UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~April 2,~~December 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission File No. 0-26841

1-800-FLOWERS.COM, Inc.

(Exact name of registrant as specified in its charter)

Delaware	11-3117311
(State of incorporation)	(I.R.S. Employer Identification No.)
Two Jericho Plaza, Suite 200, Jericho, NY 11753	(516) 237-6000
(Address of principal executive offices) (Zip code)	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which

registered

Class A common stock

FLWS

The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

☐Large accelerated filer		☑Accelerated filer
☐Non-accelerated filer		☐Smaller reporting company
		☐Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares outstanding of each of the Registrant’s classes of common stock as of ~~May 5, 2023:~~February 2, 2024:

Class A common stock: ~~37,707,872~~37,428,934

Class B common stock: 27,068,221

Table of Contents

	April 2, 2023			July 3, 2022			December 31, 2023			July 2, 2023
	(unaudited)						(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	51,598		$	31,465		$	312,017		$	126,807
Trade receivables, net		36,792			23,812			46,578			20,419
Inventories		191,894			247,563			161,324			191,334
Prepaid and other		39,183			45,398			24,557			34,583
Total current assets		319,467			348,238			544,476			373,143

Property, plant and equipment, net		231,476			236,481			227,643			234,569
Operating lease right-of-use assets		128,746			129,390			117,825			124,715
Goodwill		153,376			213,287			153,577			153,376
Other intangibles, net		141,002			145,568			117,897			139,888
Other assets		24,720			21,927			30,292			25,739
Total assets	$	998,787		$	1,094,891		$	1,191,710		$	1,051,430

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	21,825		$	57,386		$	92,418		$	52,588
Accrued expenses		147,750			175,392			224,084			141,914
Current maturities of long-term debt		20,000			20,000			10,000			10,000
Current portion of long-term operating lease liabilities		15,517			12,919			15,433			15,759
Total current liabilities		205,092			265,697			341,935			220,261

Long-term debt, net		128,112			142,497			181,749			186,391
Long-term operating lease liabilities		121,568			123,662			110,740			117,330
Deferred tax liabilities, net		31,352			35,742			25,026			31,134
Other liabilities		20,665			17,884			28,900			24,471
Total liabilities		506,789			585,482			688,350			579,587

Commitments and contingencies (See Note 13 and Note 15)
Commitments and contingencies (See Note 14)

Stockholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued		-			-			-			-
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 58,260,197 and 57,706,389 shares issued at April 2, 2023 and July 3, 2022		583			577
Class B common stock, $0.01 par value, 200,000,000 shares authorized, 32,348,221 and 32,529,614 shares issued at April 2, 2023 and July 3, 2022		323			325
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 58,743,969 and 58,273,747 shares issued at December 31, 2023 and July 2, 2023, respectively								588			583
Class B common stock, $0.01 par value, 200,000,000 shares authorized, 32,348,221 shares issued at December 31, 2023 and July 2, 2023								323			323
Additional paid-in capital		385,822			379,885			392,849			388,215
Retained earnings		293,630			315,785			302,748			271,083
Accumulated other comprehensive loss		(211	)		(211	)		(170	)		(170	)
Treasury stock, at cost, 20,560,401 and 20,418,396 Class A shares at April 2, 2023 and July 3, 2022, and 5,280,000 Class B shares at April 2, 2023 and July 3, 2022		(188,149	)		(186,952	)
Treasury stock, at cost, 21,089,336 and 20,565,875 Class A shares at December 31, 2023 and July 2, 2023, respectively and 5,280,000 Class B shares at December 31, 2023 and July 2, 2023								(192,978	)		(188,191	)
Total stockholders’ equity		491,998			509,409			503,360			471,843
Total liabilities and stockholders’ equity	$	998,787		$	1,094,891		$	1,191,710		$	1,051,430

	Three Months Ended						Nine Months Ended					Three Months Ended					Six Months Ended
	April 2, 2023			March 27, 2022			April 2, 2023			March 27, 2022		December 31, 2023			January 1, 2023		December 31, 2023			January 1, 2023

Net revenues	$	417,566		$	469,576		$	1,619,047		$	1,721,993	$	822,054		$	897,877	$	1,091,104		$	1,201,481
Cost of revenues		277,126			315,485			1,009,383			1,063,938		466,357			530,111		633,479			732,257
Gross profit		140,440			154,091			609,664			658,055		355,697			367,766		457,625			469,224
Operating expenses:
Marketing and sales		106,472			130,645			390,077			432,795		188,557			194,466		271,075			283,605
Technology and development		14,837			14,456			44,529			41,369		14,822			14,952		30,126			29,692
General and administrative		25,922			22,553			81,075			78,491		27,154			28,908		55,643			55,153
Depreciation and amortization		13,267			12,693			40,276			36,251		14,152			14,315		27,346			27,009
Goodwill and intangible impairment		64,586			-			64,586			-
Intangible impairment													19,762			-		19,762			-
Total operating expenses		225,084			180,347			620,543			588,906		264,447			252,641		403,952			395,459
Operating income (loss)		(84,644	)		(26,256	)		(10,879	)		69,149
Operating income													91,250			115,125		53,673			73,765
Interest expense, net		1,712			1,226			8,676			4,477		4,611			4,143		8,093			6,964
Other expense, net		1,404			4,007			2,474			954
Income (loss) before income taxes		(87,760	)		(31,489	)		(22,029	)		63,718
Income tax expense (benefit)		(16,767	)		(8,080	)		126			11,858
Net income (loss) and comprehensive net income (loss)	$	(70,993	)	$	(23,409	)	$	(22,155	)	$	51,860
Other (income) expense, net													(2,736	)		148		(2,262	)		1,070
Income before income taxes													89,375			110,834		47,842			65,731
Income tax expense													26,468			28,304		16,177			16,893
Net income and comprehensive net income													62,907			82,530		31,665			48,838

Basic net income (loss) per common share	$	(1.10	)	$	(0.36	)	$	(0.34	)	$	0.80
Basic net income per common share												$	0.97		$	1.28	$	0.49		$	0.76

Diluted net income (loss) per common share	$	(1.10	)	$	(0.36	)	$	(0.34	)	$	0.79
Diluted net income per common share												$	0.97		$	1.27	$	0.49		$	0.75

Weighted average shares used in the calculation of net income (loss) per common share:
Weighted average shares used in the calculation of net income per common share:
Basic		64,767			65,028			64,660			65,086		64,835			64,675		64,814			64,606
Diluted		64,767			65,028			64,660			65,849		65,177			64,835		65,155			64,820

	Three Months Ended April 2, 2023 and March 27, 2022																										Three Months Ended December 31, 2023 and January 1, 2023
																Accumulated											Common Stock										Additional				Accumulated Other								Total
											Additional					Other								Total			Class A				Class B						Paid-in		Retained		Comprehensive			Treasury Stock					Stockholders’
	Class A				Class B						Paid-in		Retained			Comprehensive			Treasury Stock					Stockholders’			Shares		Amount		Shares			Amount			Capital		Earnings		Loss			Shares		Amount			Equity
	Shares		Amount		Shares			Amount			Capital		Earnings			Loss			Shares		Amount			Equity
Balance at October 1, 2023																												58,309,547	$	583		32,348,221		$	323		$	390,579	$	239,841	$	(170	)		25,856,358	$	(188,265	)	$	442,891
Net income																												-		-		-			-			-		62,907		-			-		-			62,907
Stock-based compensation																												429,312		5		-			-			2,226		-		-			-		-			2,231
Exercise of stock options																												5,110		-		-			-			44		-		-			-		-			44
Acquisition of Class A treasury stock																												-		-		-			-			-		-		-			512,978		(4,713	)		(4,713	)
Balance at December 31, 2023																												58,743,969	$	588		32,348,221		$	323		$	392,849	$	302,748	$	(170	)		26,369,336	$	(192,978	)	$	503,360

Balance at January 1, 2023		58,256,031	$	583		32,348,221		$	323		$	383,335	$	364,623		$	(211	)		25,838,644	$	(188,127	)	$	560,526
Net loss		-		-		-			-			-		(70,993	)		-			-		-			(70,993	)
Balance at October 2, 2022																												57,706,389	$	577		32,529,614		$	325		$	381,440	$	282,093	$	(211	)		25,698,396	$	(186,952	)	$	477,272
Net income																												-		-		-			-			-		82,530		-			-		-			82,530
Stock-based compensation		4,166		-		-			-			2,487		-			-			-		-			2,487			368,249		4		-			-			1,895		-		-			-		-			1,899
Conversion – Class B into Class A		-		-		-			-			-		-			-			-		-			-			181,393		2		(181,393	)		(2	)		-		-		-					-			-
Acquisition of Class A treasury stock		-		-		-			-			-		-			-			1,757		(22	)		(22	)		-		-		-			-			-		-		-			140,248		(1,175	)		(1,175	)
Balance at April 2, 2023		58,260,197	$	583		32,348,221		$	323		$	385,822	$	293,630		$	(211	)		25,840,401	$	(188,149	)	$	491,998

Balance at December 26, 2021		56,778,082	$	568		33,433,614		$	334		$	377,234	$	361,444		$	(318	)		24,933,148	$	(174,302	)	$	564,960
Net loss		-		-		-			-			-		(23,409	)		-			-		-			(23,409	)
Stock-based compensation		19,666		-		-			-			1,507		-			-			-		-			1,507
Exercise of stock options		-		-		-			-			-		-			-			-		-			-
Conversion – Class B into Class A		889,860		9		(889,860	)		(9	)		-		-			-			-		-			-
Acquisition of Class A treasury stock		-		-		-			-			-		-			-			502,783		(9,267	)		(9,267	)
Balance at March 27, 2022		57,687,608	$	577		32,543,754		$	325		$	378,741	$	338,035		$	(318	)		25,435,931	$	(183,569	)	$	533,791
Balance at January 1, 2023																												58,256,031	$	583		32,348,221		$	323		$	383,335	$	364,623	$	(211	)		25,838,644	$	(188,127	)	$	560,526

Nine Months Ended April 2, 2023 and March 27, 2022

Accumulated

Common Stock

Additional

Other

Total

Class A

Class B

Paid-in

Retained

Comprehensive

Treasury Stock

Stockholders’

Shares

Amount

Shares

Amount

Capital

Earnings

Loss

Shares

Amount

Equity

Balance at July 3, 2022
57,706,389 $ 577 32,529,614 $ 325 $ 379,885 $ 315,785 $ (211
)
25,698,396 $ (186,952
)
$ 509,409
Net loss
- - - - - (22,155
)
- - - (22,155
)
Stock-based compensation
372,415 4 - - 5,937 - - - - 5,941
Conversion – Class B into Class A
181,393 2 (181,393
)
(2
)
- - - - - -
Acquisition of Class A treasury stock
- - - - - - - 142,005 (1,197
)
(1,197
)
Balance at April 2, 2023
58,260,197 $ 583 32,348,221 $ 323 $ 385,822 $ 293,630 $ (211
)
25,840,401 $ (188,149
)
$ 491,998

Balance at June 27, 2021
55,675,661 $ 557 33,433,614 $ 334 $ 371,103 $ 286,175 $ (318
)
24,105,841 $ (148,781
)
$ 509,070
Net income
- - - - - 51,860 - - - 51,860
Stock-based compensation
800,387 8 - - 6,795 - - - - 6,803
Exercise of stock options
321,700 3 - - 843 - - - - 846
Conversion – Class B into Class A
889,860 9 (889,860
)
(9
)
- - - - - -
Acquisition of Class A treasury stock
- - - - - - - 1,330,090 (34,788
)
(34,788
)
Balance at March 27, 2022
57,687,608 $ 577 32,543,754 $ 325 $ 378,741 $ 338,035 $ (318
)
25,435,931 $ (183,569
)
$ 533,791

Table of Contents

	Six Months Ended December 31, 2023 and January 1, 2023
	Common Stock										Additional				Accumulated Other								Total
	Class A				Class B						Paid-in		Retained		Comprehensive			Treasury Stock					Stockholders’
	Shares		Amount		Shares			Amount			Capital		Earnings		Loss			Shares		Amount			Equity

Balance at July 2, 2023		58,273,747	$	583		32,348,221		$	323		$	388,215	$	271,083	$	(170	)		25,845,875	$	(188,191	)	$	471,843
Net income		-		-		-			-			-		31,665		-			-		-			31,665
Stock-based compensation		465,112		5		-			-			4,590		-		-			-		-			4,595
Exercise of stock options		5,110		-		-			-			44		-		-			-		-			44
Acquisition of Class A treasury stock		-		-		-			-			-		-		-			523,461		(4,787	)		(4,787	)
Balance at December 31, 2023		58,743,969	$	588		32,348,221		$	323		$	392,849	$	302,748	$	(170	)		26,369,336	$	(192,978	)	$	503,360

Balance at July 3, 2022		57,706,389	$	577		32,529,614		$	325		$	379,885	$	315,785	$	(211	)		25,698,396	$	(186,952	)	$	509,409
Net income		-		-		-			-			-		48,838		-			-		-			48,838
Stock-based compensation		368,249		4		-			-			3,450		-		-			-		-			3,454
Conversion – Class B into Class A		181,393		2		(181,393	)		(2	)		-		-		-					-			-
Acquisition of Class A treasury stock		-		-		-			-			-		-		-			140,248		(1,175	)		(1,175	)
Balance at January 1, 2023		58,256,031	$	583		32,348,221		$	323		$	383,335	$	364,623	$	(211	)		25,838,644	$	(188,127	)	$	560,526

	Nine months ended						Six Months Ended
	April 2, 2023			March 27, 2022			December 31, 2023			January 1, 2023

Operating activities:
Net income (loss)	$	(22,155	)	$	51,860
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Goodwill and intangible asset impairment		64,586			-
Net income							$	31,665		$	48,838
Adjustments to reconcile net income to net cash provided by operating activities:
Intangible impairment								19,762			-
Depreciation and amortization		40,276			36,251			27,346			27,009
Amortization of deferred financing costs		998			943			361			671
Deferred income taxes		(4,390	)		(1,678	)		(6,108	)		(846	)
Bad debt expense		2,997			(873	)		225			2,407
Stock-based compensation		5,941			6,803			4,595			3,454
Other non-cash items		(245	)		1,352			(385	)		(470	)
Changes in operating items:
Trade receivables		(15,977	)		(18,570	)		(26,384	)		(31,622	)
Inventories		57,031			(51,928	)		29,808			46,506
Prepaid and other		2,706			7,174			6,640			7,550
Accounts payable and accrued expenses		(59,806	)		6,847			125,404			89,050
Other assets and liabilities		1,102			547			(169	)		1,113
Net cash provided by operating activities		73,064			38,728			212,760			193,660

Investing activities:
Acquisitions, net of cash acquired		(5,000	)		(22,105	)
Capital expenditures, net of non-cash expenditures		(31,351	)		(47,945	)
Capital expenditures								(17,807	)		(23,849	)
Net cash used in investing activities		(36,351	)		(70,050	)		(17,807	)		(23,849	)

Financing activities:
Acquisition of treasury stock		(1,197	)		(34,788	)		(4,787	)		(1,175	)
Proceeds from exercise of employee stock options		-			846			44			-
Proceeds from bank borrowings		195,900			125,000			82,000			195,900
Repayment of notes payable and bank borrowings		(210,900	)		(140,000	)
Repayment of bank borrowings								(87,000	)		(205,900	)
Debt issuance cost		(383	)		(284	)		-			(383	)
Net cash used in financing activities		(16,580	)		(49,226	)		(9,743	)		(11,558	)

Net change in cash and cash equivalents		20,133			(80,548	)		185,210			158,253
Cash and cash equivalents:
Beginning of period		31,465			173,573			126,807			31,465
End of period	$	51,598		$	93,025		$	312,017		$	189,718

The accompanying unaudited condensed consolidated financial statements have been prepared by 1-800-FLOWERS.COM, Inc. and Subsidiaries (the “Company”) in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and ~~nine~~six-month periods ended ~~April 2,~~December 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending ~~July 2, 2023.~~June 30, 2024. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended July ~~3, 2022~~2, 2023, which provides a more complete understanding of our accounting policies, financial position, operating results and other matters.

