FLWS - Earnings call transcript Q2 2019

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Operator

Good day, and welcome to the 1-800 FLOWERS.COM Fiscal 2019 Second Quarter Results Conference Call. Today's conference is being recorded. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Joseph Pititto, Senior Vice President, Investor Relations and Corporate Communications. sir. ahead, go Please

Joseph Pititto

Good to thank results discuss second fiscal Caroline. joining for all us XXXX today X-XXX quarter. morning you, you and for our Thank FLOWERS.COM'S financial

you earlier this at the the of For Investor yet at be XXXXflowersinc.com. morning, have our Relations press issued our section release received of those release copy who accessed of the can not site Web

will then today your we with remarks Chris today will questions. the begin brief Our will and and call CEO; to open call Presenting CFO. Bill be McCann, formal Shea,

and some in we the may results actual need Before the meaning Litigation statements implied I to materially uncertainties begin, differ within to risks of forward-looking we remind of those applicable today that everyone make could Act expressed that Private or Securities These Reform of cause will the statements. from the statements XXXX. be involve

please issued our For and XX-K risks a our uncertainties, on XX-Q. report reports including well and as to description as Form quarterly release on of detailed SEC company's annual morning, Form refer press the filings, these this

we stated any company. disclaims issued today's to as morning, comparable update measures this Principles. any accordance accompanying tables to can release by otherwise obligation company its release of or financial found any press Accounting issued forward-looking or the The recordings any certain financial filings Generally call, in of intent discuss of not statements today the except directly the prepared addition, In morning. made expressly in today's maybe measures this earlier SEC press that of call, with non-GAAP these the in Reconciliations the Accepted supplemental most measures were will be GAAP the company's

McCann date, calendars in over and the the in to remarks, morning March Friday, Before to call hope we be back days our details there. invitations their ask that to to of hosting we York to I formal Chris. on We'll turn XXnd. all for everyone ahead, see to will mark the agenda out City. the with an being turn call like On investor send I'd you and New day location now I'll Chris

Chris McCann

Good all you us. Thank morning, for everyone. joining

As noted of of increases very and to we EPS we adjusted the revenue for EBITDA trends growth, this pleased solid accelerated report fiscal this the release with fiscal are press morning, year. along 'XX positive in are in quarter. results second of second-half first our we continuation a our year-over-year quarter saw in and The our fiscal

strong and combined celebrate who For More providing well customers for the in Gourmet and on for to segments. the brand of quarter, focus reflecting original Share & everyday holiday Gift & David, across behind its X%, Foods express, as products. the connect, as demand occasions Baskets David's looking overall truly Gift Harry well growth for driver was largest X.X% the Harry brand with the were segment, primary everyday excellent Gourmet gifting & & all segment. to total three In segments, execution responded messaging, revenues Basket our season nearly grew business our Food holiday and our

period, further from also growth Jacques returns Harry for quarter Cheryl's holiday and customer benefited existing the with Floral our marketing Chuao for increased digital to of new several companywide in the position year Popcorn & Torres, demand In in growth wholesale revenue Consumer Chocolatier our In floral our season, we from brands Ethel strong in Cookies, compared Kohler, David, excellent segment our making contributed Factory's business, extending are offerings X-XXX-Baskets we The strong new performance growth market [ph], the addition, had XX%. X% on revenue we in in new customers. also channels, investments nearly launched during strong you Simply the operating segment, increased Chocolate, told growing programs in which currently, And the enhanced saw which for we at the leadership M. growth prior growth gifting. including

on Here, on which told introduce program Back demand investments initiative the seeing in excellent returns strong increased also customer of are in products X-XXX-Flowers collection, of with about. new variety philanthropic Beauty of experience delivering and Christina stimulating our truly and available the revenue from brand Give experience the such our none, opportunities achieved customers, brand our also and That double-digit strength programs, that's by Succulent. Smile making shapes, the generate our in X-XXX-Flowers enterprise-wide The X-XXX-Flowers we new are new are our helped excited marketing disabilities, exclusive second Noelle and customer a arrangements Succulent Tree Wild The customers. new Garden, leveraging helped while hit including we a selling marketing industry-leading meaningful part top growth focused on again, is were collection, our for digital a we the brand our existing that creating as to from Gifts and developmental Farms in very gains focusing employment increased individuals Christmas you original

