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 29, 2025. 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 29, 2025 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 thoughtful expressions designed to help inspire customers to give 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®, PersonalizationMall.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®, a manufacturer of gift baskets and towers; 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 29, 2025.
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Fiscal 2026
The Company is approaching fiscal 2026 as a pivotal period of foundation setting. By transforming the Company into a customer-centric, data-driven organization with clear objectives and return on investment-focused decision making, the Company aims to position itself to fuel future growth.
The Company's strategic priorities are focused on positioning the organization for long-term growth. These priorities include:
•driving cost savings and organizational efficiency,
•building a customer-centric and data-driven organization,
•broadening our reach beyond our e-commerce sites into new channels, and
•strengthening our team through enhanced talent and accountability.
With a renewed commitment to agility and customer-centricity, the Company believes these foundational steps will set the stage for sustainable revenue and profit growth in the years to come.
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-related items 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.
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The following table presents EBITDA and Adjusted EBITDA:
Reconciliation of net loss to Adjusted EBITDA (non-GAAP): Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025
(in thousands)
Net loss $ (100,064) $ (178,244) $ (82,468) $ (148,086)
Add: Interest expense and other, net 5,301 3,289 11,479 8,114
Add: Depreciation and amortization 12,907 13,119 39,378 40,287
Add: Income tax expense (benefit) 206 (18,475) 244 (9,362)
EBITDA (81,650) (180,311) (31,367) (109,047)
Add: Stock-based compensation 2,888 2,998 7,495 9,106
Add: Compensation charge related to NQDC Plan investment (depreciation) appreciation (3,126) (1,849) 1,076 1,024
Add: System implementation costs - 5,314 - 13,401
Add: Goodwill and intangible impairment 45,154 138,220 45,154 138,220
Add: Restructuring cost/Severance 5,510 708 11,589 708
Adjusted EBITDA $ (31,224) $ (34,920) $ 33,947 $ 53,412
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 loss and adjusted net loss per common share:
Reconciliation of net loss to adjusted net loss (non-GAAP): Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025
(in thousands, except for per share data)
Net loss $ (100,064) $ (178,244) $ (82,468) $ (148,086)
Adjustments to reconcile net loss to adjusted net loss (non-GAAP)
Add: System implementation costs - 5,314 - 13,401
Add: Restructuring cost/Severance 5,510 708 11,589 708
Add: Goodwill and intangible impairment 45,154 138,220 45,154 138,220
Deduct: Income tax effect on adjustments (181) (10,931) (152) (12,933)
Adjusted net loss (non-GAAP) $ (49,581) $ (44,933) $ (25,877) $ (8,690)
Basic and diluted net loss per common share $ (1.56) $ (2.80) $ (1.29) $ (2.32)
Basic and diluted adjusted net loss per common share (non-GAAP) $ (0.77) $ (0.71) $ (0.41) $ (0.14)
Weighted average shares used in the calculation of basic and diluted net loss and adjusted net loss per common share 64,068 63,598 63,838 63,877
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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 segment 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 these measures by looking at other GAAP measures, such as Operating income (loss) and Net income (loss).