The Company’s quarterly results may experience seasonal fluctuations. 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, ~~and Mother's Day,~~ revenues also have historically risen during the Company’s fiscal third and fourth quarters in comparison to its fiscal first quarter.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Service and outbound shipping charged to customers are recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers.

Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. As such, customer orders are recorded as deferred revenue prior to shipment or rendering of product or services. Deferred revenues primarily relate to e-commerce orders placed, but not shipped, prior to the end of the fiscal period, as well as for subscription programs, including our various food, wine, and plant-of-the-month clubs and our Celebrations ~~Passport~~Passport® program.

Our total deferred revenue as of July ~~3, 2022~~2, 2023 was ~~$33.7~~$30.8 million (included in “Accrued expenses” on our consolidated balance sheets), of which ~~$5.7~~$10.7 million and ~~$32.5~~$26.8 million was recognized as revenue during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023. The deferred revenue balance as of ~~April 2,~~December 31, 2023 was ~~$41.7~~$39.9 million.

~~During the~~The Company performs its annual assessment of goodwill and indefinite-lived intangible impairment during its fiscal fourth quarter, ~~ended~~ ~~April 2, 2023,~~ ~~the Company evaluated whether~~or more frequently if events occur or circumstances ~~had changed~~change such that it ~~would indicate it was~~is more likely than not that ~~its goodwill,~~an impairment may exist. During the quarter ended December 31, 2023, as a result of a decline in the actual and projected revenue for the Company’s PersonalizationMall tradename (indefinite-lived intangible ~~and other long-lived assets~~asset), as well as a higher discount rate resulting from the higher interest rate environment, the Company determined that an impairment assessment was required for this tradename. This assessment resulted in the Company recording a non-cash impairment charge of $19.8 million to reduce the recorded carrying value of the Gourmet Foods & Gift Baskets reporting units fair values were less than their carrying amounts. After considering the continuing pressures on consumer discretionary spending, ongoing geopolitical events, the current inflationary macro-economic conditions, related cost input headwinds that have negatively impacted the Company’s gross margins, and resulting downward revisions to its forecast, the Company concluded that a triggering event had occurred for its Gourmet Foods & Gift Baskets reporting unit. As such, the Company performed an impairment test of the reporting unit’s goodwill, intangibles and long-lived assets as of ~~April 2, 2023,~~ ~~and fully impaired the related goodwill, and partially impaired certain tradenames within the reporting unit.~~ PersonalizationMall tradename.

The Company concluded that ~~the definite-lived~~goodwill and other ~~long-lived~~indefinite-lived intangible assets, ~~of the reporting unit were~~excluding its PersonalizationMall tradename, did not ~~impaired.~~require an impairment assessment. See Note 65 – Goodwill and Intangible Assets, Net for further information.

In November 2023, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires enhanced disclosures about significant segment expenses, includes enhanced interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements. The Company ~~does~~is currently evaluating the impact of ASU ~~not~~2023 ~~expect that any recently issued accounting pronouncements will have a material effect~~-07 on its consolidated financial ~~statements.~~statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires the disclosure of additional information with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes and requires greater detail about significant reconciling items in the reconciliation. Additionally, the amendment requires disaggregated information pertaining to taxes paid, net of refunds received, for federal, state, and foreign income taxes. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and allows for either a prospective or retrospective approach on adoption. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

Basic net income ~~(loss)~~ per common share is computed by dividing the net income ~~(loss)~~ during the period by the weighted average number of common shares outstanding during the period. Diluted net income ~~(loss)~~ per common share ~~is computed by dividing~~reflects the ~~net income (loss) during the period by the sum of the weighted-average number of~~potential dilution that would occur if securities or other contracts to issue common ~~shares outstanding during the period and the potentially dilutive~~stock were exercised or converted into common ~~shares (consisting of employee stock options and unvested restricted stock awards).~~stock.

The following table sets forth the computation of basic and diluted net income ~~(loss)~~ per common share:

~~The Company has a Long Term Incentive and Share Award Plan, which is more fully described in Note~~ 12 ~~and Note~~ 13 ~~to the consolidated financial statements included in the~~ ~~Company’s Annual Report on Form~~ 10~~-K for the fiscal year ended~~ ~~July 3, 2022~~~~, that provides for the grant to eligible employees, consultants and directors of stock options, restricted shares, and other stock-based awards.~~

~~The amounts of stock-based compensation expense recognized in the periods presented are as follows:~~

~~Stock-based compensation is recorded within the following line items of operating expenses:~~

~~Stock-based compensation expense has~~ ~~not~~ ~~been allocated between business segments, but is reflected as part of Corporate overhead (see~~ ~~Note~~ 12 ~~- Business Segments~~).

~~The following table summarizes stock option activity during the~~ ~~nine~~ ~~months ended~~ ~~April 2, 2023:~~

~~As of~~ ~~April 2, 2023,~~ ~~the total future compensation cost related to non-vested options,~~ ~~not~~ ~~yet recognized in the statement of income, was $10.2 million and the weighted average period over which these awards are expected to be recognized was 2.6 years.~~

The Company grants shares of Common Stock to its employees that are subject to restrictions on transfer and risk of forfeiture until fulfillment of applicable service and performance conditions and, in certain cases, holding periods (Restricted Stock). The following table summarizes the activity of non-vested restricted stock awards during the ~~nine~~ ~~months ended~~ ~~April 2, 2023:~~

~~The fair value of non-vested shares is determined based on the closing stock price on the grant date. As of~~ ~~April 2, 2023,~~ ~~there was $12.2 million of total unrecognized compensation cost related to non-vested, restricted, stock-based compensation to be recognized over the weighted-average remaining period of 2.7 years.~~

On January 10, 2023, the Company completed its acquisition of certain assets of the Things Remembered brand, a provider of personalized gifts, whose operations ~~will be~~are integrated within the PersonalizationMall.com brand, in the Consumer Floral & Gifts segment. The Company used cash on hand to fund the $5.0 million purchase, which included the intellectual property, customer list, certain inventory, and equipment. The acquisition did not include Things Remembered retail stores. Things Remembered’s annual revenues from its ~~ecommerce~~e-commerce operations, based on its most recently available unaudited financial information was $30.4 million for the twelve months ended November 30, 2022.

The total consideration of $5.0 million was ~~preliminarily~~ allocated to the identifiable assets acquired and liabilities assumed based on our ~~preliminary~~ estimates of their fair values on the acquisition date, including: goodwill of ~~$1.7~~$1.9 million (deductible for income tax purposes), trademarks of $0.8 million (indefinite life), customer lists of $0.8 million (3-year life), inventory of ~~$1.3~~$1.1 million, and equipment of $0.4 million. ~~The Company is in the process of finalizing its allocation and this~~ ~~may~~ result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain additional intangible assets, revisions of useful lives of intangible assets, and the determination of any residual amount that will be allocated to goodwill.

On ~~October 27, 2021,~~ the Company completed its acquisition of all of the membership interests in Vital Choice Seafood LLC (“Vital Choice”), a provider of wild-caught seafood and sustainably farmed shellfish, pastured proteins, organic foods, and marine-sourced nutritional supplements. The Company utilized its existing credit facility to fund the $20.0 million purchase (subject to certain working capital and other adjustments), which included tradenames, customer lists, websites and operations. Vital Choice revenues were approximately $27.8 million during its most recent year ended ~~December 31, 2020.~~

After working capital and related adjustments, total consideration was approximately $20.0 million, and was preliminarily allocated to the identifiable assets acquired and liabilities assumed based on our preliminary estimates of their fair values, as a result of information that was available as of the date of the acquisition. During the quarter ended ~~January 1,~~December 31, 2023, the Company finalized its purchase price allocation, resulting in immaterial adjustments to the preliminary carrying value of the respective recorded assets and the residual amount that was allocated to goodwill.

~~The following table summarizes the allocation of the purchase price to the fair values of assets acquired and liabilities assumed:~~

The estimated fair value of the acquired work in process and finished goods inventory was determined utilizing the income approach. The income approach estimates the fair value of the inventory based on the net retail value of the inventory, less operating expenses and a reasonable profit allowance. Raw materials inventory was valued at book value, as there have ~~not~~ ~~been any significant price fluctuations or other events that would materially change the cost to replace the raw materials.~~

Of the acquired intangible assets, $4.3 million was assigned to customer lists, which is being amortized over the estimated remaining life of 5 years, $4.9 million was assigned to tradenames (indefinite life), and $5.0 million was assigned to goodwill (indefinite life), which is expected to be deductible for tax purposes. The goodwill recognized is primarily related to synergistic value created in terms of both operating costs and revenue growth opportunities, enhanced financial and operational scale, and other strategic benefits.

The estimated fair value of the acquired tradenames was determined using the relief from royalty method, which is a risk-adjusted discounted cash flow approach. The relief from royalty method values an intangible asset by estimating the royalties saved through ownership of the asset. The relief from royalty method requires identifying the future revenue that would be generated by the trademark, multiplying it by a royalty rate deemed to be avoided through ownership of the asset and discounting the projected royalty savings amounts back to the acquisition date. The royalty rate used in the valuation was based on a consideration of market rates for similar categories of assets. The discount rate used in the valuation was based on the Company’s weighted average cost of capital, the riskiness of the earnings stream associated with the trademarks and the overall composition of the acquired assets.

The estimated fair value of the acquired customer lists was determined using the excess earnings method under the income approach. This method requires identifying the future revenue that would be generated by existing customers at the time of the acquisition, considering an appropriate attrition rate based on the historical experience of the Company. Appropriate expenses are then deducted from the revenues and economic rents are charged for the return on contributory assets. The after-tax cash flows attributable to the asset are discounted back to their net present value at an appropriate intangible asset rate of return and summed to calculate the value of the customer lists.

Operating results of the ~~Vital Choice~~Things Remembered business are reflected in the Company’s consolidated financial statements from the date of acquisition within the ~~Gourmet Foods~~Consumer Floral & ~~Gift Baskets~~Gifts segment. Pro forma results of operations have not been presented, as the impact on the Company’s consolidated financial results was not material.

On ~~December 31, 2021,~~ the Company completed its acquisition of Alice’s Table, Inc. (“Alice’s Table”), a lifestyle business offering fully digital livestreaming and on demand floral, culinary and other experiences to guests across the country. The Company utilized existing cash of $0.8 million, contributed accounts receivable due from Alice’s Table of $0.3 million, and converted its cost method investment in Alice’s Table of $0.3 million, in order to acquire 100% ownership in Alice’s Table, which included tradenames, customer lists, websites and operations. Immediately prior to completing the acquisition, the Company wrote down its previous cost method investment in Alice’s Table to its $0.3 million fair value, on the date of the acquisition, resulting in an impairment of $0.7 million, which is recorded in the “Other (income) expense, net” line item on the Statement of Operations for the fiscal year ended ~~July 3, 2022.~~ ~~Alice’s Table revenues were approximately $3.8 million during its most recent fiscal year ended~~ ~~September 30, 2021.~~

The resulting total consideration of $1.3 million was preliminarily allocated to the identifiable assets acquired and liabilities assumed based on our preliminary estimates of their fair values, as a result of information that was available as of the date of the acquisition. During the quarter ended ~~January 1, 2023,~~ the Company finalized its purchase price allocation, resulting in immaterial adjustments to the preliminary carrying value of the respective recorded assets and the residual amount that was allocated to goodwill. The consideration transferred was allocated to: goodwill of $0.8 million, trademarks of $0.5 million (indefinite life), customer lists of $0.2 million (4-year life), and liabilities of $0.2 million.

The Company’s inventory, valued at the lower of cost or net realizable value, includes purchased and manufactured finished goods for sale, packaging supplies, crops, raw material ingredients for manufactured products and associated manufacturing labor, and is classified as follows:

The following table presents goodwill by segment and the related change in the net carrying amount:

~~Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group~~ ~~may~~ ~~not~~ ~~be recoverable.~~ Future estimated amortization expense is as follows: remainder of fiscal ~~2023~~ ~~- $1.1 million, fiscal~~ 2024 - ~~$4.5~~$2.2 million, fiscal 2025 - $1.9 million, fiscal 2026 - $1.3 million, fiscal 2027 - $0.5 million, fiscal 2028 - $0.2 million and thereafter - ~~$0.5~~$0.3 million.

The Company performs its annual assessment of goodwill and indefinite-lived intangible impairment during its fiscal fourth quarter, or more frequently if events occur or circumstances change such that it is more likely than not that an impairment may exist.

