# 1 800 Flowers Com Inc: Form 10-Q for the period ended Mar 30, 2025

- Company: [1 800 Flowers Com Inc](/companies/flws.md) (CIK 1084869)
- Form: 10-Q
- Filed: 2025-05-09
- Accepted by EDGAR: May 9, 2025, 09:59 ET
- Period: 2025-03-30
- Accession: 0001084869-25-000007
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1084869/000108486925000007/flws-20250330.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1084869/000108486925000007/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-12-30 to 2025-03-30 | $331.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-07-01 to 2025-03-30 | $1.35bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-12-30 to 2025-03-30 | $226.5m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2024-07-01 to 2025-03-30 | $816.1m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-12-30 to 2025-03-30 | $105.0m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-07-01 to 2025-03-30 | $532.9m | us-gaap:GrossProfit |
| Operating income | 3 months, 2024-12-30 to 2025-03-30 | −$193.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-07-01 to 2025-03-30 | −$149.3m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-12-30 to 2025-03-30 | −$18.5m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-07-01 to 2025-03-30 | −$9.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-12-30 to 2025-03-30 | −$178.2m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-07-01 to 2025-03-30 | −$148.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-12-30 to 2025-03-30 | −$2.80 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-07-01 to 2025-03-30 | −$2.32 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-12-30 to 2025-03-30 | −$2.80 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-07-01 to 2025-03-30 | −$2.32 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-12-30 to 2025-03-30 | 63,598,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-07-01 to 2025-03-30 | 63,877,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-07-01 to 2025-03-30 | $706.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-07-01 to 2025-03-30 | $32.4m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 9 months, 2024-07-01 to 2025-03-30 | $9.9m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-30 | $84.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-30 | $303.8m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-30 | $806.2m | us-gaap:Assets |
| Current liabilities | at 2025-03-30 | $195.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-30 | $488.5m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-30 | $142.3m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-30 | $15.0m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-03-30 | $317.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 62,118 characters.

*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 fiscal year ended June 30, 2024. 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 fiscal year ended June 30, 2024 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 share more, connect more, and build more and better relationships. The Company’s e-commerce business platform features our all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, Personalization Mall.com®, Shari’s Berries®, FruitBouquets.com®, Things Remembered®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, Scharffen Berger®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge on eligible products across our portfolio of brands, the Company 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 its members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; Alice’s Table®, a lifestyle business offering fully digital on demand floral, culinary and other experiences to guests across the country; and Card Isle®, an e-commerce greeting card service.

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 fiscal year ended June 30, 2024.*

### Macro-economic Conditions

Overall, broader macro-economic conditions continue to impact our consumers. We have seen consumer confidence and sentiment decline in response to various uncertainties, including potential tariff impacts on inflation, a softening labor market, and shifting economic policies. Throughout the first nine months of fiscal 2025, we have seen sales challenged by a reduction in everyday or just-because gift giving and although customers are more inclined to shop during the holidays, they are shopping later in the season. Total consolidated revenues decreased 12.6% to $331.5 million and 8.3% to $1,349.0 million during the three and nine months ended March 30, 2025 respectively, compared with total consolidated revenues of $379.4 million and $1,470.5 million in the same prior year periods.

The Company’s exposure to increased tariffs is difficult to identify with certainty as the breadth, extent and level of tariffs remains uncertain. Besides the impact on customer buying habits, which affect revenues, the tariffs as currently in effect primarily impact the Company’s cost of revenues, particularly with respect to products that the Company sources from China. We currently estimate our tariff exposure to be approximately $55.0 million with the most significant impact on our personalization and wholesale businesses. To manage the impact of tariffs on our costs, we are continuing to consider sourcing opportunities outside China, working with existing vendors on concessions, changing componentry, and modifying our assortment. A last measure would be to pass through some amount of the tariff cost in pricing.

### Goodwill and Intangible Impairment

During the quarter ended March 30, 2025, the Company evaluated whether events or circumstances had changed such that it was more likely than not that the fair value of its goodwill, intangible and other long-lived assets were less than their carrying amounts. After consideration of current operating results, changes in macro-economic conditions, and a decline in the Company’s market capitalization, the Company concluded that a triggering event had occurred for its Consumer Floral & Gifts reporting unit. As such, the Company performed an impairment test of the reporting unit’s goodwill, intangibles and long-lived assets as of March 30, 2025, and recorded a non-cash goodwill and intangible impairment charge of $138.2 million, comprised of $113.4 million related to goodwill and $24.8 million attributable to the PersonalizationMall tradename (indefinite-lived intangible asset). The Company concluded that definite-lived and other long-lived assets of the reporting unit were not impaired.

In the prior fiscal year, during the quarter ended December 31, 2023, as a result of a decline in the actual and projected revenue for the Company’s PersonalizationMall tradename, as well as a higher discount rate resulting from the higher interest rate environment, the Company determined that an impairment assessment was required for this tradename. This assessment resulted in the Company recording a non-cash impairment charge of $19.8 million to reduce the recorded carrying value of the PersonalizationMall tradename. See Note 6 – Goodwill and other intangibles, net in Item 1 for further information.

### Acquisition of Scharffen Berger

On July 1, 2024, the Company completed its acquisition of certain assets of Scharffen Berger, a chocolate manufacturing company, expanding the Company's product offerings in the Gourmet Foods & Gift Baskets Segment. The Company used cash on its consolidated balance sheet to fund the approximately $3.3 million purchase – See Note 3 – Acquisitions in Item 1.

