

 

As a result, the Company expects Fiscal 2024:

 

●

Total revenues on a percentage basis to decline in the mid-single digits, as compared with the prior year;
 

●

Adjusted EBITDA to be in a range of $95 million to $100 million; and
 

●

Free Cash Flow to be in a range of $60 million to $65 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.  Where applicable, see the Segment Information and Results of Operations sections below for reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. These non-GAAP financial measures are referred to as “non-GAAP” or “adjusted” 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 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.

 

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. See Segment Information for details on how EBITDA and adjusted EBITDA were calculated for each period presented.

 

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 should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

 

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Table of Contents

 

Segment contribution margin 

 

We define segment contribution margin as earnings before interest, taxes, depreciation and amortization, before the allocation of corporate overhead expenses. See Segment Information for details on how segment contribution margin was calculated for each period presented.

 

When viewed together with our GAAP results, we believe segment contribution margin provides management and users of the financial statements meaningful information about the performance of our business segments.

 

Segment contribution margin is 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 is that it is 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. 

 

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.

 

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Table of Contents

 

Segment Information

 

The following table presents the net revenues, gross profit and segment contribution margin from each of the Company’s business segments, as well as consolidated EBITDA, and adjusted EBITDA.

 

   

Three Months Ended

 

  
   

October 1,
2023

    

October 2,
2022

    

%
Change

  

Net revenues:

                        

Consumer Floral & Gifts

   $ 142,194     $ 162,180       -12.3

%

BloomNet

     28,870       33,367       -13.5

%

Gourmet Foods & Gift Baskets

     98,109       108,228       -9.3

%

Corporate

     270       44       513.6

%

Intercompany eliminations

     (393

)

     (215

)

     -82.8

%

Total net revenues

   $ 269,050     $ 303,604       -11.4

%
                         

Gross profit:

                        

Consumer Floral & Gifts

   $ 56,322     $ 61,919       -9.0

%
      39.6

%

     38.2

%

        
                         

BloomNet

     14,498       14,487       0.1

%
      50.2

%

     43.4

%

        
                         

Gourmet Foods & Gift Baskets

     30,907       25,113       23.1

%
      31.5

%

     23.2

%

        
                         

Corporate

     201       (61

)

     429.5

%
      74.4

%

     -138.6

%

        
                         

Total gross profit

   $ 101,928     $ 101,458       0.5

%
      37.9

%

     33.4

%

        
                         

EBITDA (non-GAAP):

                        

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

                       

Consumer Floral & Gifts

   $ 8,826     $ 10,810       -18.4

%

BloomNet

     9,387       9,517       -1.4

%

Gourmet Foods & Gift Baskets

     (11,028

)

     (18,710

)

     41.1

%

Segment Contribution Margin Subtotal

     7,185       1,617       344.3

%

Corporate (b)

     (31,568

)

     (30,283

)

     -4.2

%

EBITDA (non-GAAP)

     (24,383

)

     (28,666

)

     14.9

%

Add: Stock-based compensation

     2,364       1,555       52.0

%

Add: Compensation charge related to NQDC Plan Investment Depreciation

     (504

)

     (906

)

     44.4

%

Adjusted EBITDA (non-GAAP)

   $ (22,523

)

   $ (28,017

)

     19.6

%

 

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Table of Contents

 

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

  

Three Months Ended

  
   

October 1,

2023

    

October 2,

2022

  
                 

Net loss

   $ (31,242

)

   $ (33,692

)

Add: Interest expense and other, net

     3,956       3,743  

Add: Depreciation and amortization

     13,194       12,694  

Add: Income tax benefit

     (10,291

)

     (11,411

)

EBITDA

     (24,383

)

     (28,666

)

Add: Stock-based compensation

     2,364       1,555  

Add: Compensation charge related to NQDC Plan Investment Depreciation

     (504

)

     (906

)

Adjusted EBITDA

   $ (22,523

)

   $ (28,017

)

 

(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, 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.

 

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Results of Operations

 

Net revenues

 

   

Three Months Ended

  
   

October 1,
2023

    

October 2,
2022

    

% Change

  
   

(dollars in thousands)

  

Net revenues:

                        

E-Commerce

   $ 209,911     $ 238,922       -12.1

%

Other

     59,139       64,682       -8.6

%

Total net revenues

   $ 269,050     $ 303,604       -11.4

%

 

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

 

Net revenues decreased 11.4% during the three months ended October 1, 2023 compared to the same period of the prior year, due to lower order volume across all 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 on purchases for “Everyday” gifting occasions. Contributing to this decline was the prudent use of promotional offerings and advertising campaigns, which balance the long-term goals of the Company with strategies to improve gross margins and tightly control operating expenses during this challenging economic environment.

 

The Company acquired Things Remembered on January 10, 2023 and launched the brand on its e-commerce platform in April 2023. Things Remembered revenues were not significant during the three months ended October 1, 2023.

 

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Table of Contents

 

   

Three Months Ended

  
   

Consumer Floral & Gifts

    

BloomNet

    

Gourmet Foods & Gift Baskets

    

Corporate and Eliminations

    

Consolidated

  
   

October 1, 2023

    

October 2, 2022

    

% Change

    

October 1, 2023

    

October 2, 2022

    

% Change

    

October 1, 2023

    

October 2, 2022

    

% Change

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

% Change

  

Net revenues

                                                                                                          

E-commerce

   $ 140,335     $ 160,382       -12.5

%

   $ -     $ -       -

%

   $ 69,576     $ 78,540       -11.4

%

   $ -     $ -     $ 209,911     $ 238,922       -12.1

%

Other

     1,859       1,798       3.4

%

     28,870       33,367       -13.5

%

     28,533       29,688       -3.9

%

     (123

)

     (171

)

     59,139       64,682       -8.6

%

Total net revenues

   $ 142,194     $ 162,180       -12.3

%

   $ 28,870     $ 33,367       -13.5

%

   $ 98,109     $ 108,228       -9.3

%

   $ (123

)

   $ (171

)

   $ 269,050     $ 303,604       -11.4

%
                                                                                                                 

Other revenues detail

                                                                                                          

Retail and other

     1,859       1,798       3.4

%

     -       -       -       1,934       1,907       1.4

%

     -       -       3,793       3,705       2.4

%

Wholesale

     -       -       -       11,797       13,622       -13.4

%

     26,599       27,781       -4.3

%

     -       -       38,396       41,403       -7.3

%

BloomNet services

     -       -       -       17,073       19,745       -13.5

%

     -       -       -       -       -       17,073       19,745       -13.5

%

Corporate

     -       -       -       -       -       -       -       -       -       270       44       270       44       513.6

%

Eliminations

     -       -       -       -       -       -       -       -       -       (393

)

     (215

)

     (393

)

     (215

)

     -82.8

%

Total other revenues

   $ 1,859       1,798       3.4

%

   $ 28,870     $ 33,367       -13.5

%

   $ 28,533     $ 29,688       -3.9

%

   $ (123

)

   $ (171

)

   $ 59,139       64,682       -8.6

%

 

21
Table of Contents

 

Revenue by sales channel:

 

E-commerce revenues (combined online and telephonic) decreased 12.1% during the three months ended October 1, 2023, compared to the same period of the prior year, primarily as a result of the decline in demand for “Everyday” gifts across all our segments, as a result of the macro-economic conditions noted above, which have negatively impacted consumer discretionary spending, combined with planned reductions in advertising spend.