During the ~~year~~quarter ended ~~July 3, 2022,~~ the Company experienced a sustained decline in its share price and a resulting decrease in its market capitalization, primarily due to the overall macroeconomic environment. Inflationary cost increases, which began during the ~~first~~ half of our fiscal year, were exacerbated by geopolitical events, further pressuring the Company’s gross margin and operating expenses. Due to this overall market decline and the Company’s operating performance, the Company completed impairment assessments of the goodwill and intangible assets of its three reporting units. The quantitative impairment tests as of ~~July 3, 2022~~ ~~did~~ ~~not~~ ~~indicate an impairment.~~

~~Although originally projected to be transitory, through the~~ ~~three~~ ~~months and~~ ~~nine~~ ~~months ended~~ ~~April 2,~~December 31, 2023, ~~the trend~~as a result of ~~adverse macroeconomic conditions and geopolitical pressures continued, and there was~~ a ~~sustained~~ decline in the actual and projected revenue for the Company’s ~~market capitalization. As~~PersonalizationMall tradename (indefinite-lived intangible asset), as well as a higher discount rate resulting from the ~~expected duration of these factors changed during the~~ ~~three~~ ~~months ended~~ ~~April 2, 2023,~~ higher interest rate environment, the Company ~~made downward projections to its business forecasts, and therefore~~ determined ~~a triggering event had occurred~~ that ~~required~~ an ~~interim~~ impairment assessment ~~of the goodwill, intangibles and other long-lived assets of the Gourmet Foods & Gift Baskets reporting unit as of~~ ~~April 2, 2023.~~

The Company performed its goodwill impairment test by comparing the fair value of its Gourmet Foods & Gift Baskets reporting unit to its respective carrying value. The Company estimated the fair value of the Gourmet Foods & Gift Baskets reporting unit using an equal weighting of the income and market approaches, and a discount rate of 13%. 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 which required management to make significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, 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.

was required. The Company’s impairment test for the indefinite-lived intangible ~~assets~~asset encompassed calculating a fair value of the indefinite-lived intangible asset and comparing that result to its carrying value. To determine fair value of the indefinite-lived intangible ~~assets,~~asset, 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 intangibles 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~~quarter ending ~~April 2,~~December 31, 2023, the Company recorded a ~~goodwill and intangible~~non-cash impairment charge ~~against~~of $19.8 million to reduce the recorded carrying value of the PersonalizationMall tradename to its ~~Gourmet Foods~~estimated fair value. This impairment charge was recorded in the Company’s Consumer Floral & ~~Gift Baskets~~Gifts reporting ~~unit of $64.6 million, comprised of $62.3 million which was attributable to goodwill and $2.3 million which was attributable to certain tradenames within the same reporting~~ unit.

Investments in non-marketable equity instruments of private companies, where the Company does not possess the ability to exercise significant influence, are accounted for at cost, less impairment (assessed qualitatively at each reporting period), adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. These investments are included within “Other assets” in the Company’s consolidated balance sheets. The aggregate carrying amount of the Company’s ~~cost method~~equity investments without a readily determinable fair value was ~~$3.5~~$2.6 million as of ~~April 2,~~December 31, 2023 and July ~~3, 2022,~~2, 2023, respectively.

The Company also holds certain trading securities associated with its Non-Qualified Deferred Compensation Plan (“NQDC Plan”). These investments are measured using quoted market prices at the reporting date and are included within the “Other assets” line item in the consolidated balance sheets (see Note 109 - Fair Value Measurements).

On ~~May 31, 2019,~~June 27, 2023, the Company, ~~and~~ certain of its U.S. subsidiaries, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent entered into a Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”). The Third Amended Credit Agreement amends and restates the Company’s Second Amended and Restated Credit Agreement, ~~(the~~ ~~“2019~~ ~~Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent, and a group of lenders. The~~ ~~2019~~ ~~Credit Agreement amended and restated the Company’s existing amended and restated credit agreement~~ dated as of ~~December 23, 2016~~ May 31, 2019 (~~to,~~as amended by the First Amendment, dated as of August 20, 2020, the Second Amendment, dated as of November 8, 2021, and the Third Amendment, dated as of August 29, 2022). The Third Amended Credit Agreement, among other modifications: (i) ~~increase~~increases the amount of the outstanding term loan (“Term Loan”) from approximately ~~$97~~$150 million to ~~$100~~$200 million, (ii) ~~extend~~decreases the amount of the commitments in respect of the revolving credit facility from $250 million to $225 million subject to a seasonal reduction to an aggregate amount of $125 million for the period from January 1 to August 1, (iii) extends the maturity date of the outstanding ~~Term Loan~~term loan and the revolving credit ~~facility (“Revolver”)~~facilities by approximately 2948 months to ~~May 31, 2024,~~June 27, 2028, and ~~(iii) decrease~~(iv) increases the applicable interest rate margins for ~~LIBOR~~SOFR and base rate loans by 25 basis points. ~~The Term Loan is payable in 19 quarterly installments~~

For each borrowing under the ~~Existing~~Third Amended Credit Agreement, ~~(as defined below),~~ the Company may elect that such borrowing bear interest at an annual rate equal to either: (1) a base rate plus an applicable margin varying based on the Company’s consolidated leverage ratio, where the base rate is the highest of (a) the prime rate, (b) the New York fed bank rate plus 0.5%, and (c) ~~a LIBOR rate plus 1%, or (~~2) an adjusted ~~LIBOR~~SOFR rate plus an applicable margin varying based on the Company’s consolidated leverage ratio.

On ~~August 20, 2020,~~ ~~the Company, the Subsidiary Guarantors, JPMorgan Chase Bank, N.A. as administrative agent, and~~ The adjusted SOFR rate includes a ~~group~~credit spread adjustment of ~~lenders entered into a First Amendment (the “First Amendment”) to the~~ ~~2019~~ ~~Credit Agreement. The First Amendment amends the~~ ~~2019~~ Credit Agreement to, among other modifications, (i) increase the aggregate principal amount of the existing Revolver commitments from $200.0 million to $250.0 million, (ii) establish a new tranche of term A-1 ~~loans in an aggregate principal amount of $100.0 million (the~~ ~~“2020~~ Term Loan”), (iii) increase the working capital sublimit with respect to the Revolver from $175.0 million to $200.0 million, and (iv) increase the seasonally-reduced Revolver commitments from $100.0 million to $125.0 million0.1% for ~~the period from~~ ~~January 1~~ ~~through~~ ~~August 1~~ ~~for each fiscal year of the Company.~~all interest periods.

The ~~2020~~ ~~Term Loan will mature on~~ ~~May 31, 2024.~~ ~~Proceeds of the borrowing under the~~ ~~2020~~ ~~Term Loan~~ ~~may~~ ~~be used for working capital and general corporate purposes of the Company and its subsidiaries, subject to certain restrictions. The~~ ~~2020~~ ~~Term Loan is payable in 15 quarterly installments of principal and interest beginning on~~ ~~September 27, 2020,~~ ~~with escalating principal payments, at the rate of 5.0% per annum for the~~ ~~first~~~~four~~ ~~payments, and 10.0% per annum for the remaining~~ 11 ~~payments, with the remaining balance of $67.5 million due upon maturity.~~

On ~~November 8, 2021,~~ ~~the Company, certain of its U.S. subsidiaries, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, entered into a Second Amendment (the “Second Amendment”) to the~~ ~~2019~~ ~~Credit Agreement. The Second Amendment amended the~~ ~~2019~~ ~~Credit Agreement to, among other modifications, decrease the interest margins and LIBOR floor applicable to the~~ ~~2020~~ ~~Term Loan.~~

On ~~August 29, 2022,~~ ~~the Company, certain of its U.S. subsidiaries, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, entered into a~~ Third ~~Amendment (the “Third Amendment”) to the~~ ~~2019~~ ~~Credit Agreement. The Third Amendment amends the~~ ~~2019~~ ~~Credit Agreement (the~~ ~~2019~~ Credit Agreement, as amended by the First Amendment, the Second Amendment, and the Third Amendment, the “Existing Credit Agreement”) to, among other modifications, (A) alter the financial maintenance covenants set forth therein by (1~~) increasing the required maximum consolidated leverage ratio, for the reference period ending~~ ~~October 2, 2022,~~ ~~from 3.25 to~~ ~~1.00~~ ~~to 4.25 to~~ ~~1.00~~ ~~and (~~2~~) decreasing the required minimum consolidated fixed charge coverage ratio, for the reference periods ending~~ ~~October 2, 2022,~~ ~~January 1, 2023,~~ ~~and~~ ~~April 2, 2023,~~ ~~from 1.50 to 1.00 to 1.00 to 1.00 and (B) increase the amount of certain capital expenditures that~~ ~~may~~ ~~be disregarded for purposes of calculating the consolidated fixed charge coverage ratio from $25.0 million to $35.0 million.~~

~~The Existing~~Amended Credit Agreement requires that while any borrowings or commitments are outstanding the Company comply with certain financial covenants and affirmative covenants as well as certain negative covenants that, subject to certain exceptions, limit the Company’s ability to, among other things, incur additional indebtedness, make certain investments and make certain restricted payments. The Company was in compliance with these covenants as of ~~April 2,~~December 31, 2023. The ~~Existing~~Third Amended Credit Agreement is secured by substantially all of the assets of the Company.

The principal of the Term Loan is payable at a rate of $2.5 million for the first8 quarterly installments beginning on September 29, 2023, increasing to a quarterly payment of $5.0 million, commencing on September 26, 2025, for the remaining 11 payments, with the remaining balance of $125.0 million due upon maturity on June 27, 2028.

Future principal term loan payments under the ~~Term Loan and~~ ~~2020~~ ~~Term Loan~~Third Amended Credit Agreement are as follows: $5.0 million – remainder of ~~fiscal~~Fiscal ~~2023~~2024, $10.0 million – Fiscal 2025, $20.0 million – Fiscal 2026, $20.0 million – Fiscal 2027, and ~~$145.0~~$140.0 million – ~~fiscal~~Fiscal ~~2024.~~2028.

Cash and cash equivalents, trade and other receivables, prepaids, accounts payable and accrued expenses are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Although no trading market exists, the Company believes that the carrying amount of its debt approximates fair value due to its variable nature (these are level 12 investments). The Company’s investments in non-marketable equity instruments of private companies are carried at cost and are periodically assessed for other-than-temporary impairment when an event or circumstances indicate that an other-than-temporary decline in value may have occurred. The Company’s remaining financial assets and liabilities are measured and recorded at fair value (see table below). The Company’s non-financial assets, such as definite lived intangible assets and property, plant and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Goodwill and indefinite lived intangibles are tested for impairment annually, or more frequently, if events occur or circumstances change such that it is more likely than not that an impairment may exist, as required under the accounting standards.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the guidance are described below:

The following table presents by level, within the fair value hierarchy, financial assets and liabilities measured at fair value on a recurring basis:

AtThe Company computed the ~~end of each~~ interim ~~reporting period, the Company estimates its~~tax provision using an estimated annual effective ~~income tax~~ rate, ~~expected to be applicable~~adjusted for ~~the full year.~~discrete items. This estimate is used in providing for income taxes on a year-to-date basis and may change in subsequent interim periods. The Company’s effective tax rate for the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023 was ~~19.1%~~29.6% and ~~-0.6%~~33.8% respectively, compared to ~~25.7%~~25.5% and ~~18.6%~~25.7% in the same periods of the prior year. The Company’s effective tax rate for fiscal ~~three~~2024 and fiscal ~~nine~~2023 ~~months ended~~ ~~April 2, 2023~~ differed from the U.S. federal statutory rate of 21.0% primarily as a result of the non-deductible portion of the goodwill impairment charge as well as state income taxes, non-deductible executive compensation, and tax shortfalls related to stock-based compensation, partially offset by various tax credits. The effective tax rate for the ~~three~~ ~~months ended~~ ~~March 27, 2022~~ ~~differed from the U.S. federal statutory rate of 21% primarily~~ due to state income taxes and ~~nondeductible expenses for~~non-deductible executive compensation, partially offset by ~~various~~ tax credits ~~whereas,~~and other items. Fiscal 2024 was further impacted by the impairment charge, which reduced the amount of income reflected in the Company’s estimated annual effective tax ~~rate for the~~ ~~nine~~ ~~months ended~~ ~~March 27, 2022~~ ~~differed from the U.S. federal statutory rate of 21% primarily due to excess tax benefits from stock based compensation, partially offset by state income taxes.~~rate.

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various foreign countries. The ~~Company completed its U.S. federal examination for fiscal~~ ~~2018,~~ ~~however,~~Company’s fiscal years 2020,2021, and ~~2021~~2022 remain subject to U.S. federal examination. Due to ongoing state examinations and nonconformity with the U.S. federal statute of limitations for assessment, certain states remain open from fiscal 2016. The Company's foreign income tax filings from fiscal ~~2018~~2017 are open for examination by its respective foreign tax authorities, mainly Canada and Brazil.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At ~~April 2,~~December 31, 2023, the Company has an unrecognized tax benefit, including accrued interest and penalties, of approximately ~~$1.4~~$1.6 million. The Company believes that $0.1 million of unrecognized tax positions will be resolved over the next twelve months.

The Company’s management reviews the results of its operations by the following three business segments:

Segment performance is measured based on contribution margin, which includes only the direct controllable revenue and operating expenses of the segments. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead (see (a) below), nor does it include depreciation and amortization, other (income) expense, net and income taxes, or stock-based compensation, which are included within corporate overhead. Assets and liabilities are reviewed at the consolidated level by management and not accounted for by segment.

													Three Months Ended						Six Months Ended
	Three Months Ended						Nine Months Ended						December 31, 2023			January 1, 2023			December 31, 2023			January 1, 2023
	April 2, 2023			March 27, 2022			April 2, 2023			March 27, 2022			(in thousands)
Net Revenues:	(in thousands)
Segment Net Revenues:
Consumer Floral & Gifts	$	233,019		$	264,243		$	672,248		$	760,555		$	254,835		$	277,049		$	397,029		$	439,229
BloomNet		36,968			38,448			103,187			107,212			27,236			32,852			56,106			66,219
Gourmet Foods & Gift Baskets		147,863			167,402			844,522			855,830			539,963			588,431			638,072			696,659
Corporate		36			43			152			157			279			72			549			116
Intercompany eliminations		(320	)		(560	)		(1,062	)		(1,761	)		(259	)		(527	)		(652	)		(742	)
Total net revenues	$	417,566		$	469,576		$	1,619,047		$	1,721,993		$	822,054		$	897,877		$	1,091,104		$	1,201,481

Operating Income (Loss):
Operating Income:
Segment Contribution Margin:
Consumer Floral & Gifts	$	26,136		$	20,523		$	64,832		$	77,869		$	10,593		$	27,886		$	19,419		$	38,696
BloomNet		10,982			9,783			29,847			32,530			9,088			9,348			18,475			18,865
Gourmet Foods & Gift Baskets		(78,480	)		(17,134	)		26,313			85,695			118,153			123,503			107,125			104,793
Segment Contribution Margin Subtotal		(41,362	)		13,172			120,992			196,094			137,834			160,737			145,019			162,354
Corporate (a)		(30,015	)		(26,735	)		(91,595	)		(90,694	)		(32,432	)		(31,297	)		(64,000	)		(61,580	)
Depreciation and amortization		(13,267	)		(12,693	)		(40,276	)		(36,251	)		(14,152	)		(14,315	)		(27,346	)		(27,009	)
Operating income (loss)	$	(84,644	)	$	(26,256	)	$	(10,879	)	$	69,149
Operating income													$	91,250		$	115,125		$	53,673		$	73,765

(a) 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 Customer Service Center functions, as well as ~~Stock-Based Compensation.~~Stock-based compensation. 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, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.