### Acquisition of Card Isle

On April 3, 2024, the Company completed its acquisition of certain assets of Card Isle, an e-commerce greeting card company, expanding the Company’s presence in the greeting card category across all brands. The Company used cash on its consolidated balance sheet to fund the $3.6 million purchase – See Note 3 – Acquisitions in Item 1.

### Celebrations Wave

On May 8, 2025, the Company announced Celebrations Wave, a comprehensive evolution of the Company that begins with transforming the customer journey into a sentiment-led experience. Celebrations Wave strives to advance the Company’s vision of becoming the premier relationship destination for heartfelt expressions, with a business model that aligns with future technological advancements and consumer purchasing preferences. This strategic plan seeks to increase revenues of both every day and holiday occasions, optimize operations, lower costs, and accelerate the pace of change, leading to higher profitability and cash flows over time, positioning the Company for sustainable and profitable growth. As part of this initiative, we are implementing cost savings reductions, which may result in restructuring and other charges totaling between $10.0 million and $15.0 million, before taxes, mainly consisting of employee-related costs, asset write-offs and other costs to implement these initiatives of which approximately $0.7 million was incurred during the quarter ended March 30, 2025, with the remainder expected to be incurred in the next twelve months.

### Company Guidance

Given the rapidly evolving macroeconomic landscape and the uncertainties that continue to shape the near-term outlook, the Company has made the decision to withdraw its near-term guidance. This decision reflects the unpredictable external factors affecting the current macro environment and the management team’s focus on executing a transformational strategy that positions the Company for long-term success.

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, and reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures. These non-GAAP financial measures are referred to as “non-GAAP”, “adjusted” or "on a comparable basis" 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 imply a degree of precision that 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.

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

The following table presents EBITDA and Adjusted EBITDA for the three and nine months ended March 30, 2025 and March 31, 2024, respectively.

*(in thousands)*

| Reconciliation of net income (loss) to Adjusted EBITDA (non-GAAP): | Three Months Ended March 30, 2025 | March 31, 2024 | Nine Months Ended March 30, 2025 | March 31, 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net income (loss) | $(178,244) | $(16,903) | $(148,086) | $14,762 |
| Add: Interest expense and other, net | 3,289 | (2,693) | 8,114 | 3,138 |
| Add: Depreciation and amortization | 13,119 | 13,232 | 40,287 | 40,578 |
| Add: Income tax (benefit) expense | (18,475) | (8,333) | (9,362) | 7,844 |
| EBITDA | (180,311) | (14,697) | (109,047) | 66,322 |
| Add: Stock-based compensation | 2,998 | 3,046 | 9,106 | 7,641 |
| Add: Compensation charge related to NQDC Plan investment (depreciation) appreciation | (1,849) | 3,534 | 1,024 | 5,712 |
| Add: System implementation costs | 5,314 | - | 13,401 | - |
| Add: Goodwill and intangible impairment | 138,220 | - | 138,220 | 19,762 |
| Add: Restructuring cost/Severance | 708 | 2,417 | 708 | 2,417 |
| Adjusted EBITDA | $(34,920) | $(5,700) | $53,412 | $101,854 |

### Adjusted net income (loss) and adjusted or comparable net income (loss) per common share

We define adjusted net income (loss) and adjusted or comparable net income (loss) per common share as net income (loss) and net income (loss) per common share adjusted for certain items affecting period-to-period comparability. We believe that adjusted net income (loss) and adjusted or comparable net income (loss) per common share are meaningful measures because they increase the comparability of period-to-period results. Since these are not measures of performance calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, GAAP net income (loss) and net income (loss) per common share, as indicators of operating performance and they may not be comparable to similarly titled measures employed by other companies.

The following table presents the adjusted net income (loss) and adjusted net income (loss) per common share for the three and nine months ended March 30, 2025 and March 31, 2024, respectively.

*(in thousands, except for share data)*

| Reconciliation of net income (loss) to adjusted net income (loss) (non-GAAP): | Three Months Ended March 30, 2025 | March 31, 2024 | Nine Months Ended March 30, 2025 | March 31, 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net income (loss) | $(178,244) | $(16,903) | $(148,086) | $14,762 |
| Adjustments to reconcile net income (loss) to adjusted net income (loss) (non-GAAP) |  |  |  |  |
| Add: System implementation costs | 5,314 | - | 13,401 | - |
| Add: Restructuring cost/Severance | 708 | 2,417 | 708 | 2,417 |
| Add: Goodwill and intangible impairment | 138,220 | - | 138,220 | 19,762 |
| Deduct: Tax related adjustments | (10,931) | (3,538) | (12,933) | (3,538) |
| Adjusted net income (loss) (non-GAAP) | $(44,933) | $(18,024) | $(8,690) | $33,403 |
| Basic and diluted net income (loss) per common share |  |  |  |  |
| Basic | $(2.80) | $(0.26) | $(2.32) | $0.23 |
| Diluted | $(2.80) | $(0.26) | $(2.32) | $0.23 |
| Basic and diluted adjusted net income (loss) per common share (non-GAAP) |  |  |  |  |
| Basic | $(0.71) | $(0.28) | $(0.14) | $0.52 |
| Diluted | $(0.71) | $(0.28) | $(0.14) | $0.51 |
| Weighted average shares used in the calculation of basic and diluted net income (loss) and adjusted net income (loss) per common share |  |  |  |  |
| Basic | 63,598 | 64,489 | 63,877 | 64,703 |
| Diluted | 63,598 | 64,489 | 63,877 | 65,057 |

### Segment contribution margin and adjusted segment contribution margin

We define segment contribution margin as earnings before interest, taxes, depreciation and amortization, before the allocation of corporate overhead expenses. Adjusted segment contribution margin is defined as contribution margin adjusted for certain items affecting period-to-period comparability. When viewed together with our GAAP results, we believe segment contribution margin and adjusted segment contribution margin provide management and users of the financial statements meaningful information about the performance of our business segments.

