FLWS - Earnings call transcript Q3 2020

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Operator

Good day, and welcome to the 1-800-FLOWERS.COM, Inc. Q3 2020 Results Conference Call. [Operator Instructions].

Please note, this event is being recorded. I would now like to turn the conference over to Joseph Pititto, Senior Vice President of Investor Relations. ahead. go Please

Joseph Pititto

morning, to Good fiscal you joining for Xrd Thanks, X-XXX-FLOWERS.COM, and Inc's. today discuss our financial us quarter. Sarah. thank results XXXX for

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

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

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

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

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

McCann. over I'll to turn now call the Chris

Christopher McCann

a family joining call on morning, and as the Good begin, know all Thank of or by I'm sure of challenging them, have certainly, recognize you or people heroes. the like us this suffered front friends today's acknowledging truly on They also lost during many truly, to out And all that living have crisis. to to extremely period this who especially I'd who unprecedented in have for our of result we're pandemic. COVID-XX crisis. go are us this that this to working ones. even I'd those all like morning. someone everyone. those our hearts lines loved

in to had safety As of Even third moving respond we few proud with the the rapidly associates from you'll as chain. health I'm in our to challenges the of last enhancing face today, a supply period. the we to set our hear quarter. moved remarks quickly that our these weeks the the COVID strong team and challenges and impacted way of our managing crisis

fiscal demand, our the a Food acceleration you'll April, seen This in morning. hear and more fourth demand continued has what here brands. quarter, strong especially enter this we is we the call As e-commerce later the in very this have through Gourmet of about month

expectations. self-consumption continues business to XX% from strong positive gifting ahead double-digit Food a the across by continuing Baskets consolidated In we trends In Gourmet contributions reflected terms and of of was solid in continuation third The the occasions Berries, fiscal which that period all Gift our the Shari's we've for segments. reflect throughout revenue quarter, driven results and of growth the our segment, momentum X increases increased everyday well year. our seen perform a as of growth achieved as

time. their increasingly highly as to them feelings fourth Harry Cookies, extensive into to our saw the quarter connected Simply and help offerings customers we express difficult turned current and relevant and quarter Bakery, Stockyards, our Factory, Cheryl's fiscal David, throughout our The Importantly, Popcorn and & grow in stay X-XXX-Baskets, demand Chocolate, customer have this during accelerate product Wolferman's

quarter the segment, saw continues softer Day Floral for March contribution COVID-XX in with segment were period. it last consumer to for demand Consumer Revenue growth even the crisis. double-digit when key the not the the of have few stronger brand the and this where our weeks impact margin Valentine's market extend growth In in its during leadership of would X-XXX-Flowers been we

hospitals This gathering form the occasions. And first in on took sympathy occasions, as deliveries funerals. on restrictions wakes limitations such of and get-well to for

environment, reverse we the for occasions sending gifts this seen as fourth to more pattern Importantly, the fiscal homes. enter are their to itself many quarter, these we've and new as and adapting customers recipients' current are

help Passover to and to everyday occasions As them a well the Easter, express turn result, increasingly stay customers X-XXX-Flowers and occasions. for trusted as as are themselves brand holiday connected as we seeing such for

business We're were seeing would share top patterns the our of crisis. impact continue stronger during solid QX we line our the not the results where bottom position it BloomNet market for that and have even COVID-XX grow in to similar been for quarter with

closely on to independent local country help environment. working focused florists their and across the we current businesses weather support the them keenly BloomNet's Here, with challenging are

reaffirmed is note and florists and Before navigate company, us. year, I as ask guidance our the the quarterly that on insights Bill our to country, I we share paramount of thousands associates across these and vendors, customers, safety trying think our our health the to suppliers our times, for it's BloomNet our the of uncertain across and some results and important to

to in Food to third quarter. demand consumer the Baskets we provide continue including Gift business the our make continuity. We're during maintaining safety segment our and our and by Gourmet facilities, products necessary of while warehousing evidenced to We distribution well-being manufacturing, well-positioned made for changes and across our saw as associates have growth for respond and and the our to operations the

product to diverse our line our our leveraging to built over chain. with of combined platform and maintain labor this our to environment meet and simultaneously capacity, well-positioned managing challenges and continue operating leverage agile by manufacturing while be years, the Overall, will ability that We are our supply relationships deepening we the our customers. with we've

engage our that with We sentiments them express in remain committed to the help connect and environment. more customers to our current are ever than important to mission

results, his and growth. behind -- to insights on let for Now the Bill? continued to outlook the Bill turn our and our me call discuss share drivers over