have volume also strong rest, helping sales, management with increases in during for going capturing market a BloomNet continue penetration digital year made volumes in to digital through forward. to service wire The system. This technology growth business the deliver prior achieved space is advertising. point-of-sale the BloomNet share and positioned revenues system growth systems, including period. marketing This program, order BloomNet is the increase to strong quarter, its in is directory with reflects and store compared also investments going order drive growth BloomNet up Our XX% the we significant

and had saw up, solid growth, customer accelerated investments and We order growth strong gains EPS, in second increasing nearly accelerated sum & adjusted David, So, are and Consolidated X-XXX-Flowers terms good to volumes. of revenue BloomNet very X%. we posted and growth, we strong a the quarter. on to EBITDA results in Harry in making new revenue we

to second-half of into we year, are across As are the trends positive our we well-positioned seeing we head the business. fiscal continue our

As the detailed Bill turn call year. we for for top review Bill? a and of metrics to a more line are the growth and key our our I'll over result, now guidance. increasing guidance bottom revised our full for

Bill Shea

Chris. difficulty]. bottom [technical you, and results we noted, pleased Baskets growth a strong while the customer BloomNet. significant of X.X% and for order difficulty] Revenue Floral expectations holiday [technical are including in for very ahead line our occasions growth top with segments Chris volume both gifting strong Thank Consumer was Gift demand and everyday of

with expense which and period. was compared per was including $X.XX second to revenues resulted included Tax fiscal strategic year basis use $X.XX ability growth $XX.X logistical million in The Gross price the provided in increases having margin assumption Goodsey. in customer marketing could and and year. XX.X% total launch the X.X%, decrease in X%, the growth associated both the bonus in in of year EBITDA for year's enabled core in the cost. increase in EPS increased in line service functions, EPS when for which we of XXXX. Breaking of this Flowers had million the our offset order our EPS passport reduce XX.X%. year-over-year well diluted quarter Jobs $XX.X centers with reflects enhanced of of improved of our year in and benefit, XX past BloomNet year-over-year discussed bonuses Gift significantly a despite leveraging ratio points the income quarter tax cost Tax period. facilities we on of marketing. metrics drove impact in the season payout Baskets, to lower strong quarter earlier to of share reduced X.X% for some in key with benefited quarter prior quarter points The strong These investments diluted EPS we the cost fiscal in other of the impact and marketing the year-over-year increases. share increased strong of of XXXX, payout growth our continuing shifting of year became and rising program prior of respectively was growth in with EPS across the last our XXXX, Consumer achieved brands our Adjusted platform. and a and year primarily margin manufacturing for with of the Turning XX.X% as revenue bottom three initiatives the results, period. X-XXX share automation revenue XX.X% period. to and growth manufacturing compared operating and EPS which adjusted strong and our prior quarter, adjusted Net increased for segments including from net XX.X% Jobs expense several Act cost, and respectively. lower basis the of benefit certain compared and with of diluted down the This ratio increased our $X.XX and the investments of lower Cut implementation better adjusted XX% quarter worth automation which of income compared factors our in with were that with million associated A prior labor, for reflects Harry million service transportation basis associated of our our the compared percent a of net growth XX% $X.XX the production prior business EBITDA to operating a rate Floral our to through year, calls full Cut reflects net adjusted $XXX.X minimal and up expenses XX $XX.X of second per of digital per effective us the improved marketing per the compared in effective programs, Act both seasonal to $XX.X fiscal onetime while as and share for effective also BloomNet. & period as absorb profit the the initiatives, all David decrease the and million our our revenue absorbing of This income largely in in in the Operating have cost solid increases was revenue gross initiatives Combination this noting percentage the with workforce, quarter prior of the an onetime achieved and operating diluted and some leverage income efficiency

effective was Our this period. in in adjusted compared XX.X% second prior year as the year's quarter with XX.X%

our $XX the quarter, represents $XXX million to revenues with in more increased Gourmet results, year million compared than Food Baskets for or and of revenue XX% our period. category Gift to total segment, Turning the which X.X% prior