Segment contribution margin and adjusted segment contribution margin are 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 and adjusted segment contribution margin is that they are 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 (loss) and net income (loss).

The following table presents the net revenues, gross profit, segment contribution margin, and adjusted segment contribution margin from each of the Company’s business segments, for the three and nine months ended March 30, 2025 and March 31, 2024, respectively.

*(dollars in thousands)*

| Net revenues: | Three Months Ended March 30, 2025 | System Implementation Costs | Restructuring Cost / Severance | Goodwill and Intangible Impairment | As Adjusted (non-GAAP) March 30, 2025 | March 31, 2024 | Restructuring Cost /Severance | As Adjusted (non-GAAP) March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Consumer Floral & Gifts | $196,030 | $- | $- | $- | $196,030 | $221,207 | $- | $221,207 | -11.4% |
| BloomNet | 28,552 | - | - | - | 28,552 | 27,314 | - | 27,314 | 4.5% |
| Gourmet Foods & Gift Baskets | 107,088 | - | - | - | 107,088 | 130,989 | - | 130,989 | -18.2% |
| Corporate | 69 | - | - | - | 69 | 167 | - | 167 | -58.7% |
| Intercompany eliminations | (285) | - | - | - | (285) | (272) | - | (272) | -4.8% |
| **Total net revenues** | $331,454 | $- | $- | $- | $331,454 | $379,405 | $- | $379,405 | -12.6% |
| **Gross profit:** |  |  |  |  |  |  |  |  |  |
| Consumer Floral & Gifts | $72,045 | $- | $- | $- | $72,045 | $87,005 | $- | $87,005 | -17.2% |
|  | 36.8% |  |  |  | 36.8% | 39.3% |  | 39.3% |  |
| BloomNet | 13,399 | - | - | - | 13,399 | 12,411 | - | 12,411 | 8.0% |
|  | 46.9% |  |  |  | 46.9% | 45.4% |  | 45.4% |  |
| Gourmet Foods & Gift Baskets | 19,436 | 4,633 | - | - | 24,069 | 39,169 | - | 39,169 | -38.6% |
|  | 18.1% |  |  |  | 22.5% | 29.9% |  | 29.9% |  |
| Corporate | 119 | - | - | - | 119 | 132 | - | 132 | -9.8% |
|  | 172.5% |  |  |  | 172.5% | 79.0% |  | 79.0% |  |
| **Total gross profit** | $104,999 | $4,633 | $- | $- | $109,632 | $138,717 | $- | $138,717 | -21.0% |
|  | 31.7% |  |  |  | 33.1% | 36.6% |  | 36.6% |  |
| **EBITDA (non-GAAP):** |  |  |  |  |  |  |  |  |  |
| **Segment Contribution Margin (non-GAAP) (a):** |  |  |  |  |  |  |  |  |  |
| Consumer Floral & Gifts | $(131,690) | $- | $- | $138,220 | $6,530 | $22,190 | $630 | $22,820 | -71.4% |
| BloomNet | 8,472 | - | 33 | - | 8,505 | 7,506 | 69 | 7,575 | 12.3% |
| Gourmet Foods & Gift Baskets | (27,802) | 5,314 | 181 | - | (22,307) | (8,172) | 538 | (7,634) | -192.2% |
| Segment Contribution Margin Subtotal | (151,020) | 5,314 | 214 | 138,220 | (7,272) | 21,524 | 1,237 | 22,761 | -131.9% |
| Corporate (b) | (29,291) | - | 494 | - | (28,797) | (36,221) | 1,180 | (35,041) | 17.8% |
| **EBITDA (non-GAAP)** | (180,311) | 5,314 | 708 | 138,220 | (36,069) | (14,697) | 2,417 | (12,280) | -193.7% |
| Add: Stock-based compensation | 2,998 | - | - | - | 2,998 | 3,046 | - | 3,046 | -1.6% |
| Add: Compensation charge related to NQDC Plan investment (depreciation) appreciation | (1,849) | - | - | - | (1,849) | 3,534 | - | 3,534 | -152.3% |
| **Adjusted EBITDA (non-GAAP) (c)** | $(179,162) | $5,314 | $708 | $138,220 | $(34,920) | $(8,117) | $2,417 | $(5,700) | -512.6% |