William Shea

Chris. you, Thank

We strong year. and fiscal fiscal are for very quarters three quarter results of third the our the for pleased with our first

uncertainty there overall While significant COVID-XX and floral holidays due Food e-commerce in consumer gifting for demand Gourmet everyday and our products environment seeing is occasions. strong and the are our very to we Gift Baskets the for crisis,

we e-commerce the holiday. strong noted, solid a quarter, including Chris Day growth third As Valentine's throughout a saw

for acceleration the period As we ended April. the demand current the of and of holiday quarter, we saw continued an throughout Easter fiscal month fourth this

we These forward, trends affect include: remain headwinds our associated in will & that us stores place of stores, David in retail XX the With In difficult case to demand closing that said, expect made March current the there the are costs decision local As regulations. our we locations. the retail strong. e-commerce in the of and not some in we quarter reopen Harry look took the that of with with accordance state recently will future. and XX

As fourth costs. will charge lease store in in and an costs, result village for Oregon our quarter closing This remain will open. Medford, other obligations aside, employee in a onetime store our country

segments. fourth will addition, impact our have This in In and we BloomNet wholesale a seen Gourmet within business. our quarter Gift on reduction Food our Baskets and

cautious our impact wholesale large orders the due anticipate reduced uncertainty customers the wholesale a to as holiday surrounding economy. COVID-XX crisis overall year-end season we approach taking on for consumer of are Additionally, the the

crisis. We help have also waived them for the weather BloomNet certain of April members COVID-XX our to to fees the month

changes are impacts. staggering an our overall some costs seeing distancing, of our are other production on facility make other operating said, facilities cleaning to the demand changes efficiencies. across sanitizing reduced seeing we Lastly, to and in is increased that made, brands offsetting with distribution impact strong as that acquired associated enhanced and that cost incremental and we warehouse associates. our schedules our shifts, revenues include: we the channels provide and for as among manufacturing, have and continue these These the e-commerce safety well to the the social well-being With have

reaffirming going result, will in opportunities we for see our which guidance a XXXX, moment, a fiscal forward. continue are to to business As our and we discuss I grow

some for down metrics the breaking key Now quarter. the third of

to revenues year with compared the growing revenue the Floral Food and Gourmet all Total Baskets across X.X%. period. Consumer X up BloomNet growth grew $XXX.X million prior This of $XXX.X Gift segments, XX.X%, with million in up solid XX.X% consolidated business and X.X% our

up reflected Gourmet throughout were of Floral, Food Importantly, Consumer revenue to including recognized of Easter were in initial the much the Baskets, of holiday of the strong March shipped BloomNet, growth most of In approximately the throughout in holiday, e-commerce up period. COVID-XX strongly And of X at in and most in was during which quarter X In at impact revenues crisis. before the quarter, Gift related of increases most dipped Valentine's more demand the segments up dipping X% the March, than the was end the of it XX% weeks last all before demand. and end revenues quarter the April. with the

for XX.X%, Operating period, compared product the compared prior XXX points XX.X% revenues total in reflecting XX.X% a with with Consolidated primarily year quarter XX year the XX.X% gross was in improved expenses mix. the profit period. as prior basis down of percent points to basis

deferred the compensation benefit period, and strong plan. XXX(k) The improvement revenue these the resulted combination primarily nonqualified OpEx combined quarter from factors reflected This in quarter compared per the with company's XX.X% year period. of growth an share. of the for in the adjusted with or of the for was Net loss $X.X $X.XX to the EBITDA a loss $X.X million loss prior million million in $X.X in

Personalization adjusted the loss $X.XX share loss company's certain a year million of of the planned $X.XX compared was $X.X to net related or Excluding a for with per or share net in Mall, million adjusted loss the $X period. of an quarter of per acquisition loss prior costs

of terms expense. corporate In

to million expense, compensation, $XX.X including million compensation fiscal The with company's to impact million year-over-year improved third $XX.X associated quarter, $X.X with stock-based the in related improvement For corporate nonqualified prior the is year period. plan. XXX(k) a deferred compared

At investment the our was position cash $XXX.X end of and the to Turning third our million. quarter, balance sheet.

