1-800-FLOWERS.COM, Inc. (FLWS) - 10-K Summary
Business Context and Reporting Period
Company: 1-800-FLOWERS.COM, Inc.
Filing Type: Form 10-K (Annual Report)
Period Ended: June 28, 2026
Business Overview: A leading provider of thoughtful expressions operating a multi-brand e-commerce platform including 1-800-Flowers.com, Harry & David, Cheryl's Cookies, and PersonalizationMall.com. The company operates three segments: Consumer Floral & Gifts, Gourmet Foods & Gift Baskets, and BloomNet. The business is highly seasonal, with the Thanksgiving through Christmas holiday season (Fiscal Q2) generating over 40% of annual revenues.
Key Financial Metrics
| Metric (in millions) | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Net Revenues | $1,503.5 | $1,685.7 | -10.8% |
| Gross Profit | $571.3 | $652.3 | -12.4% |
| Gross Margin | 38.0% | 38.7% | -70 bps |
| Net Loss | $(134.8) | $(200.0) | Improvement |
| Adjusted EBITDA | $2.9 | $29.2 | -90.0% |
| Free Cash Flow | $(13.0) | $(67.8) | Improvement |
| Cash & Equivalents | $11.4 | $46.5 | -75.5% |
| Working Capital | $(17.8) | $61.3 | Negative |
| Long-Term Debt | $112.2 | $134.8 | -16.8% |
Material Changes vs. Prior Period
- Revenue Decline: Net revenues decreased 10.8% primarily due to a strategic shift prioritizing marketing effectiveness and profitability over near-term growth, resulting in lower order volumes (down 17.6%). This was partially offset by a 5.5% increase in average order value and higher wholesale volumes.
- Impairment Charges: The company recorded a non-cash goodwill and intangible impairment charge of $45.2 million in Fiscal 2026, compared to $143.8 million in Fiscal 2025. The 2026 charge included $34.6 million for Consumer Floral & Gifts goodwill and $10.6 million for the Personalization Mall tradename.
- Segment Performance:
- Consumer Floral & Gifts: Revenues down 17.7% due to reduced marketing spend.
- Gourmet Foods & Gift Baskets: Revenues down 5.2%, with e-commerce down 7.8% but wholesale up 10.2%.
- BloomNet: Revenues down 1.9% due to lower service revenue.
- Acquisitions: Completed acquisitions of Scharffen Berger (July 2024) and Card Isle (April 2024), both deemed immaterial to consolidated financial statements.
Guidance, Outlook, and Risks
- Management Commentary: Management stated Fiscal 2026 was a year of meaningful progress in strengthening the business foundation, modernizing digital capabilities, and simplifying operations. The company is evaluating potential sales of non-strategic assets and other capital raising options to optimize its capital structure.
- Liquidity: The company had negative working capital of $17.8 million at period end. It expects to borrow under its revolving credit facility in Fiscal Q1 2027 to fund pre-holiday inventory, with repayment expected by the end of Fiscal Q2 2027.
- Credit Agreement: On September 9, 2026, the company amended its credit agreement to provide covenant relief, including a minimum liquidity covenant and modified asset sale restrictions.
- Key Risks:
- Macroeconomic Conditions: Sensitivity to consumer discretionary spending, inflation, and tariffs on imported flowers (specifically from Colombia and Canada).
- Supply Chain: Dependence on international vendors for flowers and raw materials; exposure to shipping costs and disruptions.
- Impairment Risk: The Personalization Mall tradename was written down to fair value with zero excess fair value, creating a risk of future impairments if assumptions change.
- Cybersecurity: Ongoing threats to IT systems and data privacy.
Investor Verification Checklist
- Subsequent Event (Fire): Verify the financial impact of the fire at the Hebron, Ohio facility that occurred on July 29, 2026, and the status of insurance recoveries.
- Valuation Allowance: Review the $71.8 million valuation allowance on deferred tax assets, which increased by $31.2 million in Fiscal 2026 due to continued losses.
- Debt Covenants: Confirm compliance with the amended credit agreement covenants, specifically the minimum liquidity and EBITDA requirements effective post-September 2026.
- Marketing ROI: Assess the long-term impact of the reduced marketing spend strategy on customer acquisition costs and future revenue growth.
- Personalization Mall: Monitor the performance of the Personalization Mall brand, given its recent impairment and zero excess fair value status.