by to primarily truly gift back growth in driven previously progress Successful also basis for strong for the with from benefited towels launch holiday Baskets, margin popular demand & business segment Cookies, Riviera compared Profit to at Harry period. gourmet up Segment Pears noted, year. gifting improved $XX.X $XXX.X demand strong Harry margin wholesale growth & gross in XX.X%, of iconic increase growth we this was combined including Factory. for issue, in year with last the As & operational revenue David's its margin the and entertainment. period. contribution the in the among season new of exceptional XX.X% good bouncing for younger X-XXX gross baskets consumer Segments prior sentiments profit everyday margin for growth year's customer million Harry were has The This line containing which profit holiday XX compared customers year strong increased occasion, David our this in which strong become channels and which prior Popcorn was performances segment this Royal margin. from made contribution of revenue Cheryl's has David benefited from wholesale for with a improved those increased reflects growth XX.X% million segment in operating growing

basis reduced assumption marketing XX.X% of marketing the the period, aspects margin segment our payout of a compared bonus full margin margin lower program. impact Consumer period. penetration in certain the investments points prior XXXX period. million $X.X the as Lower the compared passport well of contribution payout a period. the for Floral to margin XX compared increased million gross segment, year million decrease in XX.X%, significantly was prior increased prior as in The for Profit contribution Now cost accelerated our with brand a reflects revenues $XX.X Segment $XXX.X million our or $X of in newest with $XXX.X increased was and year growth drive compared with Goodsey. startup investments million the year prior with or was X% the of year

increased quarter for to points service period. of prior gross wire a margin than more margin or percentage They to XX.X%, increased discussed XX% margin resulting $XX.X Lower reflects in $XX.X in XXX the million were the auto Profit BloomNet revenue in decrease in segment. million. by period. with $X.X of growth segment $X.X offset year the compared the year million year million period. to Revenues volumes X.X% strong contribution for prior was prior drive XX.X% profit the This million investments was we a BloomNet. the with basis in compared $X.X quarter Now increase

providing are among company's platform services under associated of other exclude IT, services terms results expense, corporate the and These organization. centralized which legal, functions segment a includes shared with the cost support management finance, entire In platform contribution HR, to margin operated enterprise services executive.

fiscal compared with the in $XX.X corporate based stock million the in high quarter, The year period. second bonus the year including corporate compensation million in compared period. the For with prior expense expense stock $XX.X prior was based increase plus compensation

Turning facility. investment net position within cost debt deferred $XXX.X we in our was line was quarter, million. credit Term balance borrowings of zero end our under And revolving at of $XX.X financing outstanding sheet, the working had our cash our to our capital second balance million.

result, a million Inventory of cash end quarter As was of approximately net at management's in with the was line the million. expectations. $XXX.X total $XX

our based XXXX, the and growth we following Turning raising guidance on guidance earnings year factors. for to fiscal the revenue for for year are

minimal bonus strong prior year top Flowers and of the first to invest X-XXX our in to bottom fiscal Goodsey stated and Our assumption for plan our half the in year, the to growth in to programs invest performance line full the in & for compared and of payout our David brands newest year. continue a and with marketing accelerate brand payout Harry

a An with from the to per As $X.XX consolidated $XX year, million of a a increase $X.XX we result, million. $X.XX an of compared previous from X% are of of a adjusted to to per range of previous increase increase growth a new to in as to X% diluted share $X.XX diluted to $XX raising in X% to share, range a range follows. from previous range revenue to $XX new million in range guidance new X% prior EPS the to EBITDA $XX million an range

flow unchanged remains $XX a to Our million for of at the guidance cash for million free range $XX year.

$XX As fiscal this revenue a our quarter reminder, the Easter Holiday third which in represents fell million compared with 'XX it approximately falls our quarter. year fourth when in in

impact half our Given basis. the combined on we our quarterly year-over-year on viewing second a comparisons, results resulting recommend

turn the I'll to Now Chris. call back

Chris McCann

Bill. Thanks

year. pleased our with half very are our results the fiscal through We first of

marketing drive our our seeing for revenue significant to we to initiatives programs the is the These returns this digital across revenue Importantly, David's a customer investments growth, are revenue strong order going advantage increase we to programs to growth, and on segments helping accelerated are & our all brand, migration digital which accelerate where our conditions market accelerated year. Harry taking we and new of growth to we platform. total platform both include making BloomNet drive three our market through volumes of strong X-XXX-Flowers are are told business getting illustrates you we the

marketing metrics expand to to spend our for service among growth cross-brand are provides in this in solid best and members, loyalty our retention strong drive also helping which multi-brand focus to the to frequency, charges Passport file drive initiatives on addition we're programs of In improvements of Helping value. shipping grow our customers, new seeing in increased customers. merchandizing and behavior customers, all terms customer to free our our lifetime and and program, increased average

