1-800-Flowers.com Sales Drop 7 Percent

Key Points

• Revenue fell 6.7% from the prior year period, with all segments experiencing sales declines and worsening gross margins.

• Adjusted net loss widened sharply to ($0.69) per share, more than doubling from the previous year's loss.

• Cash flow turned negative, with free cash flow at ($67.8) million and cash balances dropping significantly.

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1-800-Flowers.com (NASDAQ:FLWS), a leading online florist and gifting platform, posted its fiscal fourth quarter results on September 4, 2025. The key headline is a year-over-year decline in GAAP revenue and profitability across all core business segments, reflecting deeper business challenges than analysts had expected. Fourth quarter revenue was $336.6 million, down 6.7 % from the same period last year, while adjusted earnings per share (EPS) came in at a loss of ($0.69), versus a loss of ($0.34) per share last year. Profit margins contracted and the company's free cash flow (non-GAAP) swung to a negative position. Management provided no forward guidance. The period marks another tough quarter as new leadership continues a major business transformation amidst operational and financial pressures.

Company Overview and Strategic Priorities

1-800-Flowers.com specializes in delivering floral arrangements, gourmet food baskets, and a variety of gifts to consumers primarily through its e-commerce platform. Its operations include both direct-to-consumer sales and a wholesale business servicing independent florists via the BloomNet network.

The company’s success depends on brand strength, its Celebrations Passport loyalty program, and the ability to deliver gifts consistently and efficiently all year. Management has recently stressed cost control, customer-centricity, technology improvements, and diversifying sales channels as foundation stones for a transformation aimed at long-term growth.

Quarter in Review: Key Results, Drivers, and Segment Details

Revenue declined in every business segment. The Consumer Floral & Gifts segment, which includes products such as bouquets, plants, and personalized gifts, posted an 8.8% drop in sales (GAAP). The Gourmet Foods & Gift Baskets segment, consisting of edible gifts like Harry & David baskets, cakes, fruit, and specialty treats, saw a 3.6% decline in revenue. Even the BloomNet wholesale and services segment recorded a 0.6% decrease as broader demand softened.

Profitability weakened sharply. Gross profit margin (GAAP) dropped to 35.5% from 38.4%, due to both higher promotional activity and lower revenue to cover fixed costs. The highly promotional environment forced the company to cut prices, eroding margin. This weighed on gross margins earlier in the year. Management’s efforts to cut operating costs continued to show some progress, but expense reduction alone did not offset pressure from lagging sales and shrinking margins.

The adjusted EBITDA loss, which is earnings before interest, taxes, depreciation, and amortization and excludes certain items, worsened substantially to ($24.2 million), compared to a ($8.8 million) loss in the prior year. This reflects the combination of shrinking sales and more challenging margin dynamics. Operating expenses rose on a generally accepted accounting principles (GAAP) basis, but once non-recurring charges are excluded, the decline in underlying expenses offers a small offset to operational challenges.

The company recorded a significant, non-cash impairment charge in Q3 FY2025, suggesting that the value of certain acquired brands and trademarks has diminished. Negative free cash flow (non-GAAP) and cash levels falling to $46.5 million at period-end constrain the company’s ability to invest for growth or weather further downturns. The long-term debt load was trimmed somewhat, but total equity declined as a consequence of both cash burn and the impairment charge.

On the segment level, the Consumer Floral & Gifts line experienced contracting sales and lower contribution margins (non-GAAP), meaning the segment generated less cash after covering direct costs than last year. The Gourmet Foods & Gift Baskets segment also saw lower sales, and its gross margin fell by 2.9 percentage points to 35.5%, primarily due to a highly promotional sales environment and deleveraging on the sales decline. BloomNet, which enables small florists to fulfill and deliver national orders, posted a modest sales drop and a lower contribution margin as fulfillment and rebate costs increased. The Celebrations Passport loyalty program remains an area of focus, but the release did not provide fresh quantitative data on member trends.

Looking back, much of the prior quarter’s optimism -- including hopes for a turnaround after OMS issues and new digital ecosystem investments -- have yet to translate into stabilized or positive financial results. The period stands in contrast to hopes expressed earlier in the year that brand strength and innovation could drive a faster recovery. Instead, management signaled more urgency, acknowledging the need for an extensive reset and that the company hasn’t delivered to its potential.

FLWS does not currently pay a dividend.

Outlook and What’s Next

Management did not offer any forward-looking financial guidance for the current quarter or fiscal year. This is consistent with a previous withdrawal of guidance amid unpredictable sales trends, transformation risks, and ongoing uncertainty about consumer demand.

With cash balances much lower and core segments still shrinking, investors will likely watch for evidence of sales improvement, margin stabilization, and stronger cash generation in upcoming quarters. The new CEO’s focus on building a leaner, data-driven, and customer-centered organization, recent completion of system upgrades, and progress on cost-cutting may lay groundwork for improvement, but as of now, the data shows little in the way of turnaround. Ongoing risks include continued cash burn, further need for discounts, and challenges in restoring sales momentum across all product types.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends 1-800-Flowers.com. The Motley Fool has a disclosure policy.