The following tables represent a disaggregation of revenue from contracts with customers, by channel:

		Three Months Ended																									Three Months Ended
		Consumer Floral & Gifts				BloomNet				Gourmet Foods & Gift Baskets				Corporate and Eliminations						Consolidated							Consumer Floral & Gifts				BloomNet				Gourmet Foods & Gift Baskets				Corporate and Eliminations						Consolidated
		April 2, 2023		March 27, 2022		April 2, 2023		March 27, 2022		April 2, 2023		March 27, 2022		April 2, 2023			March 27, 2022			April 2, 2023			March 27, 2022				December 31, 2023		January 1, 2023		December 31, 2023		January 1, 2023		December 31, 2023		January 1, 2023		December 31, 2023			January 1, 2023			December 31, 2023			January 1, 2023
Net revenues
E-commerce		$	230,403	$	261,707	$	-	$	-	$	127,398	$	148,070	$	-		$	-		$	357,801		$	409,777			$	252,845	$	275,081	$	-	$	-	$	485,561	$	515,329	$	-		$	-		$	738,406		$	790,410
Other			2,616		2,536		36,968		38,448		20,465		19,332		(284	)		(517	)		59,765			59,799				1,990		1,968		27,236		32,852		54,402		73,102		20			(455	)		83,648			107,467
Total net revenues		$	233,019	$	264,243	$	36,968	$	38,448	$	147,863	$	167,402	$	(284	)	$	(517	)	$	417,566		$	469,576			$	254,835	$	277,049	$	27,236	$	32,852	$	539,963	$	588,431	$	20		$	(455	)	$	822,054		$	897,877

*Other revenues detail*	*Other revenues detail*																									*Other revenues detail*
Retail and other			2,616		2,536		-		-		1,686		1,656		-			-			4,302			4,192				1,990		1,968		-		-		4,296		4,313		-			-			6,286			6,281
Wholesale			-		-		14,695		15,322		18,779		17,676		-			-			33,474			32,998				-		-		8,706		12,054		50,106		68,789		-			-			58,812			80,843
BloomNet services			-		-		22,273		23,126		-		-		-			-			22,273			23,126				-		-		18,530		20,798		-		-		-			-			18,530			20,798
Corporate			-		-		-		-		-		-		36			43			36			43				-		-		-		-		-		-		279			72			279			72
Eliminations			-		-		-		-		-		-		(320	)		(560	)		(320	)		(560	)			-		-		-		-		-		-		(259	)		(527	)		(259	)		(527	)
Total other revenues		$	2,616	$	2,536	$	36,968	$	38,448	$	20,465	$	19,332	$	(284	)	$	(517	)	$	59,765		$	59,799			$	1,990	$	1,968	$	27,236	$	32,852	$	54,402	$	73,102	$	20		$	(455	)	$	83,648		$	107,467

The Company currently leases plants, warehouses, offices, store facilities, and equipment under various leases through fiscal 2036. Most lease agreements are of a long-term nature (over a year), although the Company does also enter into short-term leases, primarily for seasonal needs. Lease agreements may contain renewal options and rent escalation clauses and require the Company to pay real estate taxes, insurance, common area maintenance and operating expenses applicable to the leased properties. The Company accounts for its leases in accordance with ASC 842.

At contract inception, ~~we determine~~the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time, by assessing whether ~~we have~~the Company has the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset.

At the lease commencement date, ~~we determine~~the Company determines if a lease should be classified as an operating or a finance lease ~~(we~~(the Company currently ~~have~~has no finance leases) and ~~recognize~~recognizes a corresponding lease liability and a right-of-use asset on ~~our~~its Balance Sheet. The lease liability is initially and subsequently measured as the present value of the remaining fixed minimum rental payments (including base rent and fixed common area maintenance) using discount rates as of the commencement date. Variable payments (including most utilities, real estate taxes, insurance and variable common area maintenance) are expensed as incurred. Further, wethe Company elected a short-term lease exception policy, permitting usit to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The right-of-use asset is initially and subsequently measured at the carrying amount of the lease liability adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use asset. Right-of-use assets are assessed for impairment using the long-lived assets impairment guidance. The discount rate used to determine the present value of lease payments is ~~our~~the Company’s estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as wethe Company generally cannot determine the interest rate implicit in the lease.

~~We recognize~~The Company recognizes expense for ~~our~~its operating leases on a straight-line basis over the lease term. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Renewal option periods are included in the measurement of lease liability, where the exercise is reasonably certain to occur. Key estimates and judgments in accounting for leases include how ~~we determine:~~the Company determines: (1) lease payments, (2) lease term, and (3) the discount rate used in calculating the lease liability.

Maturities of lease liabilities in accordance with ASC 842 as of ~~April 2,~~December 31, 2023 and reconciliation to balance sheet are as follows (in thousands):

In ~~March~~ of ~~2018,~~ a putative class action lawsuit was filed against a subsidiary of the Company (the “Subsidiary”) in the U.S. District Court for the District of Oregon, Medford Division (the “Court”), alleging violations of the federal Fair Labor Standards Act (FLSA) and Oregon state law. The complaint was brought on behalf of a putative class of call center workers and alleged that certain Subsidiary policies and practices resulted in class members’ performance of unpaid work. The plaintiff sought class certification, compensation for alleged unpaid and underpaid wages, civil penalties, prejudgment interest, liquidated damages, litigation costs, and attorneys’ fees. Following mediation, the parties reached an agreement in ~~April 2022~~ ~~to resolve all claims. In~~ ~~September 2022,~~ ~~the Court granted final approval of the settlement agreement, and in~~ ~~November 2022,~~ ~~the Company remitted payment of approximately $2.9 million, which was previously accrued during the quarter ended~~ ~~March 27, 2022,~~ ~~and was included in "Accrued expenses" in the consolidated balance sheets at~~ ~~July 3, 2022.~~ ~~In entering into the settlement agreement, the Subsidiary made~~ no ~~admission of liability.~~

~~In addition, there~~There are various claims, lawsuits, and pending actions against the Company and its subsidiaries incident to the operations of its businesses. It is the opinion of management, after consultation with counsel, that the final resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF ~~OPERATIONS.~~OPERATIONS

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 year ended July ~~3, 2022~~2, 2023. 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 year ended July ~~3, 2022~~2, 2023 under the heading “Risk Factors” and Part II-Other Information, Item 1A in this Form 10-Q.

1-800-FLOWERS.COM, Inc. and its subsidiaries (collectively, the “Company”) is a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships. The Company’s e-commerce business platform features an 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®, ~~Stock Yards®~~ and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge across our portfolio of brands, 1-800-FLOWERS.COM, Inc. 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 members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; and Alice’s Table®, a lifestyle business offering fully digital ~~livestreaming and on demand~~ floral, culinary and other experiences to guests across the country.

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 year ended July ~~3, 2022.~~

On October 27, 2021, the Company completed its acquisition of Vital Choice Seafood LLC (“Vital Choice”), a provider of wild-caught seafood and sustainably farmed shellfish, pastured proteins, organic foods, and marine-sourced nutritional supplements. The Company utilized its existing credit facility to fund the $20.0 million purchase (subject to certain working capital and other adjustments), which included tradenames, customer lists, websites and operations. Vital Choice revenues were approximately $27.8 million during its most recent year ended December 31, 2020 - see ~~Note 4 –Acquisitions in Item 1~~2, 2023.

On December 31, 2021, the Company completed its acquisition of Alice’s Table LLC (“Alice’s Table”), a lifestyle business offering fully digital livestreaming and on demand floral, culinary and other experiences to guests across the country. The Company utilized existing cash of $0.8 million, converted the existing accounts receivable from Alice’s Table of $0.3 million and its previous $0.3 million cost method investment in Alice’s Table, in order to acquire 100% ownership in Alice’s Table, which included tradenames, customer lists, websites and operations. Alice’s Table revenues were approximately $3.8 million during the twelve-month period ended September 30, 2021 - see ~~Note 4 –Acquisitions in Item 1~~.

On January 10, 2023, the Company completed its acquisition of certain assets of the Things Remembered brand, a provider of personalized gifts, whose operations will be integrated within the PersonalizationMall.com brand, in the Consumer Floral & Gifts segment. The Company used cash on hand to fund the $5.0 million purchase, which included the intellectual property, customer list, certain inventory, and equipment. The acquisition did not include Things Remembered retail stores. Things Remembered’s annual revenues from its ecommerce operations, based on its most recently available unaudited financial information was $30.4 million for the twelve months ended November 30, 2022 - see ~~Note 4 –Acquisitions in Item 1~~.

On August 29, 2022, the Company entered into a Third Amendment to the Company's 2019 Credit Agreement. The Third Amendment amends the 2019 Credit Agreement to, among other modifications, (A) alter the financial maintenance covenants set forth therein by (1) increasing the required maximum consolidated leverage ratio, for the reference period ending October 2, 2022, from 3.25 to 1.00 to 4.25 to 1.00 and (2) decreasing the required minimum consolidated fixed charge coverage ratio, for the reference periods ending October 2, 2022, January 1, 2023, and April 2, 2023, from 1.50 to 1.00 to 1.00 to 1.00 and (B) increase the amount of certain capital expenditures that may be disregarded for purposes of calculating the consolidated fixed charge coverage ratio from $25.0 million to $35.0 million (See ~~Note 8 - Debt, in Item 1, for details).~~

Overall, ~~consumer behavior continues~~broader macro-economic conditions continue to reflect the significant geo-political, inflationary forces, interest rate hikes, and fears of a recession, that are affecting both their discretionary and nondiscretionary spending. Throughout the current fiscal year discretionary spending remained pressured andimpact our consumers as they continue to moderate their ~~purchases for~~discretionary income. Consumers remain pressured by persistent inflation, higher interest rates, and the resumption of student loan repayments. Throughout the first half of fiscal 2024, we have seen that customer spending on “Everyday” gifting occasions has slowed, whereas spending for the major holidays has held up better. However, customers did remain more conservative regarding their holiday spending than originally anticipated. In line with this, total consolidated revenues decreased 8.4% to $822.1 million and 9.2% to ~~a lesser extent, “Holiday” gifting occasions.~~

~~We expect consumers to remain cautious in~~$1.09 billion during the ~~face of macroeconomic pressures, including high inflation, rising interest rates,~~three and ~~fear of recession. For~~six months ended December 31, 2023, respectively, compared with the ~~balance~~same periods of the prior year. As we look ahead to the second half of fiscal ~~year,~~2024, we ~~expect that customers will~~ continue to ~~moderate their spending on everyday gifting occasions, and while we also~~ expect ~~that~~ our ~~customers will continue~~sales trends to shop for the important people in their lives during the major upcoming holidays, including Mother’s Day, the fourth quarter of our fiscal year is more heavily weighted towards everyday gifting occasions.improve albeit at a slower pace than initially anticipated.

The challenging macro-economic conditions that have affected our customers have also impacted our operating costs. During the second quarter of fiscal 2022, in-bound and out-bound shipping, commodity, labor and fuel costs began to surge, and escalated throughout the balance of the year and into ~~our first quarter of~~ fiscal 2023. During our second quarter and third quarter of ~~the current~~ fiscal ~~year,~~2023, while certain commodity prices ~~remain~~remained near historical highs, we began to see a more stable labor market, and significant year-over-year reductions in ocean freight costs.

As a result of these trends, combined with our strategic pricing initiatives, ~~and~~ automation efforts, and other internal management initiatives, we ~~expect to continue~~started to see year-over-year improvement in gross margin ~~improvement during~~commencing in the ~~fourth~~second quarter of ~~our~~ fiscal ~~year,~~2023. These trends and initiatives continued into fiscal 2024 and we saw a significant improvement in year-over-year gross margin in the second quarter and first half of fiscal 2024. This improvement and a reduction of expenses helped to offset the aforementioned year-over-year decline in sales.

During the quarter ended December 31, 2023, as ~~we cycle against the sharp inflationary period~~a result of a ~~year ago. Further,~~decline in the actual and projected revenue for the Company’s PersonalizationMall tradename, as well as a ~~management team, we are focusing our efforts~~higher discount rate resulting from the higher interest rate environment, the Company determined that an impairment assessment was required for this tradename. This assessment resulted in the Company recording a non-cash impairment charge of $19.8 million to reduce the recorded carrying value of the PersonalizationMall tradename. See Note 5 – Goodwill and Intangible Assets, Net for further information.

On January 10, 2023, the Company completed its acquisition of certain assets of the Things Remembered brand, a provider of personalized gifts, whose operations have been integrated within the PersonalizationMall.com brand, in the Consumer Floral & Gifts segment. The Company used cash on hand to fund the ~~areas that are within our control, mitigating topline challenges through gross margin improvement~~$5.0 million purchase, which included intellectual property, customer list, certain inventory, and ~~expense management efforts.~~equipment - see Note 3 –Acquisitions in Item 1.

On June 27, 2023, the Company entered into a Third Amended and Restated Credit Agreement to, among other modifications, (i) increase the amount of the outstanding term loan from approximately $150 million to $200 million, (ii) decrease the amount of the commitments in respect of the revolving credit facility from $250 million to $225 million subject to a seasonal reduction to an aggregate amount of $125 million for the period from January 1 to August 1, (iii) extend the maturity date of the outstanding term loan and the revolving credit facilities by approximately 48 months to June 27, 2028, and (iv) increase the applicable interest rate margins for SOFR and base rate loans by 25 basis points (See Note 7 - Debt, in Item 1, for details).

~~Based on its third quarter performance and outlook for the balance of the year, the~~

The Company is updating its ~~fiscal 2023 guidance. This~~Fiscal 2024 guidance to reduce its revenue outlook ~~includes a continuation of~~for the ~~challenging consumer environment, which is~~full year, while maintaining its Adjusted EBITDA and Free Cash Flow expectations, as the improvement in gross profit margin and the company’s expense optimization efforts are expected to ~~be mitigated by~~mitigate the ~~Company’s expense management efforts.~~softer than anticipated revenue improvement.

Refer to "Definitions of non-GAAP Financial Measures" for reconciliation of non-GAAP results to applicable GAAP results.

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. Where applicable, see the Segment Information and Results of Operations sections below for reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. ~~We do not provide a reconciliation of adjusted EBITDA guidance~~These non-GAAP financial measures are referred to ~~net income guidance~~as “non-GAAP” or ~~a reconciliation of free cash flow guidance to net cash provided by operating activities because doing so~~“adjusted” 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.

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~~Plan”) Investment appreciation/depreciation, and ~~for~~ certain items affecting period-to-period comparability. See Segment Information for details on how EBITDA and ~~adjusted~~Adjusted EBITDA were calculated for each period presented.

The Company presents EBITDA and ~~adjusted~~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~~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~~Adjusted EBITDA to determine its interest rate and to measure compliance with certain covenants. EBITDA and ~~adjusted~~Adjusted EBITDA are also used by the Company to evaluate and price potential acquisition candidates.

EBITDA and ~~adjusted~~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~~Adjusted EBITDA do not reflect changes in, or cash requirements for, the Company's working capital needs; (b) EBITDA and ~~adjusted~~Adjusted EBITDA do not reflect the significant 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 should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

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 contribution margin adjusted for certain items affecting period-to-period comparability. See Segment Information for details on how segment contribution margin was calculated for each period presented.

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 ~~these limitations~~this limitation when using this measure by looking at other GAAP measures, such as operating income and net income.

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. See Segment Information below for details on how adjusted net income (loss) and adjusted or comparable net income (loss) per common share were calculated for each period presented.