well So, continued in quarter, double-digit as customers. strong of the we in the second saw new growth during members growth multi-branded Passport as creation

are strong getting As we year, fiscal returns move investments. we second-half we into on the the build to of plan from our our

and on the last capabilities made continued additional our enhance and also, and in & Valentine's difficulty] the the We've also as TWA And the for to this from Business we of a are Day product we new [ph] can innovations smiles, fulfillment. Chat, These we our falling experience. with for complete brand our X-XXX-Flowers difficulty] on holiday expand integration fiscal tablet using for Magnificent [technical ruby enhanced guidance features shopping with on are enhance Google tablets, leadership Truffles, for an benefit customer's tracking, and cocoa roses ongoing have continually new in truly via Track capabilities capabilities to success conversational and mission tracking space new on Assistant, ordering [technical featuring orders Harry Thursday David, Roses. Ruby the where in the commands are order original capabilities innovating deliver a that our conversion Order difficulty] established [Technical for innovations have bot SmartGift, Samsung Cacao have also to the year, to technology our [technical Google Wednesday difficulty] via are search moving digital our year, new Valentine we unique introducing to creamy store and because experience. 'XX. in of and rates. Valentine confections area significantly bean launched functionality. deliver mobile, on it speeds enables Voice upgraded Apple Building Express, shop compared text Messenger gifting X-XXX-Flowers including My Facebook the the Among position. to providing holiday day marketing part We Samsung Pay. and assistant, a commerce of use real-time the the include already devices has chat search order to smart Bixby. on with ordering place X-XXX-Flowers Samsung's voice optimized This voice-powered These the and from customers several

the begin to call their like turn Q&A I associates Caroline innovative of the our for our hard enterprise their portion call, all commend I'd over of work, Before the to to across their you [Technical dedication might have. to to call and difficulty] call helping Caroline that back and questions for thinking, the open to our express, customers celebrate. turn I'll connect, the any

Operator

you. Thank

We will now question-and-answer the -- begin difficulty] session. [Technical

Bill Shea

-- is in flat-to-up brand, so depending the new hasn't upon slightly influenced slightly, customers that. the up growth

Unidentified Analyst

helpful. really it, Got

So finally seen out with more ask been then off. I'll you're we've on you holiday I we've on like a something that cetera. data on way, segue into alter It's good costs, have this all for odd does last just how kind pressure while, and all freight kind there an trucking, the you this get question, then standalone leeway of Look, bolt particularly I to and period seem of you scale. an might impressive want my waiting getting think scale? something acquisition shipping, give or to that of et would you view guys in not a

Chris McCann

in I view, an look from sheet. the No, we first that a position point as think in off, we're a very strong acquisition that we're at position, balance of good

We and bring to think in are position. have looking disciplined we thorough good But more opportunities looking we're very I into what even We'll for right, Dan, built. you're that the platform be at. cash we've always scale

acquisition out the also that add there. the with will at companies we have by either build, add we like compliments same or did time, we that While offerings -- companies Goodsey,

from they So very brands, on and traffic brand got their from early of what offering. just like they a we're the seeing complimentary sister Goodsey, is, stage it's -- Goodsey a most while

it I to yes, but opportunity, that us does at scale. really look of skew for we'll opportunities look think So,

Unidentified Analyst

Thanks Bill. color All for there, ahead go the all -- sorry, right.

Bill Shea

I'd the our transportation some say brought going since tout take there. was to to of up opportunity accomplishments I figured I you

the we're to transportation put so we able costs our largely logistical in through initiatives able transportation on to in in While increase, mitigate we a certain and basis increases cost actually reduce were place, industry per-order QX. to that continue the

save small distribution us is several were helped of excellent but on enhance initiatives transportation product our of our really costs. most to number us trucking in we're some needs seasonal our not forward to customer, the our but we're us several our to which to firms also closer fixed, some get centers lock vendor, We larger and FedEx enabled very work We do consolidate the our here. And to package to brining inventory platform. some trucking We have to which the that play pricing. hubs reduce to, product only able able which able also partner to with we're closely importantly, and FedEx, lower an deploy for in distribution more costs, key our

our season, with past This some So transportation did save money. really we're it pleased us logistics help team. very and holiday

Unidentified Analyst

see about thanks for long to Bill, come nice Feels fruition, the to time, anyway been that congrats a for like talking color, we've and that guys. so

Chris McCann

Thank you.