 

During the three months ended October 1, 2023, the Company fulfilled approximately 2.6 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of 16.1% compared to the same period of the prior year. During the three months ended October 1, 2023, average order value increased 4.8%, to $79.46, as a result of strategic price increases, and product mix into higher price point items.

 

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 October 1, 2023, decreased 8.6%, compared with the same period of the prior year, due to slightly lower wholesale volumes within the Gourmet Foods & Gift Baskets segment, 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, and Alice’s Table brands, and the Things Remembered brand, subsequent to its acquisition on January 10, 2023, 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 12.3% during the three months ended October 1, 2023 compared to the same period of the prior year, due to the continued reduction of “Everyday” product demand, as consumers’ available discretionary income continues to shrink in the current inflationary environment, which was combined with planned reductions in advertising spend, as the brands focused their efforts on improving gross margin and operating spend efficiency, in the face of softening demand.

 

During the three months ended October 1, 2023, Consumer Floral & Gifts orders through its e-commerce sales channel (online and telephonic sales) decreased 16.0% compared to the same period of the prior year, however this was partially offset by an increase in average order value of 4.2%, as a result of strategic price increases and product mix into higher price point items.

 

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

 

Net revenues decreased 13.5% during the three months ended October 1, 2023, 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.

 

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, and Vital Choice. 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 brand names, as well as wholesale operations.

 

Net revenues within this segment decreased 9.3% during the three months ended October 1, 2023 compared to the same period of the prior year, as a result of lower e-commerce and wholesale revenues, primarily due to macro-economic weakness, which has significantly reduced “Everyday” occasion volumes, combined with planned reductions in advertising spend, as the brands focused their efforts on improving gross margin and operating spend efficiency in the face of softening demand.

 

During the three months ended October 1, 2023, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 16.3% compared to the same period of the prior year, however this was partially offset by an increase in average order value of 5.9%, as a result of strategic price increases and product mix into higher price point items.

 

22
Table of Contents

 

Gross profit

 

   

Three Months Ended

  
   

October 1, 2023

    

October 2, 2022

    

% Change

  
   

(dollars in thousands)

  
                         

Gross profit

   $ 101,928     $ 101,458       0.5

%

Gross profit %

     37.9

%

     33.4

%

        

 

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 increased 0.5% during the three months ended October 1, 2023 compared to the same period of the prior year, primarily due to a favorable gross profit percentage, principally offset by lower revenues noted above.

 

Gross profit percentage increased 450 basis points during the three months ended October 1, 2023, compared to the same period of the prior year, driven by lower ocean freight costs, strategic pricing initiatives, a decline in certain commodity costs, and better inventory management.

 

Gross profit by segment follows:

 

Consumer Floral & Gifts segment - Gross profit decreased by 9.0% during the three months ended October 1, 2023 due to the impact of the lower revenues noted above, partially offset by favorable gross profit percentage attributable to strategic pricing initiatives and lower ocean freight costs.

 

BloomNet segment - Gross profit increased by 0.1% during the three months ended October 1, 2023, compared to the same period of the prior year, due to an improved gross profit percentage, partially offset by the decrease in revenues noted above. Gross profit percentage increased in comparison to the prior year primarily due to strategic pricing initiatives, lower ocean freight costs and product mix.

 

Gourmet Foods & Gift Baskets segment – Gross profit increased by 23.1% during the three months ended October 1, 2023, compared to the same period of the prior year, primarily due to an improved gross profit percentage, partially offset by the revenue decrease noted above. The increased gross profit percentage was attributable to lower ocean freight costs, a decline in certain commodity prices, strategic pricing initiatives, and better inventory management.

 

23
Table of Contents

 

Marketing and sales expense

 

   

Three Months Ended

  
   

October 1, 2023

    

October 2, 2022

    

% Change

  
   

(dollars in thousands)

  
                         

Marketing and sales

   $ 82,518     $ 89,139       -7.4

%

Percentage of net revenues

     30.7

%

     29.4

%

        

 

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 7.4% during the three months ended October 1, 2023 compared to the same period of the prior year, due to variable components associated with lower revenues, combined with planned reductions in advertising spend focused on driving profitable volume during a period when discretionary purchases are under pressure.

 

Technology and development expense

 

   

Three Months Ended

  
   

October 1, 2023

    

October 2, 2022

    

% Change

  
   

(dollars in thousands)

  
                         

Technology and development

   $ 15,304     $ 14,740       3.8

%

Percentage of net revenues

     5.7

%

     4.9

%

        

 

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 3.8% during the three months ended October 1, 2023 compared to the same period of the prior year, primarily due to higher maintenance and support costs for the Company’s technology platform enhancements.

 

General and administrative expense

 

   

Three Months Ended

  
   

October 1, 2023

    

October 2, 2022

    

% Change

  
   

(dollars in thousands)

  
                         

General and administrative

   $ 28,489     $ 26,245       8.6

%

Percentage of net revenues

     10.6

%

     8.6

%

        

 

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 increased 8.6%, during the three months ended October 1, 2023, compared to the same period of the prior year, due to increases in labor and insurance related costs, partially offset by lower professional fees.

 

24
Table of Contents

 

Depreciation and amortization expense

 

   

Three Months Ended

  
   

October 1, 2023

    

October 2, 2022

    

% Change

  
   

(dollars in thousands)

  
                         

Depreciation and amortization

   $ 13,194     $ 12,694       3.9

%

Percentage of net revenues

     4.9

%

     4.2

%

        

 

Depreciation and amortization expense increased 3.9% during the three months ended October 1, 2023 compared to the same period of the prior year, due to distribution facility automation projects and IT related ecommerce/platform enhancements.

 

Interest expense, net

 

   

Three Months Ended

  
   

October 1, 2023

    

October 2, 2022

    

% Change

  
   

(dollars in thousands)

  
                         

Interest expense, net

   $ 3,482     $ 2,821       23.4

%

 

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, in Item 1. for details), net of income earned on the Company’s available cash balances.

 

Interest expense, net increased 23.4% during the three months ended October 1, 2023 compared to the same period of the prior year, primarily due to higher interest rates, partially offset by a lower level of total borrowings.

 

Other expense (income), net

 

   

Three Months Ended

  
   

October 1, 2023

    

October 2, 2022

    

% Change

  
   

(dollars in thousands)

  
                         

Other expense, net

   $ 474     $ 922       -48.6

%

 

Other expense consists primarily of investment losses on the Company’s NQDC Plan Investments. 

 

25
Table of Contents

 

Income Taxes

 

The Company recorded income tax benefit of $10.3 million during the three months ended October 1, 2023 compared to an income tax benefit of $11.4 million during the three months ended October 2, 2022. The Company’s effective tax rate for the three months ended October 1, 2023 was 24.8% compared to 25.3% in the same period of the prior year. The Company’s effective tax rate for the three months ended October 1, 2023 and October 2, 2022, differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes and non-deductible executive compensation, partially offset by tax credits and other items.

 

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 in Item 1 for details). At October 1, 2023, the Company had working capital of $127.5 million, including cash and cash equivalents of $8.4 million, compared to working capital of $152.9 million, including cash and cash equivalents of $126.8 million, at July 2, 2023. 