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.

We define free cash flow as net cash provided by 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 presents the net revenues, gross profit and segment contribution margin from each of the Company’s business segments, as well as consolidated EBITDA, and ~~adjusted~~Adjusted EBITDA.

	Three Months Ended																							Three Months Ended
	April 2, 2023			Goodwill and Intangible Impairment		Things Remembered Transaction Costs		As Adjusted (non-GAAP) April 2, 2023			March 27, 2022			Vital Choice and Alice's Table Transaction Costs		Litigation Settlement		As Adjusted (non-GAAP) March 27, 2022			% Change			December 31, 2023			Intangible Impairment		As Adjusted (non-GAAP) December 31, 2023			January 1, 2023			Things Remembered Transaction Costs		As Adjusted (non-GAAP) January 1, 2023			% Change
Net revenues:
Consumer Floral & Gifts	$	233,019		$	-	$	-	$	233,019		$	264,243		$	-	$	-	$	264,243			-11.8	%	$	254,835		$	-	$	254,835		$	277,049		$	-	$	277,049			-8.0	%
BloomNet		36,968							36,968			38,448							38,448			-3.8	%		27,236					27,236			32,852					32,852			-17.1	%
Gourmet Foods & Gift Baskets		147,863							147,863			167,402							167,402			-11.7	%		539,963					539,963			588,431					588,431			-8.2	%
Corporate		36							36			43							43			-16.3	%		279					279			72					72			287.5	%
Intercompany eliminations		(320	)						(320	)		(560	)						(560	)		42.9	%		(259	)				(259	)		(527	)				(527	)		50.9	%
Total net revenues	$	417,566		$	-	$	-	$	417,566		$	469,576		$	-	$	-	$	469,576			-11.1	%	$	822,054		$	-	$	822,054		$	897,877		$	-	$	897,877			-8.4	%

Gross profit:
Consumer Floral & Gifts	$	88,317						$	88,317		$	96,875						$	96,875			-8.8	%	$	109,176				$	109,176		$	112,274				$	112,274			-2.8	%
		37.9	%						37.9	%		36.7	%						36.7	%					42.8	%				42.8	%		40.5	%				40.5	%

BloomNet		15,720							15,720			14,895							14,895			5.5	%		12,974					12,974			13,879					13,879			-6.5	%
		42.5	%						42.5	%		38.7	%						38.7	%					47.6	%				47.6	%		42.2	%				42.2	%

Gourmet Foods & Gift Baskets		36,371							36,371			42,343							42,343			-14.1	%		233,200					233,200			241,418					241,418			-3.4	%
		24.6	%						24.6	%		25.3	%						25.3	%					43.2	%				43.2	%		41.0	%				41.0	%

Corporate		32							32			(22	)						(22	)		245.5	%		347					347			195					195			77.9	%
		88.9	%						88.9	%		-51.2	%						-51.2	%					124.4	%				124.4	%		270.8	%				270.8	%

Total gross profit	$	140,440		$	-	$	-	$	140,440		$	154,091		$	-	$	-	$	154,091			-8.9	%	$	355,697		$	-	$	355,697		$	367,766		$	-	$	367,766			-3.3	%
		33.6	%		-		-		33.6	%		32.8	%		-		-		32.8	%					43.3	%		-		43.3	%		41.0	%		-		41.0	%

EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
Consumer Floral & Gifts	$	26,136		$	-			$	26,136		$	20,523		$	-	$	-	$	20,523			27.3	%	$	10,593		$	19,762	$	30,355		$	27,886		$	-	$	27,886			8.9	%
BloomNet		10,982							10,982			9,783							9,783			12.3	%		9,088					9,088			9,348					9,348			-2.8	%
Gourmet Foods & Gift Baskets		(78,480	)		64,586				(13,894	)		(17,134	)				2,900		(14,234	)		2.4	%		118,153					118,153			123,503					123,503			-4.3	%
Segment Contribution Margin Subtotal		(41,362	)		64,586		-		23,224			13,172			-		2,900		16,072			44.5	%		137,834			19,762		157,596			160,737			-		160,737			-2.0	%
Corporate (b)		(30,015	)				201		(29,814	)		(26,735	)		25				(26,710	)		-11.6	%		(32,432	)				(32,432	)		(31,297	)		243		(31,054	)		-4.4	%
EBITDA (non-GAAP)		(71,377	)		64,586		201		(6,590	)		(13,563	)		25		2,900		(10,638	)		38.1	%		105,402			19,762		125,164			129,440			243		129,683			-3.5	%
Add: Stock-based compensation		2,487							2,487			1,507							1,507			65.0	%		2,231					2,231			1,899					1,899			17.5	%
Add: Compensation charge related to NQDC Plan Investment (Depreciation) Appreciation		(1,446	)						(1,446	)		(2,881	)						(2,881	)		49.8	%
Add: Compensation charge related to NQDC Plan Investment Appreciation (Depreciation)																									2,682					2,682			(196	)				(196	)		1468.4	%
Adjusted EBITDA (non-GAAP)	$	(70,336	)	$	64,586	$	201	$	(5,549	)	$	(14,937	)	$	25	$	2,900	$	(12,012	)		53.8	%	$	110,315		$	19,762	$	130,077		$	131,143		$	243	$	131,386			-1.0	%

	Nine Months Ended																							Six Months Ended
	April 2, 2023			Goodwill and Intangible Impairment		Things Remembered Transaction Costs		As Adjusted (non-GAAP) April 2, 2023			March 27, 2022			Vital Choice and Alice's Table Transaction Costs		Litigation Settlement		As Adjusted (non-GAAP) March 27, 2022			% Change			December 31, 2023			Intangible Impairment		As Adjusted (non-GAAP) December 31, 2023			January 1, 2023			Things Remembered Transaction Costs		As Adjusted (non-GAAP) January 1, 2023			% Change
Net revenues:
Consumer Floral & Gifts	$	672,248		$	-	$	-	$	672,248		$	760,555		$	-	$	-	$	760,555			-11.6	%	$	397,029		$	-	$	397,029		$	439,229		$	-	$	439,229			-9.6	%
BloomNet		103,187							103,187			107,212							107,212			-3.8	%		56,106					56,106			66,219					66,219			-15.3	%
Gourmet Foods & Gift Baskets		844,522							844,522			855,830							855,830			-1.3	%		638,072					638,072			696,659					696,659			-8.4	%
Corporate		152							152			157							157			-3.2	%		549					549			116					116			373.3	%
Intercompany eliminations		(1,062	)						(1,062	)		(1,761	)						(1,761	)		39.7	%		(652	)				(652	)		(742	)				(742	)		12.1	%
Total net revenues	$	1,619,047		$	-	$	-	$	1,619,047		$	1,721,993		$	-	$	-	$	1,721,993			-6.0	%	$	1,091,104		$	-	$	1,091,104		$	1,201,481		$	-	$	1,201,481			-9.2	%

Gross profit:
Consumer Floral & Gifts	$	262,510		$	-	$	-	$	262,510		$	302,903		$	-	$	-	$	302,903			-13.3	%	$	165,498		$	-	$	165,498		$	174,193		$	-	$	174,193			-5.0	%
		39.0	%						39.0	%		39.8	%						39.8	%					41.7	%				41.7	%		39.7	%				39.7	%

BloomNet		44,086							44,086			46,325							46,325			-4.8	%		27,472					27,472			28,366					28,366			-3.2	%
		42.7	%						42.7	%		43.2	%						43.2	%					49.0	%				49.0	%		42.8	%				42.8	%

Gourmet Foods & Gift Baskets		302,902							302,902			308,745							308,745			-1.9	%		264,107					264,107			266,531					266,531			-0.9	%
		35.9	%						35.9	%		36.1	%						36.1	%					41.4	%				41.4	%		38.3	%				38.3	%

Corporate		166							166			82							82			102.4	%		548					548			134					134			309.0	%
		109.2	%						109.2	%		52.2	%						52.2	%					99.8	%				99.8	%		115.5	%				115.5	%

Total gross profit	$	609,664		$	-	$	-	$	609,664		$	658,055		$	-	$	-	$	658,055			-7.4	%	$	457,625		$	-	$	457,625		$	469,224		$	-	$	469,224			-2.5	%
		37.7	%		-		-		37.7	%		38.2	%		-		-		38.2	%					41.9	%		-		41.9	%		39.1	%		-		39.1	%

EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
Consumer Floral & Gifts	$	64,832		$	-	$	-	$	64,832		$	77,869		$	-	$	-	$	77,869			-16.7	%	$	19,419		$	19,762	$	39,181		$	38,696		$	-	$	38,696			1.3	%
BloomNet		29,847							29,847			32,530							32,530			-8.2	%		18,475					18,475			18,865					18,865			-2.1	%
Gourmet Foods & Gift Baskets		26,313			64,586				90,899			85,695					2,900		88,595			2.6	%		107,125					107,125			104,793			-		104,793			2.2	%
Segment Contribution Margin Subtotal		120,992			64,586		-		185,578			196,094			-		2,900		198,994			-6.7	%		145,019			19,762		164,781			162,354			-		162,354			1.5	%
Corporate (b)		(91,595	)				444		(91,151	)		(90,694	)		540				(90,154	)		-1.1	%		(64,000	)				(64,000	)		(61,580	)		243		(61,337	)		-4.3	%
EBITDA (non-GAAP)		29,397			64,586		444		94,427			105,400			540		2,900		108,840			-13.2	%		81,019			19,762		100,781			100,774			243		101,017			-0.2	%
Add: Stock-based compensation		5,941							5,941			6,803							6,803			-12.7	%		4,595					4,595			3,454					3,454			33.0	%
Add: Compensation charge related to NQDC Plan Investment (Depreciation) Appreciation		(2,548	)						(2,548	)		111							111			-2,395.5	%
Add: Compensation charge related to NQDC Plan Investment Appreciation (Depreciation)																									2,178					2,178			(1,102	)				(1,102	)		297.6	%
Adjusted EBITDA (non-GAAP)	$	32,790		$	64,586	$	444	$	97,820		$	112,314		$	540	$	2,900	$	115,754			-15.5	%	$	87,792		$	19,762	$	107,554		$	103,126		$	243	$	103,369			4.0	%

(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 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 Customer Service Center functions, as well as ~~Stock-Based Compensation.~~Stock-based compensation. 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, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.

Net revenues consist primarily of the selling price of the merchandise, service or outbound shipping charges, less discounts, returns and credits.

Net revenues decreased ~~11.1%~~8.4% and ~~6.0%~~9.2% during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same periods of the prior year, due to lower order volume across all segments, reflecting a continuation of the trends that ~~we have~~the Company had experienced throughout ~~this~~the prior fiscal year, ~~in which~~as consumer discretionary ~~spending~~income remains pressured and consumers continue to moderate their ~~spending on purchases for “Everyday” gifting occasions, and~~spending. Contributing to ~~a lesser extent, “Holiday” gifting occasions, combined with~~this decline was the prudent use of promotional offerings and advertising campaigns, ~~that~~which balance the long-term goals of the Company with strategies to improve gross margins and tightly control operating ~~spend ratios~~expenses during this challenging economic environment.

Adjusted for the non-comparative impact of Alice’s Table and Vital Choice, which were acquired on December 31, 2021 and October 27, 2021, respectively, consolidated revenues decreased 6.4% during the nine months ended April 2, 2023, in comparison to the prior year period. The Company acquired Things Remembered on January 10, 2023 and launched the brand on its e-commerce platform in April 2023. ~~As such,~~ Things Remembered revenues were ~~immaterial~~not significant during the three and ~~nine~~six months ended ~~April 2, 2023.~~

To provide perspective, our post-pandemic fiscal 2023 (three and nine months ended April 2, 2023) revenues exceeded our pre-pandemic fiscal 2019 (three and nine months ended March 31, 2019) revenues by 68.1% and 63.7%, respectively. This revenue growth includes revenues attributable to Shari’s Berries, which was acquired in August 2019, PersonalizationMall, which was acquired on August 3, 2020, Vital Choice, which was acquired on October 27, 2021, and Alice's Table, which was acquired on December 31, 2021. Excluding revenues from these acquisitions, pro-forma, post-pandemic revenues for the three and nine months ended April 2, 2023, exceeded pre-pandemic (three and nine months ended March 31, 2019) revenues by 41.4% and 37.4%, respectively.2023.

		Three Months Ended																																					Three Months Ended
		Consumer Floral & Gifts							BloomNet							Gourmet Foods & Gift Baskets							Corporate and Eliminations						Consolidated										Consumer Floral & Gifts							BloomNet							Gourmet Foods & Gift Baskets							Corporate and Eliminations						Consolidated
		April 2, 2023		March 27, 2022		% Change			April 2, 2023		March 27, 2022		% Change			April 2, 2023		March 27, 2022		% Change			April 2, 2023			March 27, 2022			April 2, 2023			March 27, 2022			% Change				December 31, 2023		January 1, 2023		% Change			December 31, 2023		January 1, 2023		% Change			December 31, 2023		January 1, 2023		% Change			December 31, 2023			January 1, 2023			December 31, 2023			January 1, 2023			% Change
Net revenues	Net revenues																																					Net revenues
E-commerce		$	230,403	$	261,707		-12.0	%	$	-	$	-		-	%	$	127,398	$	148,070		-14.0	%	$	-		$	-		$	357,801		$	409,777			-12.7	%		$	252,845	$	275,081		-8.1	%	$	-	$	-		-	%	$	485,561	$	515,329		-5.8	%	$	-		$	-		$	738,406		$	790,410			-6.6	%
Other			2,616		2,536		3.2	%		36,968		38,448		-3.8	%		20,465		19,332		5.9	%		(284	)		(517	)		59,765			59,799			-0.1	%			1,990		1,968		1.1	%		27,236		32,852		-17.1	%		54,402		73,102		-25.6	%		20			(455	)		83,648			107,467			-22.2	%
Total net revenues		$	233,019	$	264,243		-11.8	%	$	36,968	$	38,448		-3.8	%	$	147,863	$	167,402		-11.7	%	$	(284	)	$	(517	)	$	417,566		$	469,576			-11.1	%		$	254,835	$	277,049		-8.0	%	$	27,236	$	32,852		-17.1	%	$	539,963	$	588,431		-8.2	%	$	20		$	(455	)	$	822,054		$	897,877			-8.4	%

