1-800-FLOWERS.COM (FLWS) Q2 2025 earnings summary

Executive summary

• Q2 revenue declined 5.7% year-over-year to $775.5M, driven by softer consumer demand, reduced corporate gifting, and significant challenges with the new Harry & David Order Management System (OMS) during the holiday peak.

• Adjusted EBITDA was $116.3M, down from $130.1M in the prior year; net income for the quarter was $64.3M.

• OMS implementation issues led to order processing bottlenecks, cancellations, and an estimated $20M in lost e-commerce revenue and $4.8M in incremental costs.

• Efficiency and cost-cutting initiatives are underway to improve operational performance and fund technology investments.

• Acquisitions of Scharffen Berger and Card Isle expanded product offerings but had immaterial revenue impact.

Financial highlights

• E-commerce revenue declined 8.3% for the quarter; other revenues rose 17.4% due to higher wholesale volumes.

• Gross margin was 43.3%, flat year-over-year; adjusted operating expenses declined by $2.9M to $239M.

• Net income for the quarter was $64.3M ($1.00/share); adjusted net income per share was $1.08, down from $1.27 last year.

• Free cash flow for the six months was $128.3M, down from $195.0M in the prior year.

• Cash and equivalents at quarter-end were $247.2M; term debt was $157.5M, with a $25M prepayment on the term loan.

Outlook and guidance

• Fiscal 2025 full-year revenue expected to decline mid-single digits.

• Adjusted EBITDA guidance for fiscal 2025 is $65–75M; free cash flow expected at $25–35M.

• Management anticipates revenue trends to improve as the year progresses, driven by expanded offerings and operational initiatives.