1-800-FLOWERS.COM (FLWS) investor relations material

Executive summary

• Q2 2026 revenue was $702.2 million, down 9.5% year-over-year, reflecting a focus on marketing efficiency and profitability.

• Net income rose to $70.6 million ($1.10 per diluted share), while adjusted net income increased to $76.7 million ($1.20 per share).

• Organizational restructuring and cost-optimization improved efficiency, reduced costs, and enhanced collaboration.

• Leadership changes, including a new CIO, support technology modernization and AI initiatives.

• Pop-up store pilots were discontinued due to low returns; focus shifts to permanent retail concepts.

Financial highlights

• Gross margin declined 120 basis points to 42.1% due to lower sales and higher costs.

• Adjusted EBITDA was $98.1 million, down from $116.3 million year-over-year.

• Free cash flow for the six months was $156.6 million, up from $128.3 million in the prior year.

• Operating expenses decreased by $23.4 million to $221.1 million, mainly from reduced marketing and labor costs.

• Cash and equivalents at quarter-end were $193.3 million.

Outlook and guidance

• Revenue for the second half of fiscal 2026 is expected to decline in the low double-digit range year-over-year.

• Adjusted EBITDA for the second half is projected to decline slightly, but to increase slightly on a normalized basis excluding $12 million in incentive and consultant costs.

• Ongoing cost optimization and organizational streamlining are expected to offset top-line pressure.

• Management expects available cash balances to be sufficient for operating needs through fiscal 2026.

• Strategic focus remains on sustainable revenue and profit growth, with continued investment in technology and efficiency.