Other revenues detail	Other revenues detail																																					Other revenues detail
Retail and other			2,616		2,536		3.2	%		-		-		-			1,686		1,656		1.8	%		-			-			4,302			4,192			2.6	%			1,990		1,968		1.1	%		-		-		-			4,296		4,313		-0.4	%		-			-			6,286			6,281			0.1	%
Wholesale			-		-		-			14,695		15,322		-4.1	%		18,779		17,676		6.2	%		-			-			33,474			32,998			1.4	%			-		-		-			8,706		12,054		-27.8	%		50,106		68,789		-27.2	%		-			-			58,812			80,843			-27.3	%
BloomNet services			-		-		-			22,273		23,126		-3.7	%		-		-		-			-			-			22,273			23,126			-3.7	%			-		-		-			18,530		20,798		-10.9	%		-		-		-			-			-			18,530			20,798			-10.9	%
Corporate			-		-		-			-		-		-			-		-		-			36			43			36			43			-16.3	%			-		-		-			-		-		-			-		-		-			279			72			279			72			287.5	%
Eliminations			-		-		-			-		-		-			-		-		-			(320	)		(560	)		(320	)		(560	)		42.9	%			-		-		-			-		-		-			-		-		-			(259	)		(527	)		(259	)		(527	)		50.9	%
Total other revenues		$	2,616		2,536		3.2	%	$	36,968	$	38,448		-3.8	%	$	20,465	$	19,332		5.9	%	$	(284	)	$	(517	)	$	59,765			59,799			-0.1	%		$	1,990		1,968		1.1	%	$	27,236	$	32,852		-17.1	%	$	54,402	$	73,102		-25.6	%	$	20		$	(455	)	$	83,648		$	107,467			-22.2	%

		Nine Months Ended																																					Six Months Ended
		Consumer Floral & Gifts							BloomNet							Gourmet Foods & Gift Baskets							Corporate and Eliminations						Consolidated										Consumer Floral & Gifts							BloomNet							Gourmet Foods & Gift Baskets							Corporate and Eliminations						Consolidated
		April 2, 2023		March 27, 2022		% Change			April 2, 2023		March 27, 2022		% Change			April 2, 2023		March 27, 2022		% Change			April 2, 2023			March 27, 2022			April 2, 2023			March 27, 2022			% Change				December 31, 2023		January 1, 2023		% Change			December 31, 2023		January 1, 2023		% Change			December 31, 2023		January 1, 2023		% Change			December 31, 2023			January 1, 2023			December 31, 2023			January 1, 2023			% Change
Net revenues																																						Net revenues
E-commerce		$	665,866	$	753,813		-11.7	%	$	-	$	-		-	%	$	721,267	$	746,857		-3.4	%	$	-		$	-		$	1,387,133		$	1,500,670			-7.6	%		$	393,180	$	435,463		-9.7	%	$	-	$	-		-	%	$	555,137	$	593,869		-6.5	%	$	-		$	-		$	948,317		$	1,029,332			-7.9	%
Other			6,382		6,742		-5.3	%		103,187		107,212		-3.8	%		123,255		108,973		13.1	%		(910	)		(1,604	)		231,914			221,323			4.8	%			3,849		3,766		2.2	%		56,106		66,219		-15.3	%		82,935		102,790		-19.3	%		(103	)		(626	)		142,787			172,149			-17.1	%
Total net revenues		$	672,248	$	760,555		-11.6	%	$	103,187	$	107,212		-3.8	%	$	844,522	$	855,830		-1.3	%	$	(910	)	$	(1,604	)	$	1,619,047		$	1,721,993			-6.0	%		$	397,029	$	439,229		-9.6	%	$	56,106	$	66,219		-15.3	%	$	638,072	$	696,659		-8.4	%	$	(103	)	$	(626	)	$	1,091,104		$	1,201,481			-9.2	%

Other revenues detail	Other revenues detail																																					Other revenues detail
Retail and other			6,382		6,742		-5.3	%		-		-		-			7,907		8,084		-2.2	%		-			-			14,289			14,826			-3.6	%			3,849		3,766		2.2	%		-		-		-			6,230		6,221		0.1	%		-			-			10,079			9,987			0.9	%
Wholesale			-		-		-			40,370		39,890		1.2	%		115,348		100,889		14.3	%		-			-			155,718			140,779			10.6	%			-		-		-			20,503		25,675		-20.1	%		76,705		96,569		-20.6	%		-			-			97,208			122,244			-20.5	%
BloomNet services			-		-		-			62,817		67,322		-6.7	%		-		-		-			-			-			62,817			67,322			-6.7	%			-		-		-			35,603		40,544		-12.2	%		-		-		-			-			-			35,603			40,544			-12.2	%
Corporate			-		-		-			-		-		-			-		-		-			152			157			152			157			-3.2	%			-		-		-			-		-		-			-		-		-			549			116			549			116			373.3	%
Eliminations			-		-		-			-		-		-			-		-		-			(1,062	)		(1,761	)		(1,062	)		(1,761	)		39.7	%			-		-		-			-		-		-			-		-		-			(652	)		(742	)		(652	)		(742	)		12.1	%
Total other revenues		$	6,382		6,742		-5.3	%	$	103,187	$	107,212		-3.8	%	$	123,255	$	108,973		13.1	%	$	(910	)	$	(1,604	)	$	231,914			221,323			4.8	%		$	3,849		3,766		2.2	%	$	56,106	$	66,219		-15.3	%	$	82,935	$	102,790		-19.3	%	$	(103	)	$	(626	)	$	142,787		$	172,149			-17.1	%

E-commerce revenues (combined online and telephonic) decreased ~~12.7%~~6.6% and ~~7.6%~~7.9% during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same periods of the prior year, primarily due to the decline in demand across all our segments, as a result of ~~a decline in demand for “Everyday” gifts within all our segments, attributable to~~ the macro-economic conditions noted above, which have negatively impacted consumer discretionary ~~spending.~~spending, combined with planned reductions in advertising spend.

During the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, the Company fulfilled approximately ~~4.6~~7.9 million and ~~16.3~~10.5 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of ~~15.8%~~9.0% and ~~12.7%~~10.8%, respectively, compared to the same periods of the prior year. During the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, average order value increased ~~3.8%~~2.7% and ~~5.9%~~3.4%, to ~~$78.25~~$93.14 and ~~$85.01,~~$90.06, respectively, as a result of ~~strategic price increases, and~~ product mix into higher price point ~~items.~~

~~Excluding the impact of the acquisitions of Vital Choice~~items, including bundles, and ~~Alice’s Table, pro-forma e-commerce revenues declined 8.1% during the nine months ended April 2, 2023, compared to the same period of the prior year.~~customer mix with more affluent consumers buying at a higher rate than less affluent.

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 six months ended ~~April 2,~~December 31, 2023, ~~were consistent with~~decreased 22.2% and 17.1%, respectively, compared to the same ~~period~~periods of the prior year, ~~as higher~~due to lower wholesale volumes within the Gourmet Foods & Gift Baskets segment, as ~~a result of increased spring and Easter volume, offset~~well as lower ~~revenues within the~~ BloomNet ~~segment~~revenues due to ~~the overall macro-economic conditions.~~

Other revenues increased 4.8% during the nine months ended April 2, 2023, compared to the same period of the prior year, due to increased wholesale product demand within the Gourmet Foods & Gift Baskets segment, as consumers returned to in person “brick-and-mortar” shopping,lower shop-to-shop volumes, as well as ~~increased spring and Easter demand, partially offset by lower revenues within the BloomNet segment due to the overall macro-economic conditions.~~wholesale volumes.

Consumer Floral & Gifts – this segment, which includes the operations of the 1-800-Flowers.com, ~~and~~ PersonalizationMall, ~~brands, as well as~~and Alice’s Table ~~subsequent to its acquisition on December 31, 2021,~~brands, and the Things Remembered brand, subsequent to its acquisition on January 10, 2023, derives revenue 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 within this segment decreased ~~11.8%~~8.0% and ~~11.6%~~9.6% during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same periods of the prior year, due to ~~reduced “Everyday” product demand and weaker than anticipated Valentine’s Day demand, as consumer discretionary spending continues to shrink in~~ the ~~current inflationary environment,~~continued economic pressure, which was combined with planned reductions in advertising spend, as the brands focused their efforts on improving gross margin and operating spend efficiency, in the face of softening demand.

~~Pro-forma segment revenues decreased 11.7% during~~During the ~~nine~~three and six months ended ~~April 2,~~December 31, 2023, ~~adjusting for~~Consumer Floral & Gifts orders through its e-commerce sales channel (online and telephonic sales) decreased 10.4% and 12.3%, respectively, compared to the ~~acquisition~~same periods of ~~Alice’s Table.~~the prior year, however this was partially offset by an increase in average order value of 2.6% and 3.0%, respectively, as a result of product mix into higher price point items, including bundles, and customer mix with more affluent consumers buying at a higher rate than less affluent.

BloomNet - revenues in this segment are derived from membership fees, as well as product and service offerings.

Net revenues decreased ~~3.8%~~17.1% and 15.3% during ~~both~~ the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same periods of the prior year.

The net revenue decline ~~during the three months ended April 2, 2023~~ was due to ~~a decline in~~soft wholesale product revenues, as well as lower services revenues, attributable to ~~reduced membership/transaction fee revenues associated with~~ a decline in order volume processed through the ~~network, as well as lower directory services ad revenues.~~

Net revenues declined during the nine months ended April 2, 2023 due to lower services revenues, attributable to reduced membership/transaction fee revenues associated with a decline in order volume processed through the network, as well as lower directory services ad revenues, partially offset by strong wholesale product demand in the first quarter of the fiscal year, driven by product availability, which had been constrained by supply chain issues in the prior year.network.

Gourmet Foods & Gift Baskets – this segment includes the operations of Harry & David, Wolferman’s, ~~Stock Yards,~~ Cheryl’s Cookies, The Popcorn Factory, 1-800-Baskets/DesignPac, Shari’s Berries, and Vital ~~Choice, subsequent to its October 27, 2021 acquisition date.~~Choice. 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 brand names, as well as wholesale operations.

Net revenues within this segment decreased ~~11.7%~~8.2% and ~~1.3%~~8.4% during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same periods of the prior year, as a result of lower e-commerce ~~sales,~~and wholesale revenues, primarily due to ~~the~~ macro-economic weakness, ~~which has significantly reduced “Everyday” occasion volumes,~~ combined with planned reductions in advertising spend, as the brands focused their efforts on improving gross margin and operating spend efficiency in the face of softening demand. ~~Wholesale revenues were slightly favorable~~

During the three and six months ended December 31, 2023, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 7.9% and 9.3%, respectively, compared to the same periods of the prior year, ~~due to increased Spring~~however this was partially offset by an increase in average order value of 2.3% and ~~Easter volumes,~~3.1%, respectively, as a result of product mix into higher price point items, including bundles, and ~~improved demand as~~customer mix with more affluent consumers ~~return to traditional “brick-and-mortar” shopping.~~

~~Pro-forma segment revenues decreased 2.1% during the nine months ended April 2, 2023, adjusting for the acquisition of Vital Choice.~~buying at a higher rate than less affluent.

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 ~~8.9%~~3.3% and ~~7.4%~~2.5% during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same periods of the prior year, primarily due to lower revenues as noted ~~above.~~above, partially offset by a favorable gross profit percentage.

Gross profit percentage increased 80230 and 280 basis points during the three and six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same periods of the prior year, driven by ~~improvements within the Consumer Floral & Gifts and BloomNet segments, as~~lower freight costs, a ~~result of strategic pricing initiatives and lower in-bound freight costs.~~

~~Gross profit percentage decreased by 50 basis points during the nine months ended April 2, 2023 compared to the prior year, reflecting the annualization of macro-economic headwinds~~decline in ~~the first quarter of fiscal 2023, attributable to higher~~certain commodity ~~labor, inbound and outbound shipping~~ costs, ~~including the impact of fuel surcharges, as well as the write-off of dated perishable product, partially offset by the improvements in the second and third quarter, as noted above.~~

The Company has and will continue to implement strategies designed to mitigate the impact of the various headwinds noted above, including pricing initiatives across our product assortment, advancements in our logistics optimization programs to mitigate rising third-party shippingreduced labor costs, and deploying automation to increase throughput and efficiency and address high cost of labor. Ocean freight costs have come down significantly from their highs of last year, and over time, we expect commodity costs will revert to more historical norms.better inventory management.

Consumer Floral & Gifts segment - Gross profit decreased by ~~8.8%~~2.8% and 5.0% during the three and six months ended ~~April 2,~~December 31, 2023, respectively, due to the impact of the lower revenues noted above, partially offset by favorable gross profit percentage attributable to ~~strategic pricing initiatives~~lower freight costs and ~~product mix, reflected in the higher average order value, as well as lower inbound ocean freight rates.~~

Gross profit decreased by 13.3% during the nine months ending April 2, 2023, due to the impact of the lower revenues noted above, as well as a decrease in gross profit percentage, driven by higher ocean freight (carried on earlier inventory buys), as well as higher outbound freight, andreduced labor ~~rates, partially offset by pricing initiatives which are reflected in the higher average order value noted above.~~costs.

BloomNet segment - Gross profit ~~increased~~decreased by ~~5.5%~~6.5% and 3.2% during the three and six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same ~~period~~periods of the prior year, due to ~~an improved gross profit percentage, partially offset by the~~ decrease in revenues noted ~~above.~~above, partially offset by improved gross profit percentage. Gross profit percentage increased in comparison to the prior year primarily due to ~~improvements in wholesale margins, as a result of strategic pricing initiatives~~lower freight costs and ~~lower ocean freight~~

Gross profit decreased 4.8% during the nine months ended April 2, 2023, compared to the same period of the prior year, due to the lower revenues noted above, as well as the impact of a lower gross margin percentage, due to sales mix, with a greater proportion of revenues derived from lower margin wholesale product ~~sales, and higher rebates.~~mix.

Gourmet Foods & Gift Baskets segment -– Gross profit decreased by ~~14.1%~~3.4% and ~~1.9%, respectively,~~0.9% during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same periods of the prior year ~~primarily~~ due to the revenue decrease noted above, ~~combined with~~partially offset by improved gross profit percentage. The increased gross profit percentage was attributable to lower freight costs, a decline in ~~gross profit percentage primarily attributable to increased promotions to incentivize customer demand~~certain commodity prices, reduced labor costs, and ~~to work down long~~better inventory ~~positions, combined with continued inflationary pressures on component costs, partially offset by lower ocean freight, automation efficiencies, and pricing initiatives.~~management.

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 expense decreased ~~18.5%~~3.0% and ~~9.9%~~4.4% during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same ~~period~~periods of the prior year, due to variable components associated with lower revenues, combined with ~~reduced, but more efficient~~planned reductions in advertising spend ~~and expense optimization efforts.~~focused on driving profitable volume during a period when discretionary purchases are under pressure.

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 ~~increased~~decreased by ~~2.6% and 7.6%~~0.9% during the three ~~and nine~~ months ended ~~April 2,~~December 31, 2023, ~~respectively,~~ compared to the same ~~periods~~period of the prior year, primarily due to reduced labor and consulting costs. Technology and development expense increased 1.5% during the six months ended December 31, 2023 compared to the same period of the prior year, primarily due to higher maintenance and support costs for the Company’s technology platform enhancements, ~~including higher~~partially offset by reduced labor and consulting ~~costs, partially offset by lower performance-based compensation in the current year.~~costs.