25

*(dollars in thousands)*

| Net revenues: | Nine Months Ended March 30, 2025 | System Implementation Costs | Restructuring Cost/ Severance | Goodwill and Intangible Impairment | As Adjusted (non-GAAP) March 30, 2025 | March 31, 2024 | Intangible Impairment | Restructuring Cost / Severance | As Adjusted (non-GAAP) March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Consumer Floral & Gifts | $565,559 | $- | $- | $- | $565,559 | $618,236 | $- | $- | $618,236 | -8.5% |
| BloomNet | 74,464 | - | - | - | 74,464 | 83,420 | - | - | 83,420 | -10.7% |
| Gourmet Foods & Gift Baskets | 709,545 | - | - | - | 709,545 | 769,061 | - | - | 769,061 | -7.7% |
| Corporate | 271 | - | - | - | 271 | 716 | - | - | 716 | -62.2% |
| Intercompany eliminations | (803) | - | - | - | (803) | (924) | - | - | (924) | 13.1% |
| **Total net revenues** | $1,349,036 | $- | $- | $- | $1,349,036 | $1,470,509 | $- | $- | $1,470,509 | -8.3% |
| **Gross profit:** |  |  |  |  |  |  |  |  |  |  |
| Consumer Floral & Gifts | $224,262 | $- | $- | $- | $224,262 | $252,503 | $- | $- | $252,503 | -11.2% |
|  | 39.7% |  |  |  | 39.7% | 40.8% |  |  | 40.8% |  |
| BloomNet | 36,551 | - | - | - | 36,551 | 39,883 | - | - | 39,883 | -8.4% |
|  | 49.1% |  |  |  | 49.1% | 47.8% |  |  | 47.8% |  |
| Gourmet Foods & Gift Baskets | 271,670 | 6,625 | - | - | 278,295 | 303,276 | - | - | 303,276 | -8.2% |
|  | 38.3% |  |  |  | 39.2% | 39.4% |  |  | 39.4% |  |
| Corporate | 428 | - | - | - | 428 | 680 | - | - | 680 | -37.1% |
|  | 157.9% |  |  |  | 157.9% | 95.0% |  |  | 95.0% |  |
| **Total gross profit** | $532,911 | $6,625 | $- | $- | $539,536 | $596,342 | $- | $- | $596,342 | -9.5% |
|  | 39.5% |  |  |  | 40.0% | 40.6% |  |  | 40.6% |  |
| **EBITDA (non-GAAP):** |  |  |  |  |  |  |  |  |  |  |
| **Segment Contribution Margin (non-GAAP) (a):** |  |  |  |  |  |  |  |  |  |  |
| Consumer Floral & Gifts | $(105,159) | $- | - | $138,220 | $33,061 | $41,609 | $19,762 | $630 | $62,001 | -46.7% |
| BloomNet | 22,773 | - | 33 | - | 22,806 | 25,981 | - | 69 | 26,050 | -12.5% |
| Gourmet Foods & Gift Baskets | 67,222 | 10,393 | 181 | - | 77,796 | 98,953 | - | 538 | 99,491 | -21.8% |
| Segment Contribution Margin Subtotal | (15,164) | 10,393 | 214 | 138,220 | 133,663 | 166,543 | 19,762 | 1,237 | 187,542 | -28.7% |
| Corporate (b) | (93,883) | 3,008 | 494 |  | (90,381) | (100,221) | - | 1,180 | (99,041) | 8.7% |
| **EBITDA (non-GAAP)** | (109,047) | 13,401 | 708 | 138,220 | 43,282 | 66,322 | 19,762 | 2,417 | 88,501 | -51.1% |
| Add: Stock-based compensation | 9,106 | - | - | - | 9,106 | 7,641 | - | - | 7,641 | 19.2% |
| Add: Compensation charge related to NQDC Plan investment appreciation | 1,024 | - | - | - | 1,024 | 5,712 | - | - | 5,712 | -82.1% |
| **Adjusted EBITDA (non-GAAP) (c)** | $(98,917) | $13,401 | $708 | $138,220 | $53,412 | $79,675 | $19,762 | $2,417 | $101,854 | -47.6% |

(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 expense (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, stock-based compensation, as well as changes in the fair value of the Company's NQDC Plan. 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.

(c) See reconciliation of the Company's net income (loss) to Adjusted EBITDA (non-GAAP) above.

### Free Cash Flow

We define free cash flow as net cash provided by (used in) 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.

The following table reconciles net cash provided by operating activities, a GAAP measure, to free cash flow, a non-GAAP measure for the nine months ended March 30, 2025 and March 31, 2024, respectively.

*(in thousands)*

|  | Nine Months Ended March 30, 2025 | March 31, 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $706 | $100,051 |
| Capital expenditures | (32,431) | (26,482) |
| Free cash flow | $(31,725) | $73,569 |

### Results of Operations

### Net revenues

*(dollars in thousands)*

| Net revenues: | Three Months Ended March 30, 2025 | March 31, 2024 | % Change | Nine Months Ended March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| E-Commerce | $291,758 | $340,241 | -14.2% | $1,162,258 | $1,288,558 | -9.8% |
| Other | 39,696 | 39,164 | 1.4% | 186,778 | 181,951 | 2.7% |
| Total net revenues | $331,454 | $379,405 | -12.6% | $1,349,036 | $1,470,509 | -8.3% |

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

Net revenues decreased 12.6% and 8.3% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to lower e-commerce order volume across the Company, 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. In addition, the Company experienced a highly promotional consumer environment for Valentine's Day.

The Company acquired Scharffen Berger and Card Isle on July 1, 2024 and April 3, 2024, respectively. Revenues related to these acquisitions were not significant during the three and nine months ended March 30, 2025.