 

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 October 1, 2023, the Company had $35.0 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 $143.9 million, for the three months ended October 1, 2023, 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 $7.0 million, for the three months ended October 1, 2023, was attributable to capital expenditures primarily related to the Company's technology and automation initiatives.

 

Net cash provided by financing activities of $32.4 million, for the three months ended October 1, 2023, related primarily to net proceeds from bank borrowings under the Company’s working capital line of credit.

 

26
Table of Contents

 

Stock Repurchase Program

 

See Item 2 in Part II below for details.

 

Contractual Obligations

 

At October 1, 2023, the Company’s contractual obligations consist of:

 

●

Long-term debt obligations - payments due under the Company's credit agreement (see Note 7 - Debt 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

2024

    

Fiscal

2025

    

Fiscal

2026

    

Fiscal

2027

    

Fiscal

2028

    

Thereafter

    

Total

  

Purchase commitments

   $ 98,772     $ 9,974     $ 2,549     $ 175     $ -     $ -     $ 111,470  

 

Critical Accounting Estimates

 

As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended July 2, 2023, 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 July 2, 2023.

 

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.

 

27
Table of Contents

 

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,” “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; and
 

o 

to address the effects of changes in accounting policies, practices, or assumptions, including changes that could potentially require future impairment charges;

 

●

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 July 2, 2023 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.

 

28
Table of Contents

 

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 $0.3 million during the three months ended October 1, 2023.

 

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 October 1, 2023. 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 October 1, 2023.

 

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 October 1, 2023, 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.

 

29
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 year ended July 2, 2023.

 

30
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 October 1, 2023, $31.9 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 2024, which includes the period July 3, 2023 through October 1, 2023:

 

Period

  

Total

Number of

Shares

Purchased

    

Average

Price

Paid Per

Share (1)

    

Total

Number of

Shares

Purchased

as Part of

Publicly

Announced

Plans or

Programs

    

Dollar

Value of

Shares

that May

Yet Be

Purchased

Under the

Plans or

Programs

  
   

(in thousands, except average price paid per share)

          
                                 

07/03/23 – 07/30/23

     -     $ -       -     $ 31,965  

07/31/23 – 08/27/23

     -     $ -       -     $ 31,965  

08/28/23 – 10/01/23

     10,483     $ 7.08       10,483     $ 31,890  

Total

     10,483     $ 7.08       10,483          

 

(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

 

None.

 

 

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.

 

31
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 13, 2023     

/s/ James F. McCann      

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

Date: November 13, 2023     

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

 

32

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 13, 2023     

/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 13, 2023     

/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 October 1, 2023, 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 13, 2023     

/s/ James F. McCann
 

James F. McCann

Executive Chairman and Chief Executive Officer
   

Dated: November 13, 2023     

/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.

 

 
v3.23.3
Document And Entity Information - shares
 3 Months Ended
Oct. 01, 2023
Nov. 03, 2023
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 --06-30  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2024  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Oct. 01, 2023  
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   37,829,997
v3.23.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Oct. 01, 2023
Jul. 02, 2023
Current assets:    
Cash and cash equivalents $ 8,375 $ 126,807
Trade receivables, net 44,239 20,419
Inventories 280,621 191,334
Prepaid and other 49,347 34,583
Total current assets 382,582 373,143
Property, plant and equipment, net 229,193 234,569
Operating lease right-of-use assets 120,499 124,715
Goodwill 153,376 153,376
Other intangibles, net 138,773 139,888
Other assets 26,925 25,739
Total assets 1,051,348 1,051,430
Current liabilities:    
Accounts payable 51,764 52,588
Accrued expenses 142,695 141,914
Current maturities of long-term debt 45,000 10,000
Current portion of long-term operating lease liabilities 15,580 15,759
Total current liabilities 255,039 220,261
Long-term debt, net 184,071 186,391
Long-term operating lease liabilities 113,278 117,330
Deferred tax liabilities, net 30,555 31,134
Other liabilities 25,514 24,471
Total liabilities 608,457 579,587
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 390,579 388,215
Retained earnings 239,841 271,083
Accumulated other comprehensive loss (170) (170)
Treasury stock, at cost, 20,576,358 and 20,565,875 Class A shares at October 1, 2023 and July 2, 2023, respectively and 5,280,000 Class B shares at October 1, 2023 and July 2, 2023 (188,265) (188,191)
Total stockholders’ equity 442,891 471,843
Total liabilities and stockholders’ equity 1,051,348 1,051,430
Common Class A [Member]    
Stockholders' equity:    
Common stock 583 583
Common Class B [Member]    
Stockholders' equity:    
Common stock $ 323 $ 323
v3.23.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Oct. 01, 2023
Jul. 02, 2023
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) 58,309,547 58,273,747
Treasury stock, shares (in shares) 20,576,358 20,565,875
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
v3.23.3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Oct. 01, 2023
Oct. 02, 2022
Net revenues $ 269,050 $ 303,604
Cost of revenues 167,122 202,146
Gross profit 101,928 101,458
Operating expenses:    
Marketing and sales 82,518 89,139
Technology and development 15,304 14,740
General and administrative 28,489 26,245
Depreciation and amortization 13,194 12,694
Total operating expenses 139,505 142,818
Operating loss (37,577) (41,360)
Interest expense, net 3,482 2,821
Other expense, net 474 922
Loss before income taxes (41,533) (45,103)
Income tax benefit (10,291) (11,411)
Net loss and comprehensive net loss $ (31,242) $ (33,692)
Basic and diluted net loss per common share (in dollars per share) $ (0.48) $ (0.52)
Basic and diluted weighted average shares used in the calculation of net loss per common share (in shares) 64,785 64,538
v3.23.3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
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. 03, 2022 57,706,389 32,529,614       25,698,396  
Balance at Jul. 03, 2022 $ 577 $ 325 $ 379,885 $ 315,785 $ (211) $ (186,952) $ 509,409
Net loss $ 0 $ 0 0 (33,692) 0 $ 0 (33,692)
Stock-based compensation (in shares) 0 0       0  
Stock-based compensation $ 0 $ 0 1,555 0 0 $ 0 1,555
Balance (in shares) at Oct. 02, 2022 57,706,389 32,529,614       25,698,396  
Balance at Oct. 02, 2022 $ 577 $ 325 381,440 282,093 (211) $ (186,952) 477,272
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 (in shares) 0 0       10,483  
Acquisition of Class A treasury stock $ 0 $ 0 0 0 0 $ (74) (74)
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
v3.23.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 01, 2023
Oct. 02, 2022
Operating activities:    
Net loss $ (31,242) $ (33,692)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 13,194 12,694
Amortization of deferred financing costs 180 345
Deferred income taxes (579) (381)
Bad debt expense 586 265
Stock-based compensation 2,364 1,555
Other non-cash items 270 326
Changes in operating items:    
Trade receivables (24,407) (25,416)
Inventories (89,287) (95,038)
Prepaid and other (14,764) (19,425)
Accounts payable and accrued expenses (42) 11,742
Other assets and liabilities (157) 702
Net cash used in operating activities (143,884) (146,323)
Investing activities:    
Capital expenditures (6,974) (11,033)
Net cash used in investing activities (6,974) (11,033)
Financing activities:    
Acquisition of treasury stock (74) 0
Proceeds from bank borrowings 35,000 140,000
Repayment of bank borrowings (2,500) (5,000)
Debt issuance cost 0 (333)
Net cash provided by financing activities 32,426 135,333
Net change in cash and cash equivalents (118,432) (22,023)
Cash and cash equivalents:    
Beginning of period 126,807 31,465
End of period $ 8,375 $ 9,442
v3.23.3
Note 1 - Accounting Policies
 3 Months Ended
Oct. 01, 2023
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-month period ended October 1, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2024. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended July 2, 2023, 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 July 2, 2023 was $30.8 million (included in “Accrued expenses” on our consolidated balance sheets), of which $16.1 million was recognized as revenue during the three months ended October 1, 2023. The deferred revenue balance as of October 1, 2023 was $29.7 million.  

