1-800-Flowers.com Reports 5.7% Revenue Decline in Q2 Fiscal 2025

1-800-Flowers.com, Inc. reported a decline in financial performance for the second quarter of fiscal 2025, with net revenues of $775.5 million, a decrease of 5.7% compared to $822.1 million in the same period last year. For the six months ended December 29, 2024, revenues also fell by 6.7% to $1.018 billion from $1.091 billion. The company's gross profit for the quarter was $335.6 million, down 5.7% from $355.7 million a year earlier, while the gross profit margin remained stable at 43.3%. Net income for the quarter increased slightly to $64.3 million, or $1.00 per diluted share, compared to $62.9 million, or $0.97 per diluted share, in the prior year.

The decline in revenues was attributed to lower e-commerce order volumes across the company's segments, reflecting ongoing macroeconomic pressures that have led consumers to moderate discretionary spending. The implementation of a new order management system for the Harry & David brand negatively impacted sales by approximately $20 million. Despite these challenges, the company saw a 17.4% increase in other revenues, primarily driven by higher wholesale demand from big box retailers.

Strategically, 1-800-Flowers.com made two acquisitions during the fiscal year: Scharffen Berger, a chocolate manufacturer, and Card Isle, an e-commerce greeting card company. The acquisition of Scharffen Berger, completed on July 1, 2024, was valued at approximately $3.3 million, while Card Isle was acquired for $3.6 million on April 3, 2024. These acquisitions are expected to enhance the company's product offerings in the gourmet foods and greeting card segments, respectively.

Operationally, the company reported a decrease in customer engagement, with approximately 7.4 million orders fulfilled in the second quarter, down 7.2% year-over-year. The average order value also declined slightly to $92.02. The company’s total assets increased to $1.138 billion as of December 29, 2024, up from $1.033 billion at the end of the previous fiscal year, driven by higher cash reserves and trade receivables. The company’s cash and cash equivalents stood at $247.2 million, compared to $159.4 million at the end of June 2024.

Looking ahead, 1-800-Flowers.com has updated its fiscal 2025 guidance, expecting total revenues to decline in the mid-single digits compared to the previous year. The company anticipates improved revenue trends as the fiscal year progresses, supported by its Relationship Innovation initiatives aimed at expanding product offerings and enhancing user experience. Adjusted EBITDA is projected to be in the range of $65 million to $75 million, with free cash flow expected between $25 million and $35 million.