*(dollars in thousands)*

| Net revenues | Three Months Ended Consumer Floral & Gifts March 30, 2025 | March 31, 2024 | % Change | BloomNet March 30, 2025 | March 31, 2024 | % Change | Gourmet Foods & Gift Baskets March 30, 2025 | March 31, 2024 | % Change | Corporate and Eliminations March 30, 2025 | March 31, 2024 | Consolidated March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| E-commerce | $194,048 | $218,590 | -11.2% | $- | $- | -% | $97,710 | $121,651 | -19.7% | $- | $- | $291,758 | $340,241 | -14.2% |
| Other | 1,982 | 2,617 | -24.3% | 28,552 | 27,314 | 4.5% | 9,378 | 9,338 | 0.4% | (216) | (105) | 39,696 | 39,164 | 1.4% |
| **Total net revenues** | $196,030 | $221,207 | -11.4% | $28,552 | $27,314 | 4.5% | $107,088 | $130,989 | -18.2% | $(216) | $(105) | $331,454 | $379,405 | -12.6% |
| **Other revenues detail** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Retail and other | 1,982 | 2,617 | -24.3% | - | - | - | 1,580 | 1,629 | -3.0% | - | - | 3,562 | 4,246 | -16.1% |
| Wholesale | - | - | -% | 13,249 | 12,364 | 7.2% | 7,798 | 7,709 | 1.2% | - | - | 21,047 | 20,073 | 4.9% |
| BloomNet services | - | - | -% | 15,303 | 14,950 | 2.4% | - | - | - | - | - | 15,303 | 14,950 | 2.4% |
| Corporate | - | - | -% | - | - | - | - | - | - | 69 | 167 | 69 | 167 | -58.7% |
| Eliminations | - | - | -% | - | - | - | - | - | - | (285) | (272) | (285) | (272) | -4.8% |
| **Total other revenues** | $1,982 | $2,617 | -24.3% | $28,552 | $27,314 | 4.5% | $9,378 | $9,338 | 0.4% | $(216) | $(105) | $39,696 | $39,164 | 1.4% |

*(dollars in thousands)*

| Net revenues | Nine Months Ended Consumer Floral & Gifts March 30, 2025 | March 31, 2024 | % Change | BloomNet March 30, 2025 | March 31, 2024 | % Change | Gourmet Foods & Gift Baskets March 30, 2025 | March 31, 2024 | % Change | Corporate and Eliminations March 30, 2025 | March 31, 2024 | Consolidated March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| E-commerce | $560,106 | $611,770 | -8.4% | $- | $- | -% | $602,152 | $676,788 | -11.0% | $- | $- | $1,162,258 | $1,288,558 | -9.8% |
| Other | 5,453 | 6,466 | -15.7% | 74,464 | 83,420 | -10.7% | 107,393 | 92,273 | 16.4% | (532) | (208) | 186,778 | 181,951 | 2.7% |
| **Total net revenues** | $565,559 | $618,236 | -8.5% | $74,464 | $83,420 | -10.7% | $709,545 | $769,061 | -7.7% | $(532) | $(208) | $1,349,036 | $1,470,509 | -8.3% |
| **Other revenues detail** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Retail and other | 5,453 | 6,466 | -15.7% | - | - | - | 7,923 | 7,859 | 0.8% | - | - | 13,376 | 14,325 | -6.6% |
| Wholesale | - | - | - | 31,932 | 32,867 | -2.8% | 99,470 | 84,414 | 17.8% | - | - | 131,402 | 117,281 | 12.0% |
| BloomNet services | - | - | - | 42,532 | 50,553 | -15.9% | - | - | - | - | - | 42,532 | 50,553 | -15.9% |
| Corporate | - | - | - | - | - | - | - | - | - | 271 | 716 | 271 | 716 | -62.2% |
| Eliminations | - | - | - | - | - | - | - | - | - | (803) | (924) | (803) | (924) | 13.1% |
| **Total other revenues** | $5,453 | $6,466 | -15.7% | $74,464 | $83,420 | -10.7% | $107,393 | $92,273 | 16.4% | $(532) | $(208) | $186,778 | $181,951 | 2.7% |

### Revenue by sales channel:

**E-commerce revenues (combined online and telephonic)** decreased 14.2% and 9.8% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, primarily due to the decline in demand across our segments.

During the three and nine months ended March 30, 2025, the Company fulfilled approximately 3.7 million and 13.4 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of 14.2% and 8.9%, respectively, compared to the same periods of the prior year. During the three and nine months ended March 30, 2025, the average order value was $79.38 and $86.47, relatively flat and a decrease of 0.9%, respectively, compared to the same periods in the prior year.

**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 March 30, 2025 increased 1.4% compared to the same period of the prior year, primarily due to higher wholesale volumes within the BloomNet segment. Other revenues during the nine months ended March 30, 2025 increased 2.7% compared to the same period of the prior year, due to higher wholesale volumes within the Gourmet Foods & Gift Baskets segment due to increased orders from big box retailers, which was partially offset by lower BloomNet revenues due to lower order volume through the network, including our 1-800-Flowers® brand.

### Revenue by segment:

**Consumer Floral & Gifts –** this segment, which includes the operations of the 1-800-Flowers.com®, Personalization Mall®, Things Remembered® and Alice’s Table brands®, 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 11.4% and 8.5% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to continued macro-economic pressure and a highly promotional consumer environment.

During the three and nine months ended March 30, 2025, Consumer Floral & Gifts orders through its e-commerce sales channel (online and telephonic sales) decreased 12.0% and 7.9%, respectively, compared to the same periods of the prior year. In addition, during the three and nine months ended March 30, 2025, the average order value increased 0.9% and decreased 0.6%, respectively, compared to the same periods of the prior year.

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

Net revenues increased 4.5% and decreased 10.7% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year. Revenue increased for the three months ended March 30, 2025 compared to the prior year period primarily due to an increase in wholesale revenues. The decrease in revenue for the nine months ended March 30, 2025, compared to the prior year was primarily due to lower service revenues, which was 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.com®/DesignPac®, Shari’s Berries®, Vital Choice®, and since July 1, 2024, Scharffen Berger®. 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 Cookies brand names, as well as wholesale operations.