 

Recently Issued Accounting Pronouncements

 

The Company does not expect that any recently issued accounting pronouncements will have a material effect on its consolidated financial statements.
v3.23.3
Note 2 - Net Income (Loss) Per Common Share
 3 Months Ended
Oct. 01, 2023
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 October 1, 2023 and October 2, 2022, there is no dilutive impact to the net loss per share calculation for the respective periods.
v3.23.3
Note 3 - Acquisitions
 3 Months Ended
Oct. 01, 2023
Notes to Financial Statements  
Mergers, Acquisitions and Dispositions Disclosures [Text Block]

Note 3 – Acquisitions

 

Acquisition of Things Remembered

 

On January 10, 2023, the Company completed its acquisition of certain assets of the Things Remembered brand, a provider of personalized gifts, whose operations are integrated within the PersonalizationMall.com brand, in the Consumer Floral & Gifts segment. The Company used cash on hand to fund the $5.0 million purchase, which included the intellectual property, customer list, certain inventory, and equipment. The acquisition did not include Things Remembered retail stores. Things Remembered’s annual revenues from its e-commerce operations, based on its most recently available unaudited financial information was $30.4 million for the twelve months ended November 30, 2022.

 

The total consideration of $5.0 million was preliminarily allocated to the identifiable assets acquired and liabilities assumed based on our preliminary estimates of their fair values on the acquisition date, including: goodwill of $1.7 million (deductible for income tax purposes), trademarks of $0.8 million (indefinite life), customer lists of $0.8 million (3-year life), inventory of $1.3 million, and equipment of $0.4 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, revisions of useful lives of intangible assets, and the determination of any residual amount that will be allocated to goodwill.

 

Operating results of the Things Remembered business are reflected in the Company’s consolidated financial statements from the date of acquisition within the Consumer Floral & Gifts segment. Pro forma results of operations have not been presented, as the impact on the Company’s consolidated financial results was not material.

 
v3.23.3
Note 4 - Inventory
 3 Months Ended
Oct. 01, 2023
Notes to Financial Statements  
Inventory Disclosure [Text Block]

Note 4 – Inventory, Net

 

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:

 

   

October 1, 2023

    

July 2, 2023

  
   

(in thousands)

  

Finished goods

   $ 160,087     $ 92,582  

Work-in-process

     31,265       33,818  

Raw materials

     89,269       64,934  

Total inventory

   $ 280,621     $ 191,334  

 
v3.23.3
Note 5 - Goodwill and Intangible Assets
 3 Months Ended
Oct. 01, 2023
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:

 

  

Consumer

Floral &

Gifts

  

BloomNet

  

Gourmet

Foods &

Gift
Baskets

  

Total

 
  

(in thousands)

 

Balance at July 2, 2023 and October 1, 2023

 $153,376  $-  $-  $153,376 

 

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

 

             

October 1, 2023

    

July 2, 2023

  
   

Amortization

Period

    

Gross

Carrying

Amount

    

Accumulated
Amortization

    

Net

    

Gross

Carrying

Amount

    

Accumulated
Amortization

    

Net

  
   

(in years)

    

(in thousands)

 

Intangible assets with determinable lives

                                                          

Investment in licenses

   14 - 16     $ 7,420     $ 6,595     $ 825     $ 7,420     $ 6,569     $ 851  

Customer lists

   3 - 10       29,071       22,685       6,386       29,071       21,611       7,460  

Other

   5 - 14       2,946       2,619       327       2,946       2,604       342  

Total intangible assets with determinable lives

               39,437       31,899       7,538       39,437       30,784       8,653  

Trademarks with indefinite lives

               131,235       -       131,235       131,235       -       131,235  

Total identifiable intangible assets

             $ 170,672     $ 31,899     $ 138,773     $ 170,672     $ 30,784     $ 139,888  

 

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Future estimated amortization expense is as follows: remainder of fiscal 2024 - $3.3 million, fiscal 2025 - $1.9 million, fiscal 2026 - $1.3 million, fiscal 2027 - $0.5 million, fiscal 2028 - $0.2 million and thereafter - $0.3 million.

 
v3.23.3
Note 6 - Investments
 3 Months Ended
Oct. 01, 2023
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 equity investments without a readily determinable fair value was $2.6 million as of October 1, 2023 and July 2, 2023, 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). 
v3.23.3
Note 7 - Debt, Net
 3 Months Ended
Oct. 01, 2023
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 7 –Debt, Net

 

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

 

  

October 1, 2023

  

July 2, 2023

 
  

(in thousands)

 

Revolver

 $35,000  $- 

Term Loans

  197,500   200,000 

Deferred financing costs

  (3,429

)

  (3,609

)

Total debt

  229,071   196,391 

Less: current debt

  45,000   10,000 

Long-term debt

 $184,071  $186,391 

 

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 amends and restates 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) increases the amount of the outstanding term loan (“Term Loan”) from approximately $150 million to $200 million, (ii) decreases the amount of the commitments in respect of the revolving credit facility from $250 million 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) extends the maturity date of the outstanding term loan and the revolving credit facilities by approximately 48 months to June 27, 2028, and (iv) increases 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 plus an applicable margin varying based on the Company’s consolidated leverage ratio. The adjusted SOFR rate includes a credit spread adjustment of 0.10% 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 October 1, 2023. 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 2024, $10.0 million – Fiscal 2025, $20.0 million – Fiscal 2026, $20.0 million – Fiscal 2027, and $140.0 million – Fiscal 2028.
v3.23.3
Note 8 - Property, Plant and Equipment
 3 Months Ended
Oct. 01, 2023
Notes to Financial Statements  
Property, Plant and Equipment Disclosure [Text Block]

Note 8 - Property, Plant and Equipment

 

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

 

   

October 1, 2023

    

July 2, 2023

  
   

(in thousands)

  

Land

   $ 33,866     $ 33,866  

Orchards in production and land improvements

     20,509       20,401  

Building and building improvements

     68,344       67,647  

Leasehold improvements

     29,677       29,524  

Production equipment

     126,529       125,297  

Furniture and fixtures

     9,149       9,102  

Computer and telecommunication equipment

     42,622       41,859  

Software

     185,001       181,085  

Capital projects in progress

     18,264       18,205  

Property, plant and equipment, gross

     533,961       526,986  

Accumulated depreciation and amortization

     (304,768

)

     (292,417

)

Property, plant and equipment, net

   $ 229,193     $ 234,569  
v3.23.3
Note 9 - Fair Value Measurements
 3 Months Ended
Oct. 01, 2023
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

Value

  

Fair Value Measurements

Assets (Liabilities)

 
      

Level 1

  

Level 2

  

Level 3

 
  

(in thousands)

 

As of October 1, 2023:

                

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

 $23,803  $23,803  $-  $- 

Total assets (liabilities) at fair value

 $23,803  $23,803  $-  $- 
                 

As of July 2, 2023:

                

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

 $22,617  $22,617  $-  $- 

Total assets (liabilities) at fair value

 $22,617  $22,617  $-  $- 

 

 

(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. 
v3.23.3
Note 10 - Income Taxes
 3 Months Ended
Oct. 01, 2023
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 October 1, 2023 was 24.8% compared to 25.3% in the same period of the prior year. The Company’s effective tax rate for the three months ended October 1, 2023 and October 2, 2022 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes and non-deductible executive compensation, partially offset by tax credits and other items.