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The following tables present the net revenues, gross profit, segment contribution margin, and adjusted segment contribution margin from each of the Company’s business segments:
Three Months Ended
March 29, 2026 Restructuring Cost / Severance Goodwill and Intangible Impairment As Adjusted(non-GAAP)March 29, 2026 March 30, 2025 System Implementation Costs Restructuring Cost / Severance Goodwill and Intangible Impairment As Adjusted(non-GAAP)March 30, 2025 % Change
(dollars in thousands)
Net revenues:
Consumer Floral & Gifts $ 159,443 $ - $ - $ 159,443 $ 196,030 $ - $ - $ - $ 196,030 -18.7 %
BloomNet 26,875 - - 26,875 28,552 - - - 28,552 -5.9 %
Gourmet Foods & Gift Baskets 106,946 - - 106,946 107,088 - - - 107,088 -0.1 %
Corporate 50 - - 50 69 - - - 69 -27.5 %
Intercompany eliminations (300) - - (300) (285) - - - (285) -5.3 %
Total net revenues $ 293,014 $ - $ - $ 293,014 $ 331,454 $ - $ - $ - $ 331,454 -11.6 %
Gross profit:
Consumer Floral & Gifts $ 60,649 $ - $ - $ 60,649 $ 72,045 $ - $ - $ - $ 72,045 -15.8 %
38.0 % 38.0 % 36.8 % 36.8 %
BloomNet 12,471 - - 12,471 13,399 - - - 13,399 -6.9 %
46.4 % 46.4 % 46.9 % 46.9 %
Gourmet Foods & Gift Baskets 24,159 - - 24,159 19,436 4,633 - - 24,069 0.4 %
22.6 % 22.6 % 18.1 % 22.5 %
Corporate 18 - - 18 119 - - - 119 -84.9 %
36.0 % 36.0 % 172.5 % 172.5 %
Total gross profit $ 97,297 $ - $ - $ 97,297 $ 104,999 $ 4,633 $ - $ - $ 109,632 -11.3 %
33.2 % 33.2 % 31.7 % 33.1 %
EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
Consumer Floral & Gifts $ (36,351) $ 1,553 $ 45,154 $ 10,356 $ (131,690) $ - $ - $ 138,220 $ 6,530 58.6 %
BloomNet 7,427 33 - 7,460 8,472 - 33 - 8,505 -12.3 %
Gourmet Foods & Gift Baskets (18,738) 2,912 - (15,826) (27,802) 5,314 181 - (22,307) 29.1 %
Segment Contribution Margin Subtotal (47,662) 4,498 45,154 1,990 (151,020) 5,314 214 138,220 (7,272) 127.4 %
Corporate (b) (33,988) 1,012 - (32,976) (29,291) - 494 - (28,797) -14.5 %
EBITDA (non-GAAP) (81,650) 5,510 45,154 (30,986) (180,311) 5,314 708 138,220 (36,069) 14.1 %
Add: Stock-based compensation 2,888 - - 2,888 2,998 - - - 2,998 -3.7 %
Add: Compensation charge related to NQDC Plan investment (depreciation) appreciation (3,126) - - (3,126) (1,849) - - - (1,849) -69.1 %
Adjusted EBITDA (non-GAAP) (c) $ (81,888) $ 5,510 $ 45,154 $ (31,224) $ (179,162) $ 5,314 $ 708 $ 138,220 $ (34,920) 10.6 %
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Nine Months Ended
March 29, 2026 Restructuring Cost / Severance Goodwill and Intangible Impairment As Adjusted(non-GAAP)March 29, 2026 March 30, 2025 System Implementation Costs Restructuring Cost / Severance Goodwill and Intangible Impairment As Adjusted(non-GAAP)March 30, 2025 % Change
(dollars in thousands)
Net revenues:
Consumer Floral & Gifts $ 456,118 $ - $ - $ 456,118 $ 565,559 $ - $ - $ - $ 565,559 -19.4 %
BloomNet 72,124 - - 72,124 74,464 - - - 74,464 -3.1 %
Gourmet Foods & Gift Baskets 682,719 - - 682,719 709,545 - - - 709,545 -3.8 %
Corporate 207 - - 207 271 - - - 271 -23.6 %
Intercompany eliminations (775) - - (775) (803) - - - (803) 3.5 %
Total net revenues $ 1,210,393 $ - $ - $ 1,210,393 $ 1,349,036 $ - $ - $ - $ 1,349,036 -10.3 %
Gross profit:
Consumer Floral & Gifts $ 177,150 $ - $ - $ 177,150 $ 224,262 $ - $ - $ - $ 224,262 -21.0 %
38.8 % 38.8 % 39.7 % 39.7 %
BloomNet 34,768 - - 34,768 36,551 - - - 36,551 -4.9 %
48.2 % 48.2 % 49.1 % 49.1 %
Gourmet Foods & Gift Baskets 257,374 - - 257,374 271,670 6,625 - - 278,295 -7.5 %
37.7 % 37.7 % 38.3 % 39.2 %
Corporate 233 - - 233 428 - - - 428 -45.6 %
112.6 % 112.6 % 157.9 % 157.9 %
Total gross profit $ 469,525 $ - $ - $ 469,525 $ 532,911 $ 6,625 $ - $ - $ 539,536 -13.0 %
38.8 % 38.8 % 39.5 % 40.0 %
EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
Consumer Floral & Gifts $ (16,314) $ 2,661 $ 45,154 $ 31,501 $ (105,159) $ - $ - $ 138,220 $ 33,061 -4.7 %
BloomNet 19,526 281 - 19,807 22,773 - 33 - 22,806 -13.2 %
Gourmet Foods & Gift Baskets 71,375 4,725 - 76,100 67,222 10,393 181 - 77,796 -2.2 %
Segment Contribution Margin Subtotal 74,587 7,667 45,154 127,408 (15,164) 10,393 214 138,220 133,663 -4.7 %
Corporate (b) (105,954) 3,922 - (102,032) (93,883) 3,008 494 - (90,381) -12.9 %
EBITDA (non-GAAP) (31,367) 11,589 45,154 25,376 (109,047) 13,401 708 138,220 43,282 -41.4 %
Add: Stock-based compensation 7,495 - - 7,495 9,106 - - - 9,106 -17.7 %
Add: Compensation charge related to NQDC Plan investment appreciation 1,076 - - 1,076 1,024 - - - 1,024 5.1 %
Adjusted EBITDA (non-GAAP) (c) $ (22,796) $ 11,589 $ 45,154 $ 33,947 $ (98,917) $ 13,401 $ 708 $ 138,220 $ 53,412 -36.4 %
(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 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 are included within corporate expenses as they are not directly allocable to a specific segment.