Net revenues within this segment decreased 18.2% and 7.7% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, as a result of lower e-commerce revenues due to lower demand, partially offset by increased wholesale volume as big box retailers increased orders in the current year. In addition, the implementation of a new order management system for our Harry & David brand negatively impacted sales in the first nine months of fiscal 2025.

During the three and nine months ended March 30, 2025, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 18.1% and 10.1%, respectively, compared to the same periods of the prior year. In addition, the average order value for the three and nine months ended March 30, 2025 decreased 2.0% and 1.0%, respectively, compared to the same periods of the prior year, as a result of product mix trending towards lower price point items and a highly promotional consumer environment.

### Gross profit

*(dollars in thousands)*

|  | Three Months Ended March 30, 2025 | March 31, 2024 | % Change | Nine Months Ended March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Gross profit | $104,999 | $138,717 | -24.3% | $532,911 | $596,342 | -10.6% |
| Gross profit % | 31.7% | 36.6% |  | 39.5% | 40.6% |  |

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 decreased 24.3% and 10.6% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to lower revenues as noted above.

During the three and nine months ended March 30, 2025, the gross profit percentage decreased 490 basis points and 110 basis points, respectively, compared to the same periods of the prior year. The gross profit percentage declines were primarily within Consumer Floral and Gifts and the Gourmet Foods and Gift Baskets segments, partially offset by an increase in the Company's BloomNet segment.

**Consumer Floral & Gifts segment** - Gross profit decreased by 17.2% and 11.2% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to the impact of the lower revenues noted above, as well as the unfavorable gross profit percentage primarily attributable to higher cost of merchandise.

**BloomNet® segment** - Gross profit increased by 8.0% and decreased 8.4% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year. Gross profit increased for the three months ended March 30, 2025, compared to the prior year period, due to the aforementioned revenue increase and improved gross profit percentage driven by lower florist rebates. Gross profit decreased for the nine months ended March 30, 2025, compared to the prior year period, due to the impact of lower revenues noted above, offset in part by improved gross profit percentage driven by lower florist rebates related to lower florist-to-florist volume.

**Gourmet Foods & Gift Baskets segment** - Gross profit decreased by 38.6% and 8.2% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, due to the decrease in revenue noted above, as well as decreased gross profit percentage attributable to higher cost of merchandise and incremental costs associated with the implementation of a new order management system for the Harry & David brand.

### Marketing and sales expense

*(dollars in thousands)*

|  | Three Months Ended March 30, 2025 | March 31, 2024 | % Change | Nine Months Ended March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Marketing and sales | $106,728 | $105,828 | 0.9% | $375,828 | $376,903 | -0.3% |
| Percentage of net revenues | 32.2% | 27.9% |  | 27.9% | 25.6% |  |

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 expenses were essentially in-line with the prior year, during the three and nine months ended March 30, 2025. Marketing and sales expenses as a percentage of revenues increased over the prior year due to increased advertising costs needed to support sales due to a competitive environment.

### Technology and development expense

*(dollars in thousands)*

|  | Three Months Ended March 30, 2025 | March 31, 2024 | % Change | Nine Months Ended March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Technology and development | $14,728 | $15,291 | -3.7% | $46,340 | $45,417 | 2.0% |
| Percentage of net revenues | 4.4% | 4.0% |  | 3.4% | 3.1% |  |

30

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 decreased by 3.7% and increased 2.0% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year. The decrease for the three months ended March 30, 2025 as compared to the prior year period is related to a decline in maintenance and support for the Company's technology platform enhancements. The increase for the nine months ended March 30, 2025 as compared to the prior year period is due to higher development and consulting costs for the Company's technology platform enhancements, including incremental costs relating to the implementation of a new customer service platform and order management system.

### General and administrative expense

*(dollars in thousands)*

|  | Three Months Ended March 30, 2025 | March 31, 2024 | % Change | Nine Months Ended March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| General and administrative | $25,634 | $32,295 | -20.6% | $81,570 | $87,938 | -7.2% |
| Percentage of net revenues | 7.7% | 8.5% |  | 6.0% | 6.0% |  |

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 decreased 20.6% and 7.2% during the three and nine months ended March 30, 2025, respectively, compared to the same periods of the prior year, primarily due to lower labor costs and changes in the value of the Company’s NQDC Plan investments (offset in Other expense (income), net below), partially offset by higher insurance costs and professional fees.

### Depreciation and amortization expense

*(dollars in thousands)*

|  | Three Months Ended March 30, 2025 | March 31, 2024 | % Change | Nine Months Ended March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Depreciation and amortization | $13,119 | $13,232 | -0.9% | $40,287 | $40,578 | -0.7% |
| Percentage of net revenues | 4.0% | 3.5% |  | 3.0% | 2.8% |  |

Depreciation and amortization expense was essentially in-line with the prior year during the three and nine months ended March 30, 2025.

### Goodwill and intangible impairment

*(dollars in thousands)*

|  | Three Months Ended March 30, 2025 | March 31, 2024 | % Change | Nine Months Ended March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Goodwill and intangible impairment | $138,220 | $- | 100.0% | $138,220 | $19,762 | 599.4% |

During the quarter ended March 30, 2025, the Company recorded a non-cash goodwill and intangible impairment charge of $138.2 million, comprised of $113.4 million related to goodwill for its Consumer and Floral & Gifts segment and $24.8 million attributable to the PersonalizationMall tradename.

In fiscal 2024, based on the impairment assessment performed for the quarter ended December 31, 2023, the Company had recorded a non-cash impairment charge of $19.8 million to reduce the recorded carrying value of the PersonalizationMall tradename to its estimated fair value at that time.