Operator

with will question come Noble Michael from next Capital Kupinski our Markets. And

Michael Kupinski

a number quarter are talk on quite bit a from increase great a I this quarter. at have little Can Dan in floral quarter? quick a Congratulations did or couple of point, questions, you about affiliated you you of constant previous the those few. asked shops the pretty the still

Chris McCann

pretty any quarter-to-quarter. There was hasn't steady it been dramatic Michael. Yes, change,

Michael Kupinski

quarter, you increasing Okay. on And the believe, you any point? potentially last at I thoughts in about, were the prospect about of this thinking talked know those, had I that that

Chris McCann

No, then it's take year at choose a also the There wire process. it. so. think wire opportunity that in slow and is matter switch I a make of we're the still to a when to decision. another And think service. will time there -- do to florists rather that's marketplace of Florists is time -- We looking

major won't a holiday. a see now, before holiday generally You Valentine that or happen like right

time when that holidays. more between the see You'll there's more in

Michael Kupinski

floral David advantage, just been that? a Got it relatively prospect? to competitive Columbian talking and any make much thoughts has integrate about floral if on into small business, you all, production that thoughts significant indicated a any sense company were the are, there of wondering And conference, And be Harry within have consolidation recent the amount the seeing if to & for you with that, with and a floral you he I the of if with the you. at some producers. first owning was like you producer vertically And I was producer implementation pears a would of have that floral

Chris McCann

we have so consolidation some relationships there different the might haven't road, really haven't that as, you as the far be heard seen supply so Yes, one coming evidence that having seen And not several of consolidation but good down we really good any in. referenced. it And is with supply yet. very we suppliers we the of we're things relationships. locked like We've

So, vertical buying you not think advantages you I think one give integration. might the might on

Michael Kupinski

I you. Got all have. again. Congratulations That's

Chris McCann

Thank you.

Operator

we'll to Anthony And next, go Lebiedzinski with Sidoti & Company.

Anthony Lebiedzinski

Yes, questions. thank taking you good and morning, for the

So, new those just wondering see of growth, following chunk up -- on Passport the customer was program if did become a you I XX%, the good members? customers

Chris McCann

Well, the non-Passport of in customers. to seeing we the as growth investing grow, because specific compared the seeing are as sales where at on impetus Passport we we're you're very work file, pointing that again, growth retention and file customer continue that increases of there, we're overall, we're see thing Passport, in we're cetera. overall like customer we're with coming it to percentage customers so programs the out that we same double-digit Passport, grow see that higher XX% the seeing seeing and growth, et frequency well Passport again, to nicely. And in joining of look know, you because happy total Anthony, steady we And multi-brand customers from

how migrating pleased into the portends we're retention very them join So programs with so pleased what Passport, with the we're future. like rates, into them both of what we're high very file, the the customer we're the to customer that because we're funnel, getting in seeing file, bringing top

Anthony Lebiedzinski

good. Got it, that sounds

kind was holiday in demand, versus that if everyday you of demand also parse trends help very growth I be out, that perhaps, wondering So terms would helpful. if us gifting could understand could gifting you better your of

Chris McCann

because that in, to very increases, and year. parse sympathy, really season [technical thank holiday we're especially, even what hard just us kind times to for in well what see it's you we Well, at occasions, at double-digit go happy Harry is well, gets in then know, look & especially brands, the that but the during saw really it David mixed occasions. a out, into difficulty] And we you of when get good bodes food of

as customers, better Harry an & from where don't David January, Let's we're at returns everyday and example. strong but and still it. have see better you the holiday take where those season, just you getting

past, food it. get everyday business You've these and heard the brands, Bill while the mention weren't it some going because on of they us a took in focused in to

engine, So the that side development customer [technical for into front effect. play. product coming able we're some et lead to the in comes an on brand difficulty] which cross birthday, multi-brand brands merchandising to needed then eyes, cetera, from Flowers [technical cross create desktop the some get food marketing where customers programs that's time, everyday cycles well, and of leveraging, multi-brand X-XXX and and and lead the on anniversary, to programs and needed those brand, learning marketing good get get time, difficulty] them newer X-XXX try are to When Flowers our is

as to network you it. So that do you effect get start

Bill Shea

food throughout on David is especially, and the side everyday Yes, that & second of see business. big but did I holiday think what's fair double-digit growth Harry GFGB We say the on driver quarter, of the our gifts to gifting. within is

Anthony Lebiedzinski

it, Got to that's good hear.