(c) See reconciliation of the Company's net loss to Adjusted EBITDA (non-GAAP) above.
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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:
Nine Months Ended
March 29, 2026 March 30, 2025
(in thousands)
Net cash provided by operating activities $ 42,860 $ 706
Capital expenditures (22,837) (32,431)
Free cash flow $ 20,023 $ (31,725)
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Results of Operations
Net revenues
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Net revenues:
E-commerce $ 249,790 $ 291,758 -14.4 % $ 1,014,470 $ 1,162,258 -12.7 %
Other 43,224 39,696 8.9 % 195,923 186,778 4.9 %
Total net revenues $ 293,014 $ 331,454 -11.6 % $ 1,210,393 $ 1,349,036 -10.3 %
Net revenues consist primarily of the selling price of the merchandise, service and outbound shipping charges, less discounts, returns and credits.
Net revenues decreased 11.6% and 10.3% during the three and nine months ended March 29, 2026, respectively, mainly due to a focus on marketing effectiveness and profitability being prioritized over near-term revenue growth, offset in part by increased wholesale volume.
Three Months Ended
Consumer Floral & Gifts BloomNet Gourmet Foods & Gift Baskets Corporate and Eliminations Consolidated
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Net revenues
E-commerce $ 157,356 $ 194,048 -18.9 % $ - $ - - $ 92,434 $ 97,710 -5.4 % $ - $ - $ 249,790 $ 291,758 -14.4 %
Other 2,087 1,982 5.3 % 26,875 28,552 -5.9 % 14,512 9,378 54.7 % (250) (216) 43,224 39,696 8.9 %
Total net revenues $ 159,443 $ 196,030 -18.7 % $ 26,875 $ 28,552 -5.9 % $ 106,946 $ 107,088 -0.1 % $ (250) $ (216) $ 293,014 $ 331,454 -11.6 %
Other revenues detail
Retail and other 2,087 1,982 5.3 % - - - 1,819 1,580 15.1 % - - 3,906 3,562 9.7 %
Wholesale - - - 12,086 13,249 -8.8 % 12,693 7,798 62.8 % - - 24,779 21,047 17.7 %
BloomNet services - - - 14,789 15,303 -3.4 % - - - - - 14,789 15,303 -3.4 %
Corporate - - - - - - - - - 50 69 50 69 -27.5 %
Eliminations - - - - - - - - - (300) (285) (300) (285) -5.3 %
Total other revenues $ 2,087 $ 1,982 5.3 % $ 26,875 $ 28,552 -5.9 % $ 14,512 $ 9,378 54.7 % $ (250) $ (216) $ 43,224 $ 39,696 8.9 %
Nine Months Ended
Consumer Floral & Gifts BloomNet Gourmet Foods & Gift Baskets Corporate and Eliminations Consolidated
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Net revenues
E-commerce $ 450,976 $ 560,106 -19.5 % $ - $ - - $ 563,494 $ 602,152 -6.4 % $ - $ - $ 1,014,470 $ 1,162,258 -12.7 %
Other 5,142 5,453 -5.7 % 72,124 74,464 -3.1 % 119,225 107,393 11.0 % (568) (532) 195,923 186,778 4.9 %
Total net revenues $ 456,118 $ 565,559 -19.4 % $ 72,124 $ 74,464 -3.1 % $ 682,719 $ 709,545 -3.8 % $ (568) $ (532) $ 1,210,393 $ 1,349,036 -10.3 %
Other revenues detail
Retail and other 5,142 5,453 -5.7 % - - - 9,002 7,923 13.6 % - - 14,144 13,376 5.7 %
Wholesale - - - 31,625 31,932 -1.0 % 110,223 99,470 10.8 % - - 141,848 131,402 7.9 %
BloomNet services - - - 40,499 42,532 -4.8 % - - - - - 40,499 42,532 -4.8 %
Corporate - - - - - - - - - 207 271 207 271 -23.6 %
Eliminations - - - - - - - - - (775) (803) (775) (803) 3.5 %
Total other revenues $ 5,142 $ 5,453 -5.7 % $ 72,124 $ 74,464 -3.1 % $ 119,225 $ 107,393 11.0 % $ (568) $ (532) $ 195,923 $ 186,778 4.9 %
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Revenue by sales channel:
E-commerce revenues (combined online and telephonic) decreased 14.4% and 12.7% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year, primarily due to the decline in demand in the Consumer Floral & Gifts segment of 18.9% and 19.5%, respectively.