Our X facility. line the million, working of cost, credit within was revolving deferred and term debt balance, $XX.X our capital had financing outstanding borrowings net we under

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

full Regarding fiscal the guidance year. for

As I strong this combined for are the through growth have guidance This year. earlier, of quarters we three the achieved stated first that our full fiscal year, we XXXX headwinds of with the positive reflects than continued the first offsetting mentioned trends more weeks current the fourth are we I seen strong the e-commerce fiscal have X demand earlier. through that that quarter. the These reaffirming

range approximately including the growth X% to guidance of follows: X% consolidated is year the free our from with for growth prior result, to to as total brand; Berries growth in of adjusted contributions EPS X% in the million. a Shari's year, organic the the for the compared XX%; $XX with X% As EBITDA combined the cash of the revenue flow to million XX%; and $XX range year XX% growth to of range in XX%

in this reopen noted decision our EPS we with and the stores, guidance adjusted acquisition onetime the year with and David certain the costs we not release to excludes & associated planned As PersonalizationMall.com. made associated press of for EBITDA our the morning, Harry costs retail for certain month this

turn back Chris. now I'll call to the

Christopher McCann

Bill. Thanks,

as the first up, of we've period. revenue during two for COVID-XX the stronger seen our three all fiscal weeks growth impact quarter, noted, it We through the growth the across crisis the three continuing the not sum been solid our growth of of year. in of were achieved that, last to would have segments even momentum So Bill quarters strong

e-commerce turning fiscal strong Through our help them fourth quarter, current customers, we're the new to of and seeing our product first brands offerings connect. demand existing, express X are both expanded as weeks and the to across

economic ahead, crisis look overall very of With the we well-positioned As to grow to is continue still assess. and difficult impact the we to are that said, scale business. our

company we're people the consumer and sentiment. well-positioned and express and with enabling to connect, for a current a inspiring focus on As emerging

our ability on our our in our focused engage ability unprecedented management This, us coupled drive confidence our our and our the flexibility; in and changing areas of highly rapidly business in that continuing and our customers this invest maintaining care associates, diversification, and growth. business strategy: remain to and customers; manage team, florists safety give our taking to financial elements our our our platform, with key and help X our to of business will of strength of environment. product BloomNet health experienced future We

engage and all begin help Now It it's before the their enables with them to to and I hard company challenging themselves associates our as connect, I'd period. important is to thank are and during a dedication to like for over Sarah that commitment express increasingly thinking sentiments customers this work their during time. turn of us that incredibly call innovative to difficult their our Q&A, this

repeat Sarah, instructions? if Q&A you could the please

Operator

Instructions]. [Operator

Our first question Craig-Hallum. with comes from Alex Fuhrman

Alex Fuhrman

meals. of as, Foods impacting sweets in now X-XXX-Flowers your Can past ask come wishing us It brands? the out foods all the from X these country, different how I floral and the business X you at that's as wanted business to like walk has would and New softer York through prepared everyone before. regards tough around stronger kind progressed over March Certainly, certainly, weeks? got and there brands than of best and times. -- to in in about the kind been kind back many has seem your range to sounds like Gourmet during late It how the of

Just and then how performed perform them has in in those in April? of then to you're quarter? how curious brands expecting each your March fourth And

Christopher McCann

Alex. we impacts and food our we hit, Well, fit. of seems I noticed proud then when to if could think back of diversification is was our we make start as economy. this and product the that that have in that, started at our things as really thing definitely are that's Great, that the brands, and different the for really well-positioned -- chime how society first and he one to Bill we I'll look a we're

started brands soon and to since as accelerated then. hit just the well food So as really perform started to crisis our have

so floral took those in the March. really The couple of first brands hit really weeks or the two of a crisis, of weeks last

we're changing. scrambling as out rapidly rapidly, And were So to the put company. manage happening we that that the were across trying and again, fires

things basis hour. a So and management team times on a of by changing regular day couple meeting the a

the business start then. And So those were for the into society, all we of up those been as continue, we business we a well, that as But crazy floral some times. since for really reasons these then we've pick and moved go of express efforts into this to are as isolation, has making people looking and accelerating really connects. seen when April connect, form that to again, yearn of different really and connections, all we're

to And some consumer food are in do and there? Bill, fitting floral both line, product our So brands, that sentiment perfectly. want you chime