 

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various foreign countries. The Company’s fiscal years 2020, 2021, and 2022 remain subject to U.S. federal examination. Due to ongoing state examinations and nonconformity with the U.S. federal statute of limitations for assessment, certain states remain open from fiscal 2016. 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 October 1, 2023, the Company has an unrecognized tax benefit, including accrued interest and penalties, of approximately $1.6 million. The Company believes that $0.1 million of unrecognized tax positions will be resolved over the next twelve months. 

 
v3.23.3
Note 11 - Business Segments
 3 Months Ended
Oct. 01, 2023
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

 
  

October 1,

2023

  

October 2,

2022

 

Net Revenues:

 

(in thousands)

 

Segment Net Revenues:

        

Consumer Floral & Gifts

 $142,194  $162,180 

BloomNet

  28,870   33,367 

Gourmet Foods & Gift Baskets

  98,109   108,228 

Corporate

  270   44 

Intercompany eliminations

  (393

)

  (215

)

Total net revenues

 $269,050  $303,604 
         

Operating Income (Loss):

        

Segment Contribution Margin:

        

Consumer Floral & Gifts

 $8,826  $10,810 

BloomNet

  9,387   9,517 

Gourmet Foods & Gift Baskets

  (11,028

)

  (18,710

)

Segment Contribution Margin Subtotal

  7,185   1,617 

Corporate (a)

  (31,568

)

  (30,283

)

Depreciation and amortization

  (13,194

)

  (12,694

)

Operating income (loss)

 $(37,577

)

 $(41,360

)

 

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

 

   

Three Months Ended

  
   

Consumer Floral &
Gifts

    

BloomNet

   

Gourmet Foods &

Gift
Baskets

    

Corporate and

Eliminations

    

Consolidated

  
   

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

  

Net revenues

                                                                                

E-commerce

   $ 140,335     $ 160,382     $ -     $ -     $ 69,576     $ 78,540     $ -     $ -     $ 209,911     $ 238,922  

Other

     1,859       1,798       28,870       33,367       28,533       29,688       (123

)

     (171

)

     59,139       64,682  

Total net revenues

   $ 142,194     $ 162,180     $ 28,870     $ 33,367     $ 98,109     $ 108,228     $ (123

)

   $ (171

)

   $ 269,050     $ 303,604  
                                                                                 

Other revenues detail

                                                                          

Retail and other

     1,859       1,798       -       -       1,934       1,907       -       -       3,793       3,705  

Wholesale

     -       -       11,797       13,622       26,599       27,781       -       -       38,396       41,403  

BloomNet services

     -       -       17,073       19,745       -       -       -       -       17,073       19,745  

Corporate

     -       -       -       -       -       -       270       44       270       44  

Eliminations

     -       -       -       -       -       -       (393

)

     (215

)

     (393

)

     (215

)

Total other revenues

   $ 1,859     $ 1,798     $ 28,870     $ 33,367     $ 28,533     $ 29,688     $ (123

)

   $ (171

)

   $ 59,139     $ 64,682  
v3.23.3
Note 12 - Leases
 3 Months Ended
Oct. 01, 2023
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 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

 
   

October 1, 2023

    

October 2, 2022

  
   

(in thousands)

  

Lease costs:

                

Operating lease costs

   $ 5,622     $ 5,347  

Variable lease costs

     6,514       5,851  

Short-term lease cost

     883       1,565  

Sublease income

     (251

)

     (243

)

Total lease costs

   $ 12,768     $ 12,520  
                 

Cash paid for amounts included in measurement of operating lease liabilities

   $ 5,638       4,481  

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

   $ 91       9,985  

 

   

October 1, 2023

  
   

(in thousands)

  

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

     8.5  

Weighted-discount rate - operating leases

     4.0

%

 

Maturities of lease liabilities in accordance with ASC 842 as of October 1, 2023 and reconciliation to balance sheet are as follows (in thousands):

 

Fiscal Year:        

Remainder of 2024

   $ 15,169  

2025

     20,394  

2026

     18,409  

2027

     16,784  

2028

     15,862  

Thereafter

     67,096  

Total Future Minimum Lease Payments

     153,714  

Less: Imputed Remaining Interest

     24,856  

Total Operating Lease Liabilities

     128,858  

Less: Current portion of long-term operating lease liabilities

     15,580  

Long-term operating lease liabilities

   $ 113,278  
v3.23.3
Note 13 - Accrued Expenses
 3 Months Ended
Oct. 01, 2023
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:

 

  

October 1, 2023

  

July 2, 2023

 
  

(in thousands)

 

Payroll and employee benefits

 $27,260  $33,927 

Deferred revenue

  29,697   30,811 

Accrued marketing expenses

  11,564   13,679 

Accrued florist payout

  13,824   13,437 

Accrued purchases

  28,573   18,351 

Other

  31,777   31,709 

Accrued Expenses

 $142,695  $141,914 

 
v3.23.3
Note 14 - Commitments and Contingencies
 3 Months Ended
Oct. 01, 2023
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.

 
v3.23.3
Insider Trading Arrangements
 3 Months Ended
Oct. 01, 2023
Insider Trading Arr Line Items  
Material Terms of Trading Arrangement [Text Block]

ITEM 5. OTHER INFORMATION

 

None.
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
v3.23.3
Significant Accounting Policies (Policies)
 3 Months Ended
Oct. 01, 2023
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-month period ended October 1, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2024. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended July 2, 2023, 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 July 2, 2023 was $30.8 million (included in “Accrued expenses” on our consolidated balance sheets), of which $16.1 million was recognized as revenue during the three months ended October 1, 2023. The deferred revenue balance as of October 1, 2023 was $29.7 million.  

 
New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

 

The Company does not expect that any recently issued accounting pronouncements will have a material effect on its consolidated financial statements.
v3.23.3
Note 4 - Inventory (Tables)
 3 Months Ended
Oct. 01, 2023
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
   

October 1, 2023

    

July 2, 2023

  
   

(in thousands)

  

Finished goods

   $ 160,087     $ 92,582  

Work-in-process

     31,265       33,818  

Raw materials

     89,269       64,934  

Total inventory

   $ 280,621     $ 191,334  
v3.23.3
Note 5 - Goodwill and Intangible Assets (Tables)
 3 Months Ended
Oct. 01, 2023
Notes Tables  
Schedule of Goodwill [Table Text Block]
  

Consumer

Floral &

Gifts

  

BloomNet

  

Gourmet

Foods &

Gift
Baskets

  

Total

 
  

(in thousands)

 

Balance at July 2, 2023 and October 1, 2023

 $153,376  $-  $-  $153,376 
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Table Text Block]
             

October 1, 2023

    

July 2, 2023

  
   

Amortization

Period

    

Gross

Carrying

Amount

    

Accumulated
Amortization

    