During the three and nine months ended March 29, 2026, the Company fulfilled approximately 3.0 million and 11.2 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of 18.5% and 16.6%, respectively, compared to the same periods of the prior year. During the three and nine months ended March 29, 2026, the average order value increased 5.0% and 4.6% to $83.39 and $90.49, respectively, compared to the same periods of 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 and nine months ended March 29, 2026 increased 8.9% and 4.9%, respectively, compared to the same periods of the prior year, primarily due to higher wholesale volume within the Gourmet Foods & Gift Baskets segment due to increased orders from big box retailers.
Revenue by segment:
Consumer Floral & Gifts – this segment, which includes the operations of the 1-800-Flowers.com®, Personalization Mall®, and Things Remembered® brands, derives revenues 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 decreased 18.7% and 19.4% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year, due to a focus on marketing effectiveness and profitability being prioritized over near-term revenue growth.
During the three and nine months ended March 29, 2026, Consumer Floral & Gifts orders through the Company's e-commerce sales channel (online and telephonic sales) decreased 24.3% and 23.4%, respectively, compared to the same periods of the prior year. In addition, during the three and nine months ended March 29, 2026, the average order value increased 7.1% and 5.1%, respectively, compared to the same periods of the prior year.
BloomNet® - revenues in this segment are derived from membership fees, as well as other product and service offerings.
Net revenues decreased 5.9% and 3.1% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year. The revenue decrease was primarily due to lower membership and wholesale revenues primarily from lower network order volumes and lower directory revenue.
Gourmet Foods & Gift Baskets - this segment includes the operations of Harry & David®, Wolferman’s Bakery®, Cheryl’s Cookies®, The Popcorn Factory®, 1-800-Baskets.com®/DesignPac®, Shari’s Berries®, Vital Choice®, and 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 0.1% and 3.8% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year, primarily due to lower e-commerce revenue due to a focus on marketing effectiveness and profitability being prioritized over near-term revenue growth, partially offset by higher wholesale volume due to increased orders from big box retailers.
During the three and nine months ended March 29, 2026, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 8.0% and 8.3%, respectively, compared to the same periods of the prior year. In addition, the average order value for the three and nine months ended March 29, 2026 increased 2.8% and 2.1%, respectively, compared to the same periods of the prior year.
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Gross profit
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Gross profit $ 97,297 $ 104,999 -7.3 % $ 469,525 $ 532,911 -11.9 %
Gross profit % 33.2 % 31.7 % 38.8 % 39.5 %
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 7.3% and 11.9% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year, primarily due to lower revenues as noted above.
During the three and nine months ended March 29, 2026, the gross profit percentage increased 150 basis points and decreased 70 basis points, respectively, compared to the same periods of the prior year.
Consumer Floral & Gifts segment - Gross profit decreased by 15.8% and 21.0% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year, due to the impact of the lower revenues noted above, as well as an unfavorable gross profit percentage during the nine months ended March 29, 2026 compared to the same period of the prior year primarily attributable to deleveraging on the sales decline and increased fulfillment and tariff costs. Gross profit percentage was favorable during the three months ended March 29, 2026, due to increased pricing discipline, more targeted promotional activity, and better alignment between florist-fulfilled and direct shipment offerings, offset in part by higher tariff costs.