See Note 6 – Goodwill and other intangibles, net in Item 1 for further information.

### Interest expense, net

*(dollars in thousands)*

|  | Three Months Ended March 30, 2025 | March 31, 2024 | % Change | Nine Months Ended March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest expense, net | $1,462 | $881 | 65.9% | $9,218 | $8,974 | 2.7% |

Interest expense, net consists primarily of interest expense and amortization of deferred financing costs attributable to the Company’s credit facility (See Note 10 – Long-term debt, net in Item 1 for details), net of income earned on the Company’s available cash balances.

Interest expense, net was higher compared to the prior year, during the three and nine months ended March 30, 2025, driven by higher interest rates, partially offset by a lower outstanding Term Loan balance.

### Other expense (income), net

*(dollars in thousands)*

|  | Three Months Ended March 30, 2025 | March 31, 2024 | % Change | Nine Months Ended March 30, 2025 | March 31, 2024 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Other expense (income), net | $1,827 | $(3,574) | 151.1% | $(1,104) | $(5,836) | 81.1% |

Other expense (income), net consists primarily of investment losses (gains) on the Company’s NQDC Plan investments (for which the offsetting expense was recorded in the general and administration expense above).

### Income Taxes

The Company recorded an income tax benefit of $18.5 million and $9.4 million during the three and nine months ended March 30, 2025, respectively, compared to an income tax benefit of $8.3 million and income tax expense of $7.8 million during the three and nine months ended March 31, 2024, respectively. The Company’s effective tax rate for the three and nine months ended March 30, 2025 was 9.4% and 5.9%, respectively, compared to 33.0% and 34.7% in the same respective periods of the prior year. The Company’s effective tax rate for the three and nine months ended March 30, 2025 differed from the U.S. federal statutory rate of 21.0% primarily due to establishing a valuation allowance on certain federal and state deferred tax assets (including charitable contribution carryforwards) and the permanent portion of goodwill impairment charges. The Company’s effective tax rate for the three and nine months ended March 30, 2025 was also impacted by state income taxes and tax deficiencies (shortfalls) from stock-based compensation, partially offset by tax credits. The Company’s effective tax rate for the three and nine months ended March 31, 2024 differed from the U.S. federal statutory rate of 21.0% primarily due to impairment charges reducing the amount of income reflected in the Company’s estimated annual effective tax rate. Further impacting the Company's effective tax rate for the three and nine months ended March 31, 2024 were tax deficiencies (shortfalls) from stock-based compensation, state income taxes and non-deductible executive compensation, partially offset by tax credits.

### 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 10 – Long-term debt, net in Item 1 for details). At March 30, 2025, the Company had working capital of $108.1 million, including cash and cash equivalents of $84.7 million, compared to working capital of $157.9 million, including cash and cash equivalents of $159.4 million, at June 30, 2024.

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.

During the first two quarters of fiscal 2025, the Company borrowed under its revolving credit facility in order to fund pre-holiday manufacturing and inventory procurement requirements, with borrowings peaking at $110.0 million in November 2024. Cash generated from operations during the Christmas holiday shopping season enabled the Company to repay the borrowings under its revolving credit facility in December 2024. Based on current projected cash flows, the Company believes that the available cash balances will be sufficient to provide for the Company's operating needs through the remainder of fiscal 2025, at which time the Company would again expect to borrow against its revolving credit facility to fund pre-holiday manufacturing and inventory purchases. The Company had no amounts outstanding under the Revolver as of March 30, 2025. In addition, during the second quarter of fiscal 2025, the Company made a payment of $27.5 million on its Term Loan, which includes a $25.0 million prepayment.

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 provided by operating activities of $0.7 million, for the nine months ended March 30, 2025, was primarily attributable to the Company’s net loss during the period adjusted for non-cash charges for goodwill and intangible impairment, depreciation and amortization, stock-based compensation, and deferred income taxes, offset by uses of cash for working capital purposes, comprised of decreases in accounts payable and accrued expenses and increases in trade receivables, offset by decreases in inventory.

Net cash used in investing activities of $35.4 million, for the nine months ended March 30, 2025, was attributable to capital expenditures primarily related to the Company's technology and automation initiatives, and the acquisition of Scharffen Berger as noted above.

Net cash used in financing activities of $40.0 million, for the nine months ended March 30, 2025, related primarily to net repayment of bank borrowings under the Company's working capital line of credit, as well as payments of $30.0 million on the Company's Term Loan, which included a $25.0 million prepayment, and the repurchase of common stock of $9.9 million.

#### Free Cash Flow

Free cash flow was negative $31.7 million for the nine months ended March 30, 2025, compared with free cash flow of positive $73.6 million for the nine months ended March 31, 2024. The decrease of $105.3 million was primarily driven by a decrease in cash flows from operations, which in turn was primarily driven by lower net income, adjusted for non-cash items, as well as timing of changes in working capital. Refer to "Definitions of non-GAAP Financial Measures" for reconciliation of non-GAAP results to applicable GAAP results.

### Stock Repurchase Program

See Item 2 in Part II below for details.

### Contractual Obligations

At March 30, 2025, the Company’s contractual obligations consist of:

- Long-term debt obligations - payments due under the Company's credit agreement (see Note 10 – Long-term debt, net in Item 1 for details and payments due by period).
- Operating lease obligations - payments due under the Company’s operating leases (see Note 8 – 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.