Net

    

Gross

Carrying

Amount

    

Accumulated
Amortization

    

Net

  
   

(in years)

    

(in thousands)

 

Intangible assets with determinable lives

                                                          

Investment in licenses

   14 - 16     $ 7,420     $ 6,595     $ 825     $ 7,420     $ 6,569     $ 851  

Customer lists

   3 - 10       29,071       22,685       6,386       29,071       21,611       7,460  

Other

   5 - 14       2,946       2,619       327       2,946       2,604       342  

Total intangible assets with determinable lives

               39,437       31,899       7,538       39,437       30,784       8,653  

Trademarks with indefinite lives

               131,235       -       131,235       131,235       -       131,235  

Total identifiable intangible assets

             $ 170,672     $ 31,899     $ 138,773     $ 170,672     $ 30,784     $ 139,888  
v3.23.3
Note 7 - Debt, Net (Tables)
 3 Months Ended
Oct. 01, 2023
Notes Tables  
Schedule of Debt [Table Text Block]
  

October 1, 2023

  

July 2, 2023

 
  

(in thousands)

 

Revolver

 $35,000  $- 

Term Loans

  197,500   200,000 

Deferred financing costs

  (3,429

)

  (3,609

)

Total debt

  229,071   196,391 

Less: current debt

  45,000   10,000 

Long-term debt

 $184,071  $186,391 
v3.23.3
Note 8 - Property, Plant and Equipment (Tables)
 3 Months Ended
Oct. 01, 2023
Notes Tables  
Property, Plant and Equipment [Table Text Block]
   

October 1, 2023

    

July 2, 2023

  
   

(in thousands)

  

Land

   $ 33,866     $ 33,866  

Orchards in production and land improvements

     20,509       20,401  

Building and building improvements

     68,344       67,647  

Leasehold improvements

     29,677       29,524  

Production equipment

     126,529       125,297  

Furniture and fixtures

     9,149       9,102  

Computer and telecommunication equipment

     42,622       41,859  

Software

     185,001       181,085  

Capital projects in progress

     18,264       18,205  

Property, plant and equipment, gross

     533,961       526,986  

Accumulated depreciation and amortization

     (304,768

)

     (292,417

)

Property, plant and equipment, net

   $ 229,193     $ 234,569  
v3.23.3
Note 9 - Fair Value Measurements (Tables)
 3 Months Ended
Oct. 01, 2023
Notes Tables  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
  

Carrying

Value

  

Fair Value Measurements

Assets (Liabilities)

 
      

Level 1

  

Level 2

  

Level 3

 
  

(in thousands)

 

As of October 1, 2023:

                

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

 $23,803  $23,803  $-  $- 

Total assets (liabilities) at fair value

 $23,803  $23,803  $-  $- 
                 

As of July 2, 2023:

                

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

 $22,617  $22,617  $-  $- 

Total assets (liabilities) at fair value

 $22,617  $22,617  $-  $- 
v3.23.3
Note 11 - Business Segments (Tables)
 3 Months Ended
Oct. 01, 2023
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
  

Three Months Ended

 
  

October 1,

2023

  

October 2,

2022

 

Net Revenues:

 

(in thousands)

 

Segment Net Revenues:

        

Consumer Floral & Gifts

 $142,194  $162,180 

BloomNet

  28,870   33,367 

Gourmet Foods & Gift Baskets

  98,109   108,228 

Corporate

  270   44 

Intercompany eliminations

  (393

)

  (215

)

Total net revenues

 $269,050  $303,604 
         

Operating Income (Loss):

        

Segment Contribution Margin:

        

Consumer Floral & Gifts

 $8,826  $10,810 

BloomNet

  9,387   9,517 

Gourmet Foods & Gift Baskets

  (11,028

)

  (18,710

)

Segment Contribution Margin Subtotal

  7,185   1,617 

Corporate (a)

  (31,568

)

  (30,283

)

Depreciation and amortization

  (13,194

)

  (12,694

)

Operating income (loss)

 $(37,577

)

 $(41,360

)
Disaggregation of Revenue [Table Text Block]
   

Three Months Ended

  
   

Consumer Floral &
Gifts

    

BloomNet

   

Gourmet Foods &

Gift
Baskets

    

Corporate and

Eliminations

    

Consolidated

  
   

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

    

October 1, 2023

    

October 2, 2022

  

Net revenues

                                                                                

E-commerce

   $ 140,335     $ 160,382     $ -     $ -     $ 69,576     $ 78,540     $ -     $ -     $ 209,911     $ 238,922  

Other

     1,859       1,798       28,870       33,367       28,533       29,688       (123

)

     (171

)

     59,139       64,682  

Total net revenues

   $ 142,194     $ 162,180     $ 28,870     $ 33,367     $ 98,109     $ 108,228     $ (123

)

   $ (171

)

   $ 269,050     $ 303,604  
                                                                                 

Other revenues detail

                                                                          

Retail and other

     1,859       1,798       -       -       1,934       1,907       -       -       3,793       3,705  

Wholesale

     -       -       11,797       13,622       26,599       27,781       -       -       38,396       41,403  

BloomNet services

     -       -       17,073       19,745       -       -       -       -       17,073       19,745  

Corporate

     -       -       -       -       -       -       270       44       270       44  

Eliminations

     -       -       -       -       -       -       (393

)

     (215

)

     (393

)

     (215

)

Total other revenues

   $ 1,859     $ 1,798     $ 28,870     $ 33,367     $ 28,533     $ 29,688     $ (123

)

   $ (171

)

   $ 59,139     $ 64,682  
v3.23.3
Note 12 - Leases (Tables)
 3 Months Ended
Oct. 01, 2023
Notes Tables  
Lease, Cost [Table Text Block]
   

Three Months Ended

 
   

October 1, 2023

    

October 2, 2022

  
   

(in thousands)

  

Lease costs:

                

Operating lease costs

   $ 5,622     $ 5,347  

Variable lease costs

     6,514       5,851  

Short-term lease cost

     883       1,565  

Sublease income

     (251

)

     (243

)

Total lease costs

   $ 12,768     $ 12,520  
                 

Cash paid for amounts included in measurement of operating lease liabilities

   $ 5,638       4,481  

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

   $ 91       9,985  
   

October 1, 2023

  
   

(in thousands)

  

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

     8.5  

Weighted-discount rate - operating leases

     4.0

%
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]
Fiscal Year:        

Remainder of 2024

   $ 15,169  

2025

     20,394  

2026

     18,409  

2027

     16,784  

2028

     15,862  

Thereafter

     67,096  

Total Future Minimum Lease Payments

     153,714  

Less: Imputed Remaining Interest

     24,856  

Total Operating Lease Liabilities

     128,858  

Less: Current portion of long-term operating lease liabilities

     15,580  

Long-term operating lease liabilities

   $ 113,278  
v3.23.3
Note 13 - Accrued Expenses (Tables)
 3 Months Ended
Oct. 01, 2023
Notes Tables  
Schedule of Accrued Liabilities [Table Text Block]
  

October 1, 2023

  

July 2, 2023

 
  

(in thousands)

 