BloomNet® segment - Gross profit decreased by 6.9% and 4.9% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year, primarily due to the impact of the lower revenues noted above. The decline for the nine months ended March 29, 2026 was also due to an unfavorable gross profit percentage primarily due to higher fulfillment costs and a less favorable mix between wholesale and service revenue, which impacted the nine-month period.
Gourmet Foods & Gift Baskets segment - Gross profit increased by 24.3% and decreased by 5.3% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year. The increase in gross profit for the three months ended March 29, 2026 compared to the prior year period was due to lower labor and facility costs on relatively flat revenue. The decline for the nine months ended March 29, 2026 compared to the prior year was due to the decrease in revenue noted above, as well as unfavorable gross profit percentage primarily attributable to deleveraging on the sales decline and increased tariff, commodity, and shipping costs.
Marketing and sales expense
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Marketing and sales $ 86,236 $ 106,728 -19.2 % $ 311,409 $ 375,828 -17.1 %
Percentage of net revenues 29.4 % 32.2 % 25.7 % 27.9 %
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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 decreased 19.2% and 17.1% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year and also decreased as a percentage of revenues, primarily due to a focus on marketing effectiveness and profitability.
Technology and development expense
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Technology and development $ 14,701 $ 14,728 -0.2 % $ 43,289 $ 46,340 -6.6 %
Percentage of net revenues 5.0 % 4.4 % 3.6 % 3.4 %
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 0.2% and 6.6% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year, primarily due to the prior year period, including costs related to a new customer service platform and order management system.
General and administrative expense
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
General and administrative $ 32,856 $ 25,634 28.2 % $ 101,040 $ 81,570 23.9 %
Percentage of net revenues 11.2 % 7.7 % 8.3 % 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 increased 28.2% and 23.9% during the three and nine months ended March 29, 2026, respectively, compared to the same periods of the prior year, primarily due to higher severance costs related to enterprise reductions in workforce, increased consulting costs and changes in the value of the Company's NQDC Plan investments (offset in Other expense (income), net below).
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Depreciation and amortization expense
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Depreciation and amortization $ 12,907 $ 13,119 -1.6 % $ 39,378 $ 40,287 -2.3 %
Percentage of net revenues 4.4 % 4.0 % 3.3 % 3.0 %
Depreciation and amortization expenses decreased 1.6% and 2.3% during the three and nine months ended March 29, 2026, respectively, due to timing of certain assets becoming fully depreciated.
Goodwill and intangible impairment
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Goodwill and intangible impairment $ 45,154 $ 138,220 -67.3 % $ 45,154 $ 138,220 -67.3 %
During the quarter ended March 29, 2026, the Company recorded a non-cash goodwill and intangible impairment charge of $45.2 million, comprised of $34.6 million related to goodwill for its Consumer Floral & Gifts segment and $10.6 million attributable to the Personalization Mall tradename.
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 Floral & Gifts segment and $24.8 million attributable to the Personalization Mall tradename.
See Note 6 - Goodwill, trademarks with indefinite lives and other intangibles, net in Item 1 for further information.
Interest income
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Interest income $ (1,057) $ (1,477) -28.4 % $ (1,490) $ (2,621) -43.2 %
Interest income consists of income earned on the Company’s available cash balances.
Interest income decreased 28.4% and 43.2% during the three and nine months ended March 29, 2026, respectively, due to a decline in interest earned on lower available cash balances.
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Interest expense
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Interest expense $ 3,247 $ 2,939 10.5 % $ 14,076 $ 11,839 18.9 %
Interest expense consists primarily of interest expense and amortization of deferred financing costs attributable to the Company’s credit facilities (See Note 10 - Long-term debt, net, Item 1 for details).
Interest expense increased 10.5% and 18.9% during the three and nine months ended March 29, 2026, respectively, due to an increase in borrowings and interest rates.
Other expense (income), net
Three Months Ended Nine Months Ended
March 29, 2026 March 30, 2025 % Change March 29, 2026 March 30, 2025 % Change
(dollars in thousands)
Other expense (income), net $ 3,111 $ 1,827 70.3 % $ (1,107) $ (1,104) -0.3 %
Other expense (income), net consists primarily of investment losses (gains) on the Company’s NQDC Plan investments (for which the offsetting expense or income was recorded in general and administrative expense above).
