1-800-Flowers.Com Inc Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Kupinski - NOBLE Capital Markets, Inc. - Analyst : A couple of questions. Regarding your marketing, I know that you said that some of it has been ineffective. And I was just wondering, is it a change in like the use of technology that's causing that? For instance, I know that there's been a decline in search traffic on the likes of Google and so forth. And I was just wondering if there was a dynamic shift in the use of the way that people use technology, given AI-driven and voice type search use. And I was just wondering if that's what you're referring to in terms of the ineffective marketing. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Michael Kupinski - NOBLE Capital Markets, Inc. - Analyst : Got you. And can you talk a little bit about the competitive dynamic in Consumer Floral? Is there like a bad actor there? Or is it just general competition? Just wondering if you could just kind of add some color there. Adolfo Villagomez - 1-800-Flowers.Com Inc - Chief Executive Officer I wouldn't say there is a bad actor. I think I would go towards more general competition. We need to become more agile. And as I mentioned in the call, I think today, we are in an environment in which we manage products, and we are trying to sell them on our website -- on our e-commerce property. And as I mentioned before, everything starts with the customer, and the customers are buying now in different channels. So you need to have your products where the customers are, and that is impacting our business in the short term because we were not agile to go into these other channels. But as we speak, we're expanding into other channels to actually drive sales. We're in the process of expanding our products to other delivery platforms to marketplaces and other opportunity areas. You're talking about flowers, but if I expand into Harry & David and some of our other brands, physical retail is also important, and we are moving there and other retailers. We are trying to drive the company to separate product, brand from channels. It doesn't mean that they need to be the same, but you have products that can be sold using different brands and products that can be sold through different channels. So we're looking at this end-to-end. And as I said, I think the number 1 focus here is let's offer our products wherever the customers are already buying them.

Question: Anthony Lebiedzinski - Sidoti & Company - Analyst : So first question just in terms of the quarter here. Can you comment on sales for the major holidays like Easter and Mother's Day versus everyday gifting? Did you see the same kind of bifurcation between the 2? Just wondering if you can comment on that. James Langrock - 1-800-Flowers.Com Inc - Chief Financial Officer So on the Mother's Day holiday, that came in line with what we were forecasting. It was obviously down on a year-over-year basis. But that -- one of the things that we did, as you recall, back in Valentine's Day, Anthony, we were investing heavily in marketing to try to drive top line. So from a Mother's Day perspective, we pulled back on getting back to what Adolfo mentioned on the variable contribution margin we're more focused on variable contribution margin and not driving unprofitable sales. So Mother's Day was down year-over-year and came in line with our expectations.

Question: Anthony Lebiedzinski - Sidoti & Company - Analyst : Got it. And so I guess my last question before I pass it on to others. So as you look to execute your strategy, how do we think about CapEx spending for this year? It does sound like you are also looking to perhaps bring back some physical retail stores. I know a few years ago, you guys closed pretty much all of your Harry & David stores. I don't know if you would be looking to reconsider that decision. And -- but just maybe help us understand how do you guys think about CapEx spending as you look to execute this strategy here? James Langrock - 1-800-Flowers.Com Inc - Chief Financial Officer So Anthony, this is James. So from a CapEx perspective, we had the big implementation of OMS last year. So right now, we're not giving guidance, but we believe CapEx will be slightly down this year from last year. But included in that is our investment in some of the physical retail locations. So that's already included in that. So we do have CapEx set aside for the expansion into some Harry & David and Things Remembered locations.

Question: Doug Lane - Water Tower Research - Analyst : Staying on the retail stores, you did open that Long Island store earlier this year. Can you give us an update on what you've learned there and how that's going to impact your strategy going forward and maybe opening additional retail stores? Adolfo Villagomez - 1-800-Flowers.Com Inc - Chief Executive Officer So let me separate the question from two perspectives. Like number one, as I mentioned, I think in the midterm, we believe that expanding our channels is fundamental to our strategy, and that includes physical retail. This year, as you probably saw in the announcement, we are going to have three pop-up stores at Macy's, five in malls and for Harry & David and -- one for Things Remembered. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Doug Lane - Water Tower Research - Analyst : So the way I understand it then there could be two paths here as you expand beyond e-commerce. One is Harry and David and Things Remembered branded stores, whether they're stand-alone like in Long Island or whether they're in the mall? Or would you also pursue on a parallel track, permanent placement in Macy's and other department stores? Would you go to mass merchants? Just a little bit more granularity on where in retail you think the brand can go. Adolfo Villagomez - 1-800-Flowers.Com Inc - Chief Executive Officer I would say all of the above, and that's what we are experimenting. And I would go beyond physical retail into also digital, including marketplaces and on-demand delivery. The way we're thinking about it is wherever the customer is, we have products for them. We -- as I mentioned, it's -- I

Question: Doug Lane - Water Tower Research - Analyst : Your comment about self-consumption makes a lot of sense to me. I know that you are positioned as a gifting platform, but certainly, a lot of that product will be ripe for self-consumption. Do you have any data yet on what you think your current percentage of sales are that go to self-consumption versus gifting? Adolfo Villagomez - 1-800-Flowers.Com Inc - Chief Executive Officer I would say it varies by brand. It's a lot higher on Harry & David, lower in Flowers and lower in Tmall. Honestly, though, part of this is self-inflicted. One of the things that merchants are working on, on 1-800-FLOWERS is to tailor the assortment for self-consumption, e.g. something as simple as selling flowers without the vase. If you're buying flowers for your house, you are not buying vases, you just want the flowers. Launching a subscription model, we're experimenting with all of these things. But today, naturally, the products and the brands that we have acquired over the years that are sitting under the umbrella of Harry & David are tailored for self-consumption. We have cookies, we have coffee, we have chocolate. We're about to launch olive oil and vinegar. I mean we have a lot of things that you can find on your average retail store. And as I said also, we are planning to have our own stores. So that's what we are unlocking here. I think in the past, we had this approach of, oh, it's our brand and it needs to be sold on our website. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.