Payroll and employee benefits

 $27,260  $33,927 

Deferred revenue

  29,697   30,811 

Accrued marketing expenses

  11,564   13,679 

Accrued florist payout

  13,824   13,437 

Accrued purchases

  28,573   18,351 

Other

  31,777   31,709 

Accrued Expenses

 $142,695  $141,914 
v3.23.3
Note 1 - Accounting Policies (Details Textual) - USD ($)
$ in Millions
 3 Months Ended
Oct. 01, 2023
Jul. 02, 2023
Contract with Customer, Liability, Current $ 29.7 $ 30.8
Contract with Customer, Liability, Revenue Recognized $ 16.1  
v3.23.3
Note 3 - Acquisitions (Details Textual) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 10, 2023
Nov. 30, 2022
Oct. 01, 2023
Jul. 02, 2023
Goodwill     $ 153,376 $ 153,376
Things Remembered Brand [Member]        
Revenue from Contract with Customer, Including Assessed Tax   $ 30,400    
Things Remembered Brand [Member]        
Business Combination, Consideration Transferred $ 5,000      
Goodwill 1,700      
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory 1,300      
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Equipment 400      
Things Remembered Brand [Member] | Customer Lists [Member]        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles $ 800      
Finite-Lived Intangible Asset, Useful Life (Year) 3 years      
Things Remembered Brand [Member] | Trademarks [Member]        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets $ 800      
v3.23.3
Note 4 - Inventory - Summary of Inventory (Details) - USD ($)
$ in Thousands
Oct. 01, 2023
Jul. 02, 2023
Finished goods $ 160,087 $ 92,582
Work-in-process 31,265 33,818
Raw materials 89,269 64,934
Total inventory $ 280,621 $ 191,334
v3.23.3
Note 5 - Goodwill and Intangible Assets (Details Textual)
$ in Millions
Oct. 01, 2023
USD ($)
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year $ 3.3
Finite-Lived Intangible Asset, Expected Amortization, Year One 1.9
Finite-Lived Intangible Asset, Expected Amortization, Year Two 1.3
Finite-Lived Intangible Asset, Expected Amortization, Year Three 0.5
Finite-Lived Intangible Asset, Expected Amortization, Year Four 0.2
Finite-Lived Intangible Asset, Expected Amortization, Year Five $ 0.3
v3.23.3
Note 5 - Goodwill and Intangible Assets - Goodwill by Segment (Details) - USD ($)
$ in Thousands
Oct. 01, 2023
Jul. 02, 2023
Balance $ 153,376 $ 153,376
Consumer Floral [Member]    
Balance 153,376  
BloomNet Wire Service [Member]    
Balance 0  
Gourmet Foods and Gift Baskets [Member]    
Balance $ 0  
v3.23.3
Note 5 - Goodwill and Intangible Assets - Other Intangible Assets (Details) - USD ($)
$ in Thousands
Oct. 01, 2023
Jul. 02, 2023
Intangible assets with determinable lives, gross $ 39,437 $ 39,437
Accumulated amortization 31,899 30,784
Intangible assets with determinable lives, net 7,538 8,653
Trademarks with indefinite lives, gross 131,235 131,235
Total identifiable intangible assets, gross 170,672 170,672
Other intangibles, net 138,773 139,888
Licensing Agreements [Member]    
Intangible assets with determinable lives, gross 7,420 7,420
Accumulated amortization 6,595 6,569
Intangible assets with determinable lives, net $ 825 851
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 $ 29,071 29,071
Accumulated amortization 22,685 21,611
Intangible assets with determinable lives, net $ 6,386 7,460
Customer Lists [Member] | Minimum [Member]    
Finite-lived intangible asset, useful life (Year) 3 years  
Customer Lists [Member] | Maximum [Member]    
Finite-lived intangible asset, useful life (Year) 10 years  
Other Intangible Assets [Member]    
Intangible assets with determinable lives, gross $ 2,946 2,946
Accumulated amortization 2,619 2,604
Intangible assets with determinable lives, net $ 327 $ 342
Other Intangible Assets [Member] | Minimum [Member]    
Finite-lived intangible asset, useful life (Year) 5 years  
Other Intangible Assets [Member] | Maximum [Member]    
Finite-lived intangible asset, useful life (Year) 14 years  
v3.23.3
Note 6 - Investments (Details Textual) - USD ($)
$ in Millions
Oct. 01, 2023
Jul. 02, 2023
Equity Securities without Readily Determinable Fair Value, Amount $ 2.6 $ 2.6
v3.23.3
Note 7 - Debt, Net (Details Textual) - USD ($)
$ in Millions
 7 Months Ended
Jun. 27, 2023
Aug. 01, 2023
Oct. 01, 2023
Jun. 26, 2023
The 2020 Credit Agreement [Member] | Revolving Credit Facility [Member]        
Line of Credit Facility, Maximum Borrowing Capacity $ 225.0     $ 250.0
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     $ 150.0
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     10.0  
Long-Term Debt, Maturity, Year Two     20.0  
Long-Term Debt, Maturity, Year Three     20.0  
Long-Term Debt, Maturity, Year Four     $ 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%      
v3.23.3
Note 7 - Debt, Net - Summary of Current and Long-term Debt (Details) - USD ($)
$ in Thousands
Oct. 01, 2023
Jul. 02, 2023
Deferred financing costs $ (3,429) $ (3,609)
Debt instrument, carrying amount 229,071 196,391
Less: current debt 45,000 10,000
Long-term debt 184,071 186,391
Line of Credit [Member]    
Revolver 35,000 0
Term Loan [Member]    
Term Loans $ 197,500 $ 200,000
v3.23.3
Note 8 - Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
Oct. 01, 2023
Jul. 02, 2023
Property, plant, and equipment, gross $ 533,961 $ 526,986
Accumulated depreciation and amortization (304,768) (292,417)
Property, plant and equipment, net 229,193 234,569
Land [Member]    
Property, plant, and equipment, gross 33,866 33,866
Orchards in Production and Land Improvements [Member]    
Property, plant, and equipment, gross 20,509 20,401
Building and Building Improvements [Member]    
Property, plant, and equipment, gross 68,344 67,647
Leasehold Improvements [Member]    
Property, plant, and equipment, gross 29,677 29,524
Equipment [Member]    
Property, plant, and equipment, gross 126,529 125,297
Furniture and Fixtures [Member]    
Property, plant, and equipment, gross 9,149 9,102
Computer and Telecommunication Equipment [Member]    
Property, plant, and equipment, gross 42,622 41,859
Software and Software Development Costs [Member]    
Property, plant, and equipment, gross 185,001 181,085
Capital Projects in Progress [Member]    
Property, plant, and equipment, gross $ 18,264 $ 18,205
v3.23.3
Note 9 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - USD ($)
$ in Thousands
Oct. 01, 2023
Jul. 02, 2023
Trading securities held in a “rabbi trust” [1] $ 23,803 $ 22,617
Total assets (liabilities) at fair value 23,803 22,617
Fair Value, Inputs, Level 1 [Member]    
Trading securities held in a “rabbi trust” [1] 23,803 22,617
Total assets (liabilities) at fair value 23,803 22,617
Fair Value, Inputs, Level 2 [Member]    
Trading securities held in a “rabbi trust” [1] 0 0
Total assets (liabilities) at fair value 0 0
Fair Value, Inputs, Level 3 [Member]    
Trading securities held in a “rabbi trust” [1] 0 0