Income Taxes
The Company recorded an income tax expense of $0.2 million during both the three and nine months ended March 29, 2026, compared to income tax benefit of $18.5 million and $9.4 million during the three and nine months ended March 30, 2025, respectively. The Company’s effective tax rate for the three and nine months ended March 29, 2026 was (0.2)% and (0.3)%, respectively, compared to 9.4% and 5.9% in the same respective periods of the prior year. The Company’s effective tax rate for the three and nine months ended March 29, 2026 differed from the U.S. federal statutory rate of 21.0% primarily due to the change in valuation allowance, state income taxes and interest on uncertain tax positions. 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.
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 29, 2026, the Company had working capital of $30.6 million, including cash and cash equivalents of $50.7 million, compared to working capital of $61.3 million, including cash and cash equivalents of $46.5 million, at June 29, 2025.
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.
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During the first two quarters of fiscal 2026, the Company borrowed under its revolving credit facility in order to fund pre-holiday manufacturing and inventory procurement requirements, with borrowings peaking at $175.0 million in November 2025. Cash generated from operations during the Christmas holiday shopping season enabled the Company to repay the borrowings under the revolving credit facility in December 2025. 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 2026, at which time the Company would again expect to borrow against the revolving credit facility to fund pre-holiday manufacturing and inventory purchases. The Company had no amounts outstanding under the revolving credit facility as of March 29, 2026.
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 $42.9 million, for the nine months ended March 29, 2026, was primarily attributable to the net loss during the period, adjusted by non-cash charges for goodwill and intangible impairment, depreciation and amortization and stock based compensation, combined with changes in working capital, including decreases in inventory and prepaid and other, offset in part by an increase in trade receivables.
Net cash used in investing activities of $22.8 million, for the nine months ended March 29, 2026, was primarily attributable to capital expenditures related to the Company's technology initiatives.
Net cash used in financing activities of $15.8 million, for the nine months ended March 29, 2026, primarily related to net repayment of bank borrowings under the Company's working capital line of credit, as well as payments made on the Company's Term Loan.
Free Cash Flow
Free cash flow was $20.0 million for the nine months ended March 29, 2026, compared with free cash flow of negative $31.7 million for the nine months ended March 30, 2025. The improvement of $51.7 million was primarily due to improved working capital management. 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 29, 2026, 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 long-term operating leases (see Note 8 – Leases in Item 1 for details).
•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.
Payments due by period
(in thousands)
Remaining Fiscal 2026 Fiscal 2027 Fiscal 2028 Fiscal 2029 Fiscal 2030 Thereafter Total
Purchase commitments $ 42,964 $ 60,190 $ 7,313 $ 3,944 $ 88 $ — $ 114,499
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Critical Accounting Estimates
As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2025, 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 and other intangible assets. There have been no significant changes to the assumptions and estimates related to the Company’s critical accounting policies since June 29, 2025, except as noted below:
Goodwill & Intangible Assets Assessment and Impairment
Interim Impairment Evaluation
During the quarter ended March 29, 2026, the Company evaluated whether events or circumstances had changed such that it was more likely than not that the fair value of its goodwill, intangibles and other long-lived assets were less than their carrying amounts. After consideration of current and projected 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 29, 2026.
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, 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 29, 2026, the Company recorded a non-cash goodwill and intangible impairment charge of $45.2 million, comprised of $34.6 million attributable to the Consumer Floral & Gifts reporting unit's goodwill and $10.6 million attributable to the Personalization Mall tradename within the same reporting unit. The Company concluded that definite-lived and other long-lived assets of the reporting unit were not impaired.
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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 forecasts concerning future events and can generally be identified by the use of statements that include words such as “anticipate,” “estimate,” “expects,” “project,” “intend,” “plan,” “believe,” “foresee,” “forecast,” “likely,” "should," “will,” “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, but not limited to:
•the Company’s ability:
•to achieve revenue and profitability;
•to leverage its operating platform and reduce its operating expense ratio;
•to manage the seasonality of its business;
•to cost effectively acquire and retain customers and drive purchase frequency;
•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 priorities; 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 29, 2025 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.
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