William Shea

at growth on top growth of that trending My before on that third comments, March. -- end of Yes. -- towards remarks formal Alex, last Consumer Floral of X% I of double-digit so only quarter of Chris' that we on and two my be top point, and the would the we in Consumer kind BloomNet. weeks were the Floral were impacted indicated BloomNet

did that get As immediately, Chris brands food lot mentioned, a of the a almost Easter benefit but demand. was

April. until ship So really that out didn't

the the going almost And there food to the be in nice Consumer calendar of at immediately that while So April you'll turn some in of got quarter, of the the -- is on we quarter. a brands, fourth see ultimately benefit mentioned, from -- in as saw rebound Chris the most benefit the we X. was third Floral really

Christopher McCann

But into on with much to we've that's the as & e-commerce moved business stores we And side. on David, And and see. being the where been hit Harry we the we leaning that put even revenue. And we're with shifting into certainly e-commerce a strength Harry that an anyway. look if March, so that's & at David, be closed

all Cheryl's this up really and the followed I ability the our And strength -- on say, outpacing -- earlier by and would at & Popcorn X-XXX-Baskets. demand David The it and showing business, they're Factory, to is with e-commerce then keep On Harry started the really point.

Alex Fuhrman

ordering the really if getting bigger? customers That's Has could Harry and as more a of customers as you just other well? those existing all Foods Great. strength I & helpful. a ask, at and lot your David you're And been frequently that just then the new primarily quick Or seeing into brands follow-up, are coming Gourmet brand.

Christopher McCann

And a customer is really been new Alex. combination existing activity. has but customer strong, so growth fantastic. really, is Passport It's activity both. customer of Sure,

board. at QX, since XX%. that growth then. the seeing new we're customer If had That's accelerated in So across of look we even QX we

So our especially file what multi-brand forward, move strengthening we're we positions as customer the what well seeing seeing happening really file. to customer with Passport, behavior, really us we're customer

Operator

Kurnos next Our question comes Dan The Company. Benchmark from with

Daniel Kurnos

And sort tailing sort now. about go just to night doing bump your guys that what the or Chris, at winds right e-com sort eBay had a tailwind the retain the on incentives? to maintain make so deeper be seeing, of that customers out just doing of are comments influx little marketplace. trail excuse me. Or I you're seeing a And of sure curious you off -- what tailwinds, sort of talking in marketplace right incremental may last in you're think the are can be you We now? people bit that may the of looking you you're of

And what competitors that for lead, your standpoint? months? pretty competitive that is the a then Are build be you've may struggling your XX you're helping mode XX, in been last this this much more doing environment? build you from seeing secondly, And

Christopher McCann

you, Sure. Dan. Thank

at look think, the what's in taking and we first necessarily and at marketplace, I consumer not place look consumer As I sentiment, foremost, confidence.

we go that moved consumer going mission our But to of challenges as to express. see and some confidence place fits people inspiring sentiment a consumer connect bit. business to economy the is a So overall, really and as our dipping through we're struggles fits

that position you affected as everybody. that really is well-positioned look this of consumer company, gone front out think, lasting to that of was a the be good sentiment, And being we're of so And at expect capabilities plus in in coming this all that's crises the sustain other -- that. different through, I our We to of we've crisis. one change a

we're efficiency past. the of we in we're look the do side Gourmet Food we're that in the giving more promotional the and we floral we're really seeing that seeing holiday about at and us to seeing into the the customers, lean we see as move on Day the of then good we're lean acquisition both less to rates seeing that holiday And moving and ability out ramping midst of also side, to repeat right our the marketing the on than Mother's and what we're from that, growth we Mother's talked Alex doing great into on -- into now, our be efforts Day up holiday, then coming As the because effectiveness. Mother's the When the need have we're so, to clearly, Day rates opportunity. beyond ability seeing customer that. is we but And

a sustainable with as So stay sentiment we that's businesses for that. well-positioned and see this our to ability our