Total assets (liabilities) at fair value $ 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.
v3.23.3
Note 10 - Income Taxes (Details Textual) - USD ($)
$ in Millions
 3 Months Ended
Oct. 01, 2023
Oct. 02, 2022
Effective Income Tax Rate Reconciliation, Percent 24.80% 25.30%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00% 21.00%
Unrecognized Tax Benefits $ 1.6  
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit $ 0.1  
Domestic Tax Authority [Member]    
Open Tax Year 2020 2021 2022  
State and Local Jurisdiction [Member]    
Open Tax Year 2016 2017 2018 2019 2020 2021 2022  
Foreign Tax Authority [Member]    
Open Tax Year 2017 2018 2019 2020 2021 2022  
v3.23.3
Note 11 - Business Segments (Details Textual)
 3 Months Ended
Oct. 01, 2023
Number of Reportable Segments 3
v3.23.3
Note 11 - Business Segments - Segment Performance (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 01, 2023
Oct. 02, 2022
Net revenues $ 269,050 $ 303,604
Depreciation and amortization (13,194) (12,694)
Operating income (loss) (37,577) (41,360)
Operating Segments [Member]    
Contribution margin 7,185 1,617
Corporate, Non-Segment [Member]    
Net revenues 270 44
Corporate (a) [1] (31,568) (30,283)
Intersegment Eliminations [Member]    
Net revenues (393) (215)
Consumer Floral and Gifts [Member] | Operating Segments [Member]    
Net revenues 142,194 162,180
BloomNet [Member] | Operating Segments [Member]    
Net revenues 28,870 33,367
Gourmet Foods and Gift Baskets [Member] | Operating Segments [Member]    
Net revenues 98,109 108,228
Contribution margin (11,028) (18,710)
Consumer Floral [Member] | Operating Segments [Member]    
Net revenues 142,194 162,180
Contribution margin 8,826 10,810
BloomNet Wire Service [Member] | Operating Segments [Member]    
Net revenues 28,870 33,367
Contribution margin $ 9,387 $ 9,517
[1] 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.
v3.23.3
Note 11 - Business Segments - Disaggregation of Revenue From Contracts With Customers (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 01, 2023
Oct. 02, 2022
Net revenues $ 269,050 $ 303,604
E-commerce [Member]    
Net revenues 209,911 238,922
Product and Service, Other [Member]    
Net revenues 59,139 64,682
Product and Service, Other [Member] | Retail and Other [Member]    
Net revenues 3,793 3,705
Product and Service, Other [Member] | Wholesale [Member]    
Net revenues 38,396 41,403
Product and Service, Other [Member] | Bloomnet Services [Member]    
Net revenues 17,073 19,745
Segment Reconciling Items [Member]    
Net revenues (123) (171)
Segment Reconciling Items [Member] | E-commerce [Member]    
Net revenues 0 0
Segment Reconciling Items [Member] | Product and Service, Other [Member]    
Net revenues (123) (171)
Consolidation, Eliminations [Member] | Product and Service, Other [Member]    
Net revenues (393) (215)
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
Corporate, Non-Segment [Member]    
Net revenues 270 44
Corporate, Non-Segment [Member] | Product and Service, Other [Member]    
Net revenues 270 44
Consumer Floral [Member] | Operating Segments [Member]    
Net revenues 142,194 162,180
Consumer Floral [Member] | Operating Segments [Member] | E-commerce [Member]    
Net revenues 140,335 160,382
Consumer Floral [Member] | Operating Segments [Member] | Product and Service, Other [Member]    
Net revenues 1,859 1,798
Consumer Floral [Member] | Operating Segments [Member] | Product and Service, Other [Member] | Retail and Other [Member]    
Net revenues 1,859 1,798
Consumer Floral [Member] | Operating Segments [Member] | Product and Service, Other [Member] | Wholesale [Member]    
Net revenues 0 0
Consumer Floral [Member] | Operating Segments [Member] | Product and Service, Other [Member] | Bloomnet Services [Member]    
Net revenues 0 0
BloomNet Wire Service [Member] | Operating Segments [Member]    
Net revenues 28,870 33,367
BloomNet Wire Service [Member] | Operating Segments [Member] | E-commerce [Member]    
Net revenues 0 0
BloomNet Wire Service [Member] | Operating Segments [Member] | Product and Service, Other [Member]    
Net revenues 28,870 33,367
BloomNet Wire Service [Member] | Operating Segments [Member] | Product and Service, Other [Member] | Retail and Other [Member]    
Net revenues 0 0
BloomNet Wire Service [Member] | Operating Segments [Member] | Product and Service, Other [Member] | Wholesale [Member]    
Net revenues 11,797 13,622
BloomNet Wire Service [Member] | Operating Segments [Member] | Product and Service, Other [Member] | Bloomnet Services [Member]    
Net revenues 17,073 19,745
Gourmet Foods and Gift Baskets [Member] | Operating Segments [Member]    
Net revenues 98,109 108,228
Gourmet Foods and Gift Baskets [Member] | Operating Segments [Member] | E-commerce [Member]    
Net revenues 69,576 78,540
Gourmet Foods and Gift Baskets [Member] | Operating Segments [Member] | Product and Service, Other [Member]    
Net revenues 28,533 29,688
Gourmet Foods and Gift Baskets [Member] | Operating Segments [Member] | Product and Service, Other [Member] | Retail and Other [Member]    
Net revenues 1,934 1,907
Gourmet Foods and Gift Baskets [Member] | Operating Segments [Member] | Product and Service, Other [Member] | Wholesale [Member]    
Net revenues 26,599 27,781
Gourmet Foods and Gift Baskets [Member] | Operating Segments [Member] | Product and Service, Other [Member] | Bloomnet Services [Member]    
Net revenues $ 0 $ 0
v3.23.3
Note 12 - Leases - Lease Costs (Details) - USD ($)
$ in Thousands
 3 Months Ended
Oct. 01, 2023
Oct. 02, 2022
Operating lease costs $ 5,622 $ 5,347
Variable lease costs 6,514 5,851
Short-term lease cost 883 1,565
Sublease income (251) (243)
Total lease costs 12,768 12,520
Cash paid for amounts included in measurement of operating lease liabilities 5,638 4,481
Right-of-use assets obtained in exchange for new operating lease liabilities $ 91 $ 9,985
Weighted-average remaining lease term - operating leases (in years) (Year) 8 years 6 months  
Weighted-discount rate - operating leases 4.00%  
v3.23.3
Note 12 - Leases - Maturities of Lease Liabilities (Details) - USD ($)
$ in Thousands
Oct. 01, 2023
Jul. 02, 2023
Remainder of 2024 $ 15,169  
2025 20,394  
2026 18,409  
2027 16,784  
2028 15,862  
Thereafter 67,096  
Total Future Minimum Lease Payments 153,714  
Less: Imputed Remaining Interest 24,856  
Total Operating Lease Liabilities 128,858  
Less: Current portion of long-term operating lease liabilities 15,580 $ 15,759
Long-term operating lease liabilities $ 113,278 $ 117,330
v3.23.3
Note 13 - Accrued Expenses - Accrued Expenses (Details) - USD ($)
$ in Thousands
Oct. 01, 2023
Jul. 02, 2023
Payroll and employee benefits $ 27,260 $ 33,927
Deferred revenue 29,697 30,811
Accrued marketing expenses 11,564 13,679
Accrued florist payout 13,824 13,437
Accrued purchases 28,573 18,351
Other 31,777 31,709
Accrued Expenses $ 142,695 $ 141,914
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