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 14.9%,~~decreased 6.1% during the three months ended ~~April 2,~~December 31, 2023, compared to the same period of the prior year, primarily due to lower labor and insurance costs and bad debt expense, offset in part by changes in the value of the Company’s NQDC plan investments (offset in Other Income below). General and administrative expenses increased 0.9% during the six months ended December 31, 2023 compared to the same period of the prior year, due to increases in labor costs driven by changes in the value of the Company’s NQDC plan investments (offset in Other Income below), partially offset by favorable bad debt expense and lower insurance and professional fees.

Depreciation and amortization expense decreased 1.1% during the three months ended December 31, 2023, compared to the same period of the prior year, due to the ~~impact~~timing of ~~increases in health care claim costs, and change in the value of non-qualified deferred compensation plan investments (see equal~~certain assets becoming fully depreciated, offset in ~~“other income/~~part by distribution facility automation projects and IT related ecommerce/platform enhancements. Depreciation and amortization expense ~~net”), partially offset by lower performance-based compensation.~~

~~General and administrative expenses~~ increased ~~3.3%~~1.2% during the ~~nine~~six months ended ~~April 2,~~December 31, 2023 compared to the same period of the prior year, due to an increase in bad debt expense, legal fees, and health care costs, partially offset by lower labor costs resulting from a change in the value of non-qualified deferred compensation plan investments (see equal offset in “other income/expense, net”), and lower performance-based compensation.

~~Depreciation and amortization expense increased 4.5% and 11.1% during the three and nine months ended April 2, 2023, respectively, compared to the same periods~~ of the prior year, due to distribution facility automation projects and IT related ecommerce/platform ~~enhancements, as well as incremental amortization associated with recent acquisitions.~~enhancements.

~~Based upon~~During the ~~continuing pressures on consumer discretionary spending, ongoing geopolitical events,~~three and six months ended December 31, 2023, the ~~current inflationary macro-economic conditions,~~Company recorded a non-cash impairment charge of $19.8 million related ~~cost input headwinds that have negatively impacted the Company’s gross margins, and resulting downward revisions~~ to its ~~forecast,~~PersonalizationMall trademark, due to a decline in the ~~Company concluded that~~actual and projected revenue, combined with a ~~triggering event had occurred for its Gourmet Foods & Gift Baskets reporting unit during~~higher discount rate resulting from the quarter ended April 2, 2023. As such, the Company performed an impairment test of the reporting unit’s goodwill, intangibles and long-lived assets as of April 2, 2023, and fully impaired the related goodwill, and partially impaired certain tradenames within the reporting unit.higher interest rate environment. See Note 65 – Goodwill and ~~Intangibles, net, in Item I~~Intangible Assets, Net for ~~details.~~further information.

Interest expense, net consists primarily of interest expense and amortization of deferred financing costs attributable to the Company’s credit facility (See Note 87 - Debt, in Item 1. for details), net of income earned on the Company’s available cash balances.

Interest expense, net increased ~~39.6%~~11.3% and ~~93.8%~~16.2% during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to the same periods of the prior year, primarily due to higher interest rates, ~~and higher working capital borrowings during the nine month period,~~ partially offset by favorable interest earned on available cash balances.

Other expense ~~(income)~~ consists primarily of investment ~~losses/~~losses (gains) on the Company’s NQDC Plan ~~assets.~~ Investments.

The Company recorded income tax ~~benefit~~expense of ~~$16.8~~$26.5 million and ~~income tax expense of $0.1~~$16.2 million during the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, respectively, compared to an income tax ~~benefit~~expense of ~~$8.1~~$28.3 million and ~~income tax expense of $11.9~~$16.9 million, during the three and ~~nine~~six months ended ~~March 27, 2022,~~January 1, 2023, respectively. The Company’s effective tax rate for the three and ~~nine~~six months ended ~~April 2,~~December 31, 2023, was ~~19.1%~~29.6% and ~~-0.6%~~33.8%, respectively, compared to ~~25.7%~~25.5% and ~~18.6%~~25.7% in the same periods of the prior year. The Company’s effective tax rate for ~~the three~~fiscal 2023 and nine months ended April 2, 2023 differed from the U.S. federal statutory rate of 21.0% primarily as a result of the non-deductible portions of the goodwill impairment charge as well as state income taxes, non-deductible executive compensation, and tax shortfalls related to stock-based compensation, partially offset by various tax credits. The effective tax rate for the three months ended March 27, 2022 differed from the U.S. federal statutory rate of 21% primarily due to state income taxes and nondeductible expenses for executive compensation, partially offset by various tax credits, whereas, the effective tax rate for the nine months ended March 27, 20222024 differed from the U.S. federal statutory rate of 21.0% primarily due to ~~excess tax benefits from stock based~~state income taxes and non-deductible executive compensation, partially offset by ~~state~~tax credits and other items. Fiscal 2024, was further impacted by the impairment charge, which reduced the amount of income ~~taxes.~~reflected in the Company’s estimated annual effective tax rate.

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~~credit agreement (see Note 87 - Debt in Item 1 for details). At ~~April 2,~~December 31, 2023, the Company had working capital of ~~$114.4~~$202.5 million, including cash and cash equivalents of ~~$51.6~~$312.0 million, compared to working capital of ~~$82.5~~$152.9 million, including cash and cash equivalents of ~~$31.5~~$126.8 million, at July ~~3, 2022.~~2, 2023.

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, ~~and Mother’s Day,~~ revenues also have historically risen during the Company’s fiscal third and fourth quarters in comparison to its fiscal first quarter.

During the first two quarters of fiscal ~~2023,~~2024, the Company borrowed under its revolving credit agreement in order to fund pre-holiday manufacturing and inventory procurement requirements, with borrowings peaking at ~~$195.9~~$82.0 million in November ~~2022.~~2023. Cash generated from operations during the Christmas holiday shopping season enabled the Company to repay the borrowings under the Revolver in December ~~2022.~~2023. Based on current projected cash flows, the Company believes that available cash balances will be sufficient to provide for the Company’s operating needs through the remainder of fiscal ~~2023,~~2024, at which time the Company would again expect to borrow against its Revolver to fund pre-holiday manufacturing and inventory purchases. The Company had no amounts outstanding under its Revolver as of ~~April 2,~~December 31, 2023.

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. ~~The Company is in the process of refinancing its Credit Agreement, which matures in May 2024.~~

Net cash provided by operating activities of ~~$73.1~~$212.8 million, for the ~~nine~~six months ended ~~April 2,~~December 31, 2023, was primarily attributable to the Company’s net ~~loss~~income during the period, adjusted by non-cash charges ~~for goodwill and~~related to the intangible ~~asset~~ impairment, depreciation and amortization, ~~bad debt expense and~~ stock-based compensation ~~partially offset by uses of cash for~~and changes in deferred income taxes, combined with seasonal changes in net working capital, ~~purposes, comprised of decreases~~including increases in accounts payable and ~~increases in~~accrued expenses and trade receivables ~~offset by decreases~~and a decrease in ~~inventory.~~inventories.

Net cash used in investing activities of ~~$36.4~~$17.8 million, for the ~~nine~~six months ended ~~April 2,~~December 31, 2023, was attributable to capital expenditures primarily related to the Company's technology and automation ~~initiatives and the acquisition of Things Remembered.~~initiatives.

Net cash used in financing activities of ~~$16.6~~$9.7 million, for the ~~nine~~six months ended ~~April 2,~~December 31, 2023, related primarily to ~~repayments~~net repayment of bank borrowings under the Company’s ~~term loan,~~working capital line of credit and ~~acquisition~~the repurchase of ~~treasury~~common stock.

At ~~April 2,~~December 31, 2023, the Company’s contractual obligations consist of:

As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended July ~~3, 2022,~~2, 2023, 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, other intangible assets and income taxes. There have been no significant changes to the assumptions and estimates related to the Company’s critical accounting policies since July ~~3, 2022, except as noted below:~~

During the quarter ended April 2, 2023, the Company evaluated whether events or circumstances had changed such that it would indicate it was more likely than not that its goodwill, intangible and other long-lived assets of the Gourmet Foods & Gift Baskets reporting units fair values were less than their carrying amounts. After considering the continuing pressures on consumer discretionary spending, ongoing geopolitical events, the current inflationary macro-economic conditions, related cost input headwinds that have negatively impacted the Company’s gross margins, and resulting downward revisions to its forecast, the Company concluded that a triggering event had occurred for its Gourmet Foods & Gift Baskets reporting unit. As such, the Company performed an impairment test of the reporting unit’s goodwill, intangibles and long-lived assets as of April 2, 2023.

The Company performed its goodwill impairment test by comparing the fair value of its Gourmet Foods & Gift Baskets reporting unit to its respective carrying value. The Company estimated the fair value of the Gourmet Foods & Gift Baskets reporting unit using an equal weighting of the income and market approaches, and a discount rate of 13%. 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 which required management to make significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, 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.

Based on the impairment assessment performed for the period ending April 2, 2023, the Company recorded a goodwill and intangible impairment charge against its Gourmet Foods & Gift Baskets reporting unit of $64.6 million, comprised of $62.3 million which was attributable to goodwill and $2.3 million which was attributable to certain tradenames within the same reporting unit. The Company concluded that the definite-lived and other long-lived assets of the reporting unit were not impaired.

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.

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 beliefs concerning future events and can generally be identified by the use of statements that include words such as “estimate,” “expects,” “project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,” “forecast,” “likely,” “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:

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 July ~~3, 2022~~2, 2023 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.

The Company’s exposure to market risk for changes in interest rates relates primarily to the Company’s investment of available cash balances and its long-term debt. The Company generally invests its cash and cash equivalents in investment grade corporate and U.S. government securities. Borrowings under the Company’s credit facility bear interest at a variable rate, plus an applicable margin, and therefore expose the Company to market risk for changes in interest rates. The effect of a 50 basis point increase in current interest rates on the Company’s interest expense would be approximately ~~$0.2~~$0.3 and ~~$0.9~~$0.6 million during the three and ~~nine~~six months ended ~~April 2, 2023.~~December 31, 2023, respectively.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of ~~April 2,~~December 31, 2023. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have each concluded that the Company’s disclosure controls and procedures were ~~not~~ effective as of April 2, 2023, due to a material weakness in internal control over financial reporting related to logical access and segregation of duties, at the application control level, in certain information technology environments. The material weakness was first identified and reported in Management's Report on Internal Control over Financial Reporting in our Annual Report on Form 10-K for the period ending July 3, 2022.

Management has taken steps to remediate these deficiencies, including redesigning the logical access and placing enhanced segregation of duties, enhancing its internal documentation and monitoring approach to ensure that all procedures designed to restrict access to applications and data are operating in an optimal manner in order to provide management with comfort that access is properly limited to the appropriate internal personnel. Management began to implement these remedial steps during the first quarter of fiscalDecember 31, 2023. In accordance with our internal control compliance program, a material weakness is not considered remediated until the remediation processes have been operational for a sufficient period of time and successfully tested. In light of this material weakness, management performed additional procedures over our IT environment and personnel affected to determine if any unauthorized action had been taken and found no such instances.

Notwithstanding the material weakness described in Management's Report on logical access and segregation of duties in certain technology environments, our management has concluded that our consolidated financial statements for the periods covered by this form 10-Q are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and fairly present, in all material respects, our financial position, results of operations and cash flows for each of the periods presented herein.

~~Except for the remedial actions described above, there~~There were no changes in our internal control over financial reporting identified in connection with the Company’s evaluation required by Rules 13a-15(d) or 15d-15(d) of the Securities Exchange Act of 1934 during the quarter ended ~~April 2,~~December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, as specified above. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.

In March of 2018, a putative class action lawsuit was filed against a subsidiary of the Company (the “Subsidiary”) in the U.S. District Court for the District of Oregon, Medford Division (the “Court”), alleging violations of the federal Fair Labor Standards Act (FLSA) and Oregon state law. The complaint was brought on behalf of a putative class of call center workers and alleged that certain Subsidiary policies and practices resulted in class members’ performance of unpaid work. The plaintiff sought class certification, compensation for alleged unpaid and underpaid wages, civil penalties, prejudgment interest, liquidated damages, litigation costs, and attorneys’ fees. Following mediation, the parties reached an agreement in April 2022 to resolve all claims. In September 2022, the Court granted final approval of the settlement agreement, and in November 2022, the Company remitted payment of approximately $2.9 million, which was previously accrued during the quarter ended March 27, 2022, and was included in "Accrued expenses" in the consolidated balance sheets at July 3, 2022. In entering into the settlement agreement, the Subsidiary made no admission of liability.

~~In addition, there~~There are various claims, lawsuits, and pending actions against the Company and its subsidiaries incident to the operations of its businesses. It is the opinion of management, after consultation with counsel, that the final resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

The Company has a stock repurchase plan through which purchases can be made from time to time in the open market and through privately negotiated transactions, subject to general market conditions. The repurchase program is financed utilizing available cash. On April 22, 2021, the Company’s Board of Directors authorized an increase to its stock repurchase plan of up to $40.0 million. In addition, on February 3, 2022, the Company’s Board of Directors authorized an increase to its stock repurchase plan of up to $40.0 million. As of ~~April 2,~~December 31, 2023, ~~$32.0~~$27.2 million remained authorized under the plan.

The following table sets forth, for the months indicated, the Company’s purchase of common stock during the first ~~nine~~six months of fiscal ~~2023,~~2024, which includes the period July ~~4, 2022~~3, 2023 through ~~April 2,~~December 31, 2023:

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Page
Part I.	Financial Information
Item 1.	Condensed Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets – ~~April 2,~~December 31, 2023 (Unaudited) and July ~~3, 2022~~2, 2023	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) – Three and ~~Nine~~Six Months Ended ~~April 2,~~December 31, 2023 and ~~March 27, 2022~~January 1, 2023	2
	Condensed Consolidated Statements of Stockholders' Equity (Unaudited) – Three and ~~Nine~~Six Months Ended ~~April 2,~~December 31, 2023 and ~~March 27, 2022~~January 1, 2023	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) – ~~Nine~~Six Months Ended ~~April 2,~~December 31, 2023 and ~~March 27, 2022~~January 1, 2023	45
	Notes to Condensed Consolidated Financial Statements (Unaudited)	56
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2119
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3935
Item 4.	Controls and Procedures	3935

Part II.	Other Information	36
Item 1.	Legal Proceedings	4036
Item 1A.	Risk Factors	4036
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4137
Item 3.	Defaults upon Senior Securities	4137
Item 4.	Mine Safety Disclosures	4137
Item 5.	Other Information	4137
Item 6.	Exhibits	4138

Signatures		42

●	E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due prior to the date of shipment.
●	Retail revenues - consumer products sold through our retail stores. Revenue is recognized when control of the goods is transferred to the customer, at the point of sale, at which time payment is received.
●	Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer.
●	BloomNet Services - membership fees as well as other service offerings to florists. Membership and other subscription-based fees are recognized monthly as earned. Services revenues related to orders sent through the floral network are variable, based on either the number of orders or the value of orders, and are recognized in the period in which the orders are delivered. The contracts within BloomNet Services are typically month-to-month and, as a result, no consideration allocation is necessary across multiple reporting periods. Payment is typically due less than 30 days from the date the services were performed.