*(in thousands)*

|  | Payments due by period Remaining Fiscal 2025 | Fiscal 2026 | Fiscal 2027 | Fiscal 2028 | Fiscal 2029 | Thereafter | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Purchase commitments | $64,179 | $57,242 | $9,342 | $5,415 | $3,801 | $88 | $140,067 |

### Critical Accounting Estimates

As disclosed in the Company’s *Annual Report on Form 10-K for the fiscal year ended June 30, 2024*, 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 June 30, 2024, except as noted below:

### Goodwill & Intangible Assets Assessment and Impairment

#### Interim Impairment Evaluation

During the quarter ended March 30, 2025, the Company evaluated whether events or circumstances had changed such that it was more likely than not that the fair value of its goodwill, intangible and other long-lived assets were less than their carrying amounts. After consideration of current operating results, changes in macro-economic conditions, and a decline in the Company’s market capitalization, the Company concluded that a triggering event had occurred for its Consumer Floral & Gifts reporting unit. As such, the Company performed an impairment test of the reporting unit’s goodwill, intangibles and long-lived assets as of March 30, 2025.

#### Impairment Assessments – Goodwill and Intangibles

The Company performed its goodwill impairment test by comparing the fair value of its Consumer Floral and Gifts reporting unit to its respective carrying value. The Company estimated the fair value of the Consumer Floral and Gifts reporting unit using an equal weighting of the income and market approaches, and a discount rate of 14.5%. The Company used industry accepted valuation models and set criteria that were reviewed and approved by various levels of management. Under the income approach, the Company used a discounted cash flow methodology that required management to make significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, perpetual growth rates, and long-term discount rates, among others. For the market approach, the Company used the guideline public company method. Under this method, the Company utilized information from comparable publicly traded companies with similar operating and investment characteristics as the reporting units, to create valuation multiples that were applied to the operating performance of the reporting unit being tested, in order to obtain their respective fair values. The Company also reconciled the aggregate fair values of its reporting units to its current market capitalization.

The Company’s impairment test for indefinite-lived intangible assets encompassed calculating a fair value of the indefinite-lived intangible asset and comparing that result to its carrying value. To determine fair value of indefinite-lived intangible assets, the Company used an income approach, the relief-from-royalty method. This method assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to obtain the rights to use the comparable asset. Indefinite-lived intangible assets’ fair values require significant judgments in determining both the assets’ estimated cash flows as well as the appropriate discount and royalty rates applied to those cash flows to determine fair value.

The Company’s impairment test for definite-lived and other long-lived assets was performed through a recoverability test, comparing projected undiscounted cash flows from the use and eventual disposition of the asset or asset group to its carrying value.

Based on the impairment assessment performed for the period ended March 30, 2025, the Company recorded a non-cash goodwill and intangible impairment charge of $138.2 million, comprised of $113.4 million attributable to goodwill and $24.8 million attributable to the PersonalizationMall tradename within the same reporting unit. The Company concluded that definite-lived and other long-lived assets of the reporting unit were not impaired.

### Income Taxes

#### Realizability of Deferred Tax Assets

During the quarter ended March 30, 2025, in assessing the realizability of deferred tax assets in accordance with ASC 740, management considered both positive and negative evidence. As of the reporting date, the Company was in a three-year cumulative loss position, which is considered significant negative evidence under the accounting standards. The Company has not developed any tax planning strategies that would provide an additional source of taxable income, and the goodwill and intangible impairment charge that was recorded during the quarter ended March 30, 2025 reduced the previously available deferred tax liabilities that had been relied upon to support the realization of deferred tax assets. As a result, the Company concluded that it was not more likely than not that a portion of its deferred tax assets will be realized and included a $24.9 million valuation allowance in its projected annual effective tax rate. In addition, the Company placed a specific valuation allowance of $3.4 million on its charitable contribution carryforward as a discrete item in the third quarter of fiscal 2025. As of March 30, 2025, the Company had valuation allowances of approximately $26.7 million, of which $20.5 million was recorded during the three months ended March 30, 2025, primarily related to net operating losses, charitable contributions, and deferred tax assets that are not more likely than not realizable. The Company will continue to monitor all relevant factors in evaluating the need for a valuation allowance and will reassess its position in future reporting periods as facts and circumstances evolve.

### 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.

### 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,” "should," “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:
- to achieve revenue and profitability;
- to leverage its operating platform and reduce operating expenses;
- to manage the seasonality of its business;
- to cost effectively acquire and retain customers;
- to successfully integrate acquired businesses and assets;
- to reduce working capital requirements and capital expenditures;
- to mitigate the impact of supply chain cost and capacity constraints;
- to compete against existing and new competitors;
- to manage expenses associated with sales and marketing and necessary general and administrative and technology investments;
- to address the effects of changes in accounting policies, practices, or assumptions, including changes that could potentially require future impairment charges;
- to successfully execute its strategic initiatives; and
- to reduce promotional activities and achieve more efficient marketing programs.
- 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, imported products, 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 June 30, 2024* 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.

## Market risk

As filed, 799 characters.

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 $0.2 million and $0.7 million during the three and nine months ended March 30, 2025, respectively.

## Controls and procedures

As filed, 1,403 characters.

#### 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 March 30, 2025. 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 March 30, 2025.

#### 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 March 30, 2025, 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.

## Risk factors

As filed, 192 characters.

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 fiscal year ended June 30, 2024.*

Filed May 9, 2025.
Source: SEC EDGAR, the filing index for accession 0001084869-25-000007. Last ingested by Listed: Nov 6, 2026, 12:19 ET. No prices; not investment advice.