Daniel Kurnos

seen Have program? funnel could on where more you PMall, uptick also of trying we you people Passport result us a that just in be any And into update that would to be if this? may usage Are then as you helpful. stand on

Christopher McCann

Passport increasing utilization So of uptick on great seeing an Yes, as first overall percentage to as from as members Passport signing Passport people up base. Passport. from to well customer our we're active purchasing on both

the customers file existing as customers, continually coming grows. overall et that's with seeing nicely, the Again, in, So cetera. new customer growing we're very just

So we're there. participation good seeing really

is on competitive I seeing do we're the on leader competitive are, anything we special set, the a And on on the our focus brands, key from we the us, our we positioning not product competitive point what think element especially As for being a of And customer that we we again, focus product. view. is market. experience, look diversification at

been talked building. the You that about mall we've

from when The is economy move in financial floral, the back fact than the which we time food then. softer, crisis were -- will crisis likely, back we move better the be into if where most our we will that very a and perform into 'XX, 'XX where period different businesses our

consumers, that and line we're the abilities, decisions customers, we been again, making. again, where bring the to the that's world which the product world, in confident is, an there driving today to that our we out we've very the So consistent sentiment e-commerce to stand with the

Daniel Kurnos

update And any PMall, Chris, there? just

Christopher McCann

Yes.

fact say litigation So unfortunately, due litigation. the we commenced because we was at beyond it of in saw, statement we that update, point, April that statement as current be us this is on back in to when that put filed out would all you transaction this irresponsible we're the our comment that can that to

Operator

from comes & with question Company. Lebiedzinski next Our Anthony Sidoti

Anthony Lebiedzinski

mentioned of very your versus you look Chris, you now that have food do XXXX, a So last XXXX, strong the business when business recession now. at you

you but your So for as confidence business, mean, you just can conviction and conviction what I not looking your level to maintain I get guidance? the versus Just as that maintain again, business wanted who gives recession. last be just is may now to the to familiar guidance. that those with ability at your your

Christopher McCann

Yes.

things, more I that It that to certainly gifting customers a their the of broader solve gives the it's is product us Anthony. out we for have think opportunities couple needs. line there

it's the in of think also exists a marketplace I that today. the sentiment different combination

think it's that. combination I of a

there? referenced being wholesale at closed businesses that strong taking the color completely a reaffirm see guidance. and As we that stores confidence quarter retail look being quarter, as or our quarter sustainable, that challenges all of in demand to Bill on look some by in offset e-commerce our we the either the gives us a we had guidance any the hit of with the the we at the other bit specifically, Bill,

William Shea

Yes.

that that's offsetting fourth in to balance managed flexibility, the and X regard the sort retail. accordingly, that With beyond strong the -- again, that to doing the impact a weeks. is is how and has economic very and very that's of sheet that And -- weathered that by last and comfortable stability a offsetting before. is we've built to the And and financial we weather the plan been knows kind of that we challenging quarter of and over to environments strong our e-commerce biggest we feel able really right react wholesale far, and to our be downside very and channel. respect any we're now have strong going team And recession, economic management ensures downturn. with Now

Anthony Lebiedzinski

in the And favor? would now last competitive versus you your more say landscape the is recession

Christopher McCann

say, would probably yes. but say Tough I to

I competitive think several leadership the Baskets just position that side the company. the in last our right segment And as Gourmet business, now. floral been but position the are well Food landscape, not position in on on the we the business, Gift that years positions the of of we've leadership a the we've built really us now and

Anthony Lebiedzinski

that -- Got have it. know you Bill, as have And those while then I any we're generated? sense you revenue Harry as onetime, you're and assume David of could give closings, And as what unprofitable, you stores that's an what also, costs the that to do kind were far why to be? subject, costs us on you will but can if closing & just they And those they're estimate -- as sense what them. as to the store do I a

can how store with I'm next you're of closings? done a that if correct lift So year fiscal with the get the much once assumption, you

William Shea

$XX quarter revenues on charge The million impact in and million be the million. pickup. top to a $X million EBITDA annual probably of probably about but an The will $XX basis line, fourth Yes. $X the between million $X on