Celebrations As saying Passport overall? that program, program far as you've what while, so renewal rates had for the are that a you're

Chris McCann

is would as but say that as very increased happy Well, we're we I in renewal don't what move time. on rates seeing break we out, we're

Anthony Lebiedzinski

did as you or Got you that can if amount, out, share as dollar the call okay. that us? lastly, And with haven't, you it, increase bonus far

Bill Shea

it was Well, single-digit we it's million as basis. Oh, significant. year, gave think, high on an to annual was -- close I guidance it to that to fiscal this $XX

half be would the that of year. of the half So, represented in first

$X So million. it's around a number

Anthony Lebiedzinski

all and it, you best luck. Well, right. very of Got thank much,

Bill Shea

Thanks, Anthony.

Operator

we'll Capital with Craig-Hallum go Alex And to next Fuhrman Group.

Alex Fuhrman

and on towards very transition you David. congratulations that you've to well wanted to really marketing spending it's much thank a a more like digital now Harry I at holiday ask going quarter. platform. taking really about the Great, started my question for nice & It sounds

the guess, know, season, first I'm just next is as at sales for increase digital we've matter can for digitally, we there increased David. you're I at year, be really I'm more Harry you but two wondering year marketing much you understand, scratching know, as business then growth. brand? after a holiday your rest do seen the as of spending I are the marketing year's spending investment think You to now quarters the could not what looking nice more still quite you calendar you at that and think about you that guess, what & increases everyday marketing really of you are the the years of that to opportunities in of the couple surface with gifting David for trying Harry go just & as

Chris McCann

I that's a there, good put think you that No, have Alex. point

First how David, play look of the & seeing at how all I well say is is we're really and operations at result and merchandising team, at that marketing performing there. first the there, foremost, together, the reflective and so finance and team off, Harry coming are with working

efforts because see, real to a taking marketing at it's holistic and what's working. view great it's So our

you We quarter, look so going as growth, than the more you our are got this more as and target. we seeing, see on main Harry after also -- We And new those us digital which everyday seeing, returns & David you I to especially your as catalog returns point, position as to really platform. at see think to shift marketing continue was -- that's look there last know, and and customer good going forward to expected good gifting to better we a for dollars us. would we more do efforts that I that. trim can little we're expect and And that increase you the -- are the bit into we that, see digital business, will our circulation, into the non-holiday spend time continuing marketing into saw we we

Anthony Lebiedzinski

where to around, the is are up Great, David, & started following members bit, more on contributor the to a you thanks, big members as who their Chris, David? way for little spend helpful. has And program Passport been way know, curious, or really signing the I'd brand up that's be take Harry that on Harry that to just new Passport over & it a finding up were you other then brand marketing

Chris McCann

of really. It's combination both, a

& each mentioned think we getting big to it. we multi-brand join a is brand past, signing that. platform lift that and once take the the that's and out including Harry members, got multi-brand Passport, that's so onto & we the David work introduce years Passport, been -- began David's of to way all nice and members driver now, Again, or Each them in saw we've when a up to I Harry there up. capabilities Passport two that

upon one driving like instead big we well. brand have So drive dependent of second as membership that big brand being Flowers to membership, now

Anthony Lebiedzinski

you helpful, very really that's thank much. Great,

Operator

go Instructions] And Davidson. we'll Bolton-Weiser D.A. [Operator next Linda to with

Linda Bolton-Weiser

Hi, congratulations.

was was little GFGB about the margin, but I'm ask thank or I not gross given Cheryl's the prior was the little, a GFGB impact up you? of a just surprised a in Cookies lot explain a not I line, can you margin So below lot, Cookies just in margin the the year-over-year, in gross impact -- gross up can because you more that bit year-over-year, it slightly the year, Cheryl's guess, why so the

Bill Shea

a points we we needs is tight rising you of as have where XX a that significant pleased GFGB, think, very basis have improvement market that we seasonal costs, well, so labor that's that's in know, Yes, see margin absorb with there the the we labor have. to that, largest again, I the out within headwind gross with we're component and workforce

did So mentioned, down labor center. drive our still that of of on do we costs the job respect to we're to out packages getting that. pleasing have some work in pleased great time. all the operationally, We customers, Chris distribution to Cheryl's, with With a very as