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding at July 3, 2022		-		$	-
Granted		2,346,416		$	8.59
Exercised		-		$	-
Forfeited		(42,412	)		8.59
Outstanding at April 2, 2023		2,304,004		$	8.59		9.6	$	6,705

Exercisable at April 2, 2023		-		$	-		-	$	-

	Shares			Weighted Average Grant Date Fair Value
Non-vested at July 3, 2022		929,709		$	21.82
Granted		735,754		$	8.44
Vested		(372,415	)	$	17.66
Forfeited		(51,638	)	$	19.56
Non-vested at April 2, 2023		1,241,410		$	15.23

	Vital Choice Preliminary Purchase Price Allocation		Measurement Period Interim Adjustments			Vital Choice Purchase Price Allocation
	October 27,					January 1,
	2021					2023
	(in thousands)

Inventory	$	8,653	$	-		$	8,653
Other current assets		929		(474	)		455
Property, plant and equipment		205		(205	)		-
Intangible assets		9,800		(600	)		9,200
Goodwill		4,383		634			5,017
Total assets acquired		23,970		(645	)		23,325

Current liabilities		3,621		(256	)		3,365
Net assets acquired	$	20,349	$	(389	)	$	19,960

	Nine Months Ended April 2, 2023 and March 27, 2022
																Accumulated
	Common Stock										Additional					Other								Total
	Class A				Class B						Paid-in		Retained			Comprehensive			Treasury Stock					Stockholders’
	Shares		Amount		Shares			Amount			Capital		Earnings			Loss			Shares		Amount			Equity

Balance at July 3, 2022		57,706,389	$	577		32,529,614		$	325		$	379,885	$	315,785		$	(211	)		25,698,396	$	(186,952	)	$	509,409
Net loss		-		-		-			-			-		(22,155	)		-			-		-			(22,155	)
Stock-based compensation		372,415		4		-			-			5,937		-			-			-		-			5,941
Conversion – Class B into Class A		181,393		2		(181,393	)		(2	)		-		-			-			-		-			-
Acquisition of Class A treasury stock		-		-		-			-			-		-			-			142,005		(1,197	)		(1,197	)
Balance at April 2, 2023		58,260,197	$	583		32,348,221		$	323		$	385,822	$	293,630		$	(211	)		25,840,401	$	(188,149	)	$	491,998

Balance at June 27, 2021		55,675,661	$	557		33,433,614		$	334		$	371,103	$	286,175		$	(318	)		24,105,841	$	(148,781	)	$	509,070
Net income		-		-		-			-			-		51,860			-			-		-			51,860
Stock-based compensation		800,387		8		-			-			6,795		-			-			-		-			6,803
Exercise of stock options		321,700		3		-			-			843		-			-			-		-			846
Conversion – Class B into Class A		889,860		9		(889,860	)		(9	)		-		-			-			-		-			-
Acquisition of Class A treasury stock		-		-		-			-			-		-			-			1,330,090		(34,788	)		(34,788	)
Balance at March 27, 2022		57,687,608	$	577		32,543,754		$	325		$	378,741	$	338,035		$	(318	)		25,435,931	$	(183,569	)	$	533,791

	Three Months Ended						Nine Months Ended
	April 2, 2023			March 27, 2022			April 2, 2023			March 27, 2022
	(in thousands, except per share data)
Numerator:
Net income (loss)	$	(70,993	)	$	(23,409	)	$	(22,155	)	$	51,860

Denominator:
Weighted average shares outstanding		64,767			65,028			64,660			65,086
Effect of dilutive securities:
Employee stock options		-			-			-			63
Employee restricted stock awards		-			-			-			700
		-			-			-			763

Adjusted weighted-average shares and assumed conversions		64,767			65,028			64,660			65,849

Net income (loss) per common share
Basic	$	(1.10	)	$	(0.36	)	$	(0.34	)	$	0.80
Diluted	$	(1.10	)	$	(0.36	)	$	(0.34	)	$	0.79

	Consumer Floral & Gifts		BloomNet		Gourmet Foods & Gift Baskets			Total
	(in thousands)
Balance at July 3, 2022	$	151,600	$	-	$	61,687		$	213,287
Measurement period adjustment for Vital Choice Acquisition		-		-		600			600
Measurement period adjustment for Alice's Table Acquisition		112		-		-			112
Acquisition of Things Remembered		1,664		-		-			1,664
Goodwill impairment		-		-		(62,287	)		(62,287	)
Balance at April 2, 2023	$	153,376	$	-	$	-		$	153,376

	Consumer Floral & Gifts		BloomNet		Gourmet Foods & Gift Baskets		Total
	(in thousands)
Balance at July 2, 2023	$	153,376	$	-	$	-	$	153,376
Measurement period adjustment for Things Remembered Acquisition		201		-		-		201
Balance at December 31, 2023	$	153,577	$	-	$	-	$	153,577

Level 1	Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2	Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3	Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

	Carrying Value		Fair Value Measurements Assets (Liabilities)						Carrying Value		Fair Value Measurements Assets (Liabilities)
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
	(in thousands)								(in thousands)
As of April 2, 2023:
As of December 31, 2023:
Trading securities held in a “rabbi trust” (1)	$	20,553	$	20,553	$	-	$	-	$	27,183	$	27,183	$	-	$	-
Total assets (liabilities) at fair value	$	20,553	$	20,553	$	-	$	-	$	27,183	$	27,183	$	-	$	-

As of July 3, 2022:
As of July 2, 2023:
Trading securities held in a “rabbi trust” (1)	$	17,760	$	17,760	$	-	$	-	$	22,617	$	22,617	$	-	$	-
Total assets (liabilities) at fair value	$	17,760	$	17,760	$	-	$	-	$	22,617	$	22,617	$	-	$	-

	~~April 2,~~ December 31, 2023
	(in thousands)
Weighted-average remaining lease term - operating leases (in years)		~~8.9~~8.4
Weighted-discount rate - operating leases		~~4.0~~4.1	%

Remainder of 2023	$	3,782
2024		22,528
2025		20,273
2026		18,343
2027		16,718
Thereafter		82,881
Total Future Minimum Lease Payments		164,525
Less: Imputed Remaining Interest		27,440
Total Operating Lease Liabilities		137,085
Less: Current portion of long-term operating lease liabilities		15,517
Long-term operating lease liabilities	$	121,568

Fiscal Year:
Remainder of 2024	$	9,507
2025		20,644
2026		18,714
2027		17,095
2028		16,179
Thereafter		68,402
Total Future Minimum Lease Payments		150,541
Less: Imputed Remaining Interest		24,368
Total Operating Lease Liabilities		126,173
Less: Current portion of long-term operating lease liabilities		15,433
Long-term operating lease liabilities	$	110,740

Reconciliation of net income (loss) to adjusted net income (loss) (non-GAAP):	Three Months Ended						Nine Months Ended
	April 2, 2023			March 27, 2022			April 2, 2023			March 27, 2022

Net income (loss)	$	(70,993	)	$	(23,409	)	$	(22,155	)	$	51,860
Adjustments to reconcile net income (loss) to adjusted net income (loss) (non-GAAP)
Add: Transaction costs		201			25			444			540
Add: Litigation settlement		-			2,900			-			2,900
Add: Goodwill and Intangibles Impairment		64,586			-			64,586			-
Deduct: Income tax effect on adjustments		(11,546	)		(533	)		(11,609	)		(641	)
Adjusted net income (loss) (non-GAAP)	$	(17,752	)	$	(21,017	)	$	31,266		$	54,659

Basic and diluted net income (loss) per common share
Basic	$	(1.10	)	$	(0.36	)	$	(0.34	)	$	0.80
Diluted	$	(1.10	)	$	(0.36	)	$	(0.34	)	$	0.79


Basic and diluted adjusted net income (loss) per common share (non-GAAP)
Basic	$	(0.27	)	$	(0.32	)	$	0.48		$	0.84
Diluted	$	(0.27	)	$	(0.32	)	$	0.48		$	0.83

Weighted average shares used in the calculation of basic and diluted net income (loss) and adjusted net income (loss) per common share
Basic		64,767			65,028			64,660			65,086
Diluted		64,767			65,028			64,660			65,849

				April 2, 2023						July 3, 2022									December 31, 2023						July 2, 2023
	Amortization Period			Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net		Amortization Period			Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in years)			(in thousands)												(in years)			(in thousands)
Intangible assets with determinable lives
Investment in licenses	14	-	16	$	7,420	$	6,543	$	877	$	7,420	$	6,464	$	956	14	-	16	$	7,420	$	6,622	$	798	$	7,420	$	6,569	$	851
Customer lists	3	-	6		29,071		20,538		8,533		28,509		17,473		11,036	3	-	10		29,071		23,757		5,314		29,071		21,611		7,460
Other	5	-	14		2,946		2,589		357		2,946		2,543		403	5	-	14		2,946		2,634		312		2,946		2,604		342
Total intangible assets with determinable lives					39,437		29,670		9,767		38,875		26,480		12,395					39,437		33,013		6,424		39,437		30,784		8,653
Trademarks with indefinite lives					131,235		-		131,235		133,173		-		133,173					111,473		-		111,473		131,235		-		131,235
Total identifiable intangible assets				$	170,672	$	29,670	$	141,002	$	172,048	$	26,480	$	145,568				$	150,910	$	33,013	$	117,897	$	170,672	$	30,784	$	139,888

	April 2, 2023			July 3, 2022			December 31, 2023			July 2, 2023
	(in thousands)						(in thousands)
Land	$	33,866		$	33,862		$	33,866		$	33,866
Orchards in production and land improvements		20,134			19,773			20,604			20,401
Building and building improvements		66,727			65,909			68,510			67,647
Leasehold improvements		29,317			26,266			30,882			29,524
Production equipment		123,539			106,244			130,043			125,297
Furniture and fixtures		8,980			8,985			9,235			9,102
Computer and telecommunication equipment		40,900			38,934			43,041			41,859
Software		185,815			165,289			193,925			181,085
Capital projects in progress		2,178			14,525			14,644			18,205
Property, plant and equipment, gross		511,456			479,787			544,750			526,986
Accumulated depreciation and amortization		(279,980	)		(243,306	)		(317,107	)		(292,417	)
Property, plant and equipment, net	$	231,476		$	236,481		$	227,643		$	234,569

Reconciliation of net income to adjusted net income (non-GAAP):	Three Months Ended					Six Months Ended
	December 31, 2023		January 1, 2023			December 31, 2023		January 1, 2023

Net income	$	62,907	$	82,530		$	31,665	$	48,838
Adjustments to reconcile net income to adjusted net income (non-GAAP)
Add: Transaction costs		-		243			-		243
Add: Intangibles impairment		19,762		-			19,762		-
Deduct: Income tax effect on adjustments		-		(63	)		-		(63	)
Adjusted net income (non-GAAP)	$	82,669	$	82,710		$	51,427	$	49,018

Basic and diluted net income per common share
Basic	$	0.97	$	1.28		$	0.49	$	0.76
Diluted	$	0.97	$	1.27		$	0.49	$	0.75


Basic and diluted adjusted net income per common share (non-GAAP)
Basic	$	1.28	$	1.28		$	0.79	$	0.76
Diluted	$	1.27	$	1.28		$	0.79	$	0.76

Weighted average shares used in the calculation of basic and diluted net income and adjusted net income per common share
Basic		64,835		64,675			64,814		64,606
Diluted		65,177		64,835			65,155		64,820

●	Long-term debt obligations - payments due under the Company's ~~Credit Agreement~~credit agreement (see Note 87 - Debt in Item 1 for details and payments due by period).
●	Operating lease obligations – payments due under the Company’s operating leases (see Note 1312 - Leases in Item 1 for details and payments due by period for the long-term operating leases).
●	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 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter		Total
Purchase commitments	$	60,888	$	34,967	$	10,279	$	2,124	$	168	$	-	$	108,426

	Payments due by period
	(in thousands)
	Remaining Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Fiscal 2028		Thereafter		Total
Purchase commitments	$	73,067	$	15,773	$	3,749	$	775	$	-	$	-	$	93,364

	o	to achieve revenue and profitability;
	o	to leverage its operating platform and reduce operating expenses;
	o	to manage the seasonality of its business;
	o	to cost effectively acquire and retain customers;
	o	to successfully integrate acquired businesses and assets;
	o	to reduce working capital requirements and capital expenditures;
	o	to mitigate the impact of supply chain cost and capacity constraints;
	o	to compete against existing and new competitors;
	o	to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; and
	o	to address the effects of changes in accounting policies, practices, or assumptions, including changes that could potentially require future impairment charges;

●	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 and labor.

Period	Total Number of Shares Purchased		Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
	(in thousands, except average price paid per share)

07/04/22 - 07/31/22		-	$	-		-	$	33,203
08/01/22 - 08/28/22		-	$	-		-	$	33,203
08/29/22 - 10/02/22		-	$	-		-	$	33,203
10/03/22 - 10/30/22		-	$	-		-	$	33,203
10/31/22 - 11/27/22		140,248	$	8.38		140,248	$	32,029
11/28/22 - 01/01/23		-	$	-		-	$	32,029
01/02/23 - 01/29/23		-	$	-		-	$	32,029
01/30/23 - 02/26/23		1,757	$	12.34		1,757	$	32,007
02/27/23 - 04/02/23		-	$	-		-	$	32,007
Total		142,005	$	8.42		142,005

Period	Total Number of Shares Purchased		Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
	(in thousands, except average price paid per share)

07/03/23 – 07/30/23		-	$	-		-	$	31,965
07/31/23 – 08/27/23		-	$	-		-	$	31,965
08/28/23 – 10/01/23		10,483	$	7.08		10,483	$	31,890
10/02/23 – 10/29/23		-	$	-		-	$	31,890
10/30/23 – 11/26/23		272,978	$	8.56		272,978	$	29,549
11/27/23 – 12/31/23		240,000	$	9.85		240,000	$	27,178
Total		523,461	$	9.12		523,461

10.1	Consulting Agreement, dated as of December 20, 2023, between 1-800-FLOWERS.COM, Inc., and Hanft Ideas LLC and Adam Hanft. * ^
10.2	Appointment Letter from 1-800-FLOWERS.COM, Inc. to Christopher G. McCann, dated December 31, 2023 (incorporated by reference to Current Report on Form 8-K filed on January 2, 2024, Exhibit 99.1). ^
31.1		Certification of the principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
31.2		Certification of the principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
32.1		Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Document
101.PRE		Inline XBRL Taxonomy Definition Presentation Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	1-800-FLOWERS.COM, Inc. (Registrant)
Date: ~~May 12, 2023~~February 8, 2024	/s/ ~~Christopher G.~~James F. McCann ~~Christopher G.~~James F. McCann Executive Chairman and Chief Executive Officer and Director (Principal Executive Officer)

Date: ~~May 12, 2023~~February 8, 2024	/s/ William E. Shea William E. Shea Senior Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)