So efforts in GFGB. there's more we're but with going the on pleased overall, there, points improvement XX basis overall very

Linda Bolton-Weiser

next but how remind me ahead to of is, And so I -- that, this it comment Valentine's Okay. from be year was -- days. because benefit but just you you couldn't it that's I so one ask than FYXX, the it Wednesday, a sounded also that Day, that, I thinking guess, remember on and then modeling like can thinking made it'll we're worst Thursday quite better about Friday you

because looking the next you on Valentine's of year is the So or haircut recommend would revenue for it projection, -- Day Friday what haircut a we it forward? would XX% be just that -- comment you placement, can

Chris McCann

Valentine's of strong is Yes, no, have for day of week a very for the full -- we Friday actually it. in front a because the holiday, selling up

Bill Shea

Yes, I days for think, Wednesday, very Thursday, Friday, are all strong very good, us. you know,

same 'XX, it's have the so deal falls some we around following weekend. when to really is fiscal that's leap Sunday, Wednesday with year -- the weekend, and a better the be went on I in than on have have impacts -- Thursday skipped Thursday. year, in when a we and there, a it It we'll as going to Friday we actually probably slightly So think, is

Chris McCann

it's we day. one have nice a year leap But weekend and that eliminate

Bill Shea

It is.

Linda Bolton-Weiser

actually that's so marketing. good. about know, types you spend whole you at Is about Thanks, the falling ratio some just the looking your in more statement? talk for down different Okay. falling or then on ratio talk in And of just the spending, year-over-year, you marketing line, is marketing company, the and the income the they're net to can of where marketing just gross spending

Bill Shea

that helps than revenue. came which upon results again, the with more marketing selling clearly spend our based the fall other marketing Overall, we're and buckets within the higher with within marketing down, drive statement, and revenue and income There's on fall costs that and and spend very had getting line. OpEx the growth the would line but we're marketing of expected, percent a pleased ratio marketing All as selling our spends of efficient we we're our that better seeing. in ratio

Chris McCann

more top what fueling that into of seeing customers said is ecosystem, And there the really Yes. off. going we're pay with the that we that because is of and doing benefit we're out

So said double-digit and the done happy it. extra customer the go we point new we to we've so to with invest level of of were going very there to and that we're acquisitions growth, out raise

Linda Bolton-Weiser

Okay, much. thanks very

Chris McCann

you. Thank

Operator

Company. to return Benchmark with we'll the Kurnos Dan And

Dan Kurnos

follow-up, Thanks, quick guys, it one real just surprised didn't since up. I was come little a

around Day, get look impact landscape seen the Valentine's Day talked they're Is it and for about sort to in kind of I a on really -- tricky thoughts what a marketing like Just perspective Valentine's going from aggressive, margins? could is any you STD your of there how situation. Chris, that haven't

Chris McCann

brand, an you do Valentine's we is a well, our I and original it do experience. truly on look to customer of will It at our what, continue always I Day, expectations aggressive focus seen stick know on think, competitors. be to as the us you've great promotional think, what products, deliver are And is. we focus our holiday with all and

return. I this the know, get -- going marketing growth in to the holiday. think floral with were the you pleased from on we very also and very learning see let's a utilize good that we have have I momentum digital X% you'll mean, good capabilities the we quarter, into Valentine and side good

confident. very feeling we're So

Dan Kurnos

Great, thank you.

Chris McCann

Thank you.

Operator

And our now would our this the to over does conference for question-and-answer remarks. I like back conclude turn any to session. speakers closing

Chris McCann

thank have you And Valentine's don't Well, if additional just Day. visit for don't for A our Day to and who any is opening of we'll look last We'd of there us on the City seeing contact be to around to our and call, wows brands and the forget, And today team you, the Friday, Q on all-star in wow corner, so we call for please course, an York presentations joining of you any one now love and March for XXnd. Investor hosting on there. senior you And hesitate questions, us. you one of New in course, forward all Joe Day the Valentine's your to note, then. as questions. management morning see mentioned We'll have the

Operator

you for attending has Thank The now concluded. conference today's presentation.

1-800-FLOWERS.COM (FLWS) 31 Jan 192019 Q2 Earnings call transcript