Christopher McCann

long e-commerce that, Harry the go people it like as for the with especially of business, decision & since we we've been period been something time. look being and company migrating a driven Harry to at have that as to as difficult always it The we we that, & David for I really the stores, challenges a borrowed an affects at look the David -- As business, business. the

in fourth certainly business all throughout we the and strong but e-commerce the look for of about put sense as exit quarters growth So opportunities, right & focus Harry at year now business talk ability stores accelerating retail of where David in us quarter, we're of the the to first made our growth business, the point just a out such on and into seeing view. the from future leaning the three the earlier the

Operator

with from question Bolton-Weiser Linda next D.A. Davidson. Our comes

Linda Bolton-Weiser

and big that & & one you versus is last recession? guess your in product end, Harry the David is about own about now. now offering hit the David positioning. or I recession lower the modifying may line Can you performed And in the you in pretty lower difference recession high-end positioned talk Are here? type thinking some price how it offerings business terms the in pricing be we last of Harry as

Christopher McCann

you. Sure, Linda. Thank

I didn't we David the Harry recession. key own -- & factor is, think during here the Harry last

the So I'm we've growth not expand line. continued as that. of the line been product going & to product comment is really seeing we on But Harry what the David

Harry & and Gourmet really well today, is that one whole benefiting David the of Now which is prepared meals different like the areas we moved in the things meats into last that. year and two, or us

from if a from that at the how you which just line, product a as Popcorn one that now. think that's tins things Cheryl's to Factory, our pop great the seeing. A are seeing of we're really with expressions And that cards we're we with lot promote, of our from we company sentiment but pop, evolved not e-card, $X.XX The look I we've at the things the David have if to those connect price across with much item with that people any built giving it, you are manner. more that people opportunity on the to & platform look Harry connect card and to activities brands, different we free an like a you our cookie express for overall, from frequent ways lower sentiment in and especially points, a we $X -- in have

utilize line can question extends So we've regarding yourself free, our I our the brands David. to Harry platform across you ride been that brands. yourself for and prepared building think so family Harry of having our really David express again, from up And to product your meal & & a hand

Operator

from Our next Research. Doug Lane with question Lane comes

Douglas Lane

of a things. couple Just

Shari's of much and Gift XX% the Baskets, growth acquisition in is the Berries? how First that of Food was

William Shea

of probably It's half. about

of So XX% we probably of half Berries, and of XX% organic during saw is generate the about the about quarter. it it growth Shari's

Christopher McCann

Yes.

organic So during we've on e-commerce as that that our digits an we quarter. said, shows acceleration seen growth growing the the double is And that of since then. side

Douglas Lane

be going weeks, a last I there. from in on that's then far profitability thinking standpoint. lot's good of your in away strong might December we're than growth is you year, not That's of a stepping organic the approach No, past? the Can for course, the this back the how too big sort quarter from X X a quarter plan you what differently to changed you're perhaps fourth you And have pretty was going through having for early the quarter, here, us may to and which, rate. walk

Christopher McCann

Sure.

think move that's our manufacturing? holiday of capacity is time visibility lean approaching we at going season? the do demand saying, quarter from. we of how distribution? as that we the point have expect into the that be supply in the expand our in into to there we're What's how okay, So into this foremost, our How is holiday the we really, we do that? fourth looking How first I planning with what So capacity chain? What's -- and the

different just the how expanding of side it We manufacturing there, utilize our we florist on capture? expect that out the local And the the utilize, local of marketplace. much utilize, business? we agile we can without demand food the be can we How we will vendors the capabilities, be partners

William Shea

Yes.

just e-commerce going I again, going It's, business. think be, be shift to to more side dominant our it's the we're on of business. the in a

see We very grow there. demand continue to strong and

retail there, expect the will strong. to of retailers we closing are But Wholesale David with nature expect Harry be that and the of some will We out down. continue. of be e-commerce, stores that because of & to cautious the be down

Douglas Lane

Any incremental technology CapEx ago? thinking spending or may of, there or month may you're so been be a have or marketing not that

Christopher McCann

changed in time. really. place necessarily The those plans this And not been really No, CapEx again, in wouldn't plans plans that that. the prior I to at so. have our And place. say in spend, were hasn't -- technology point

those seen haven't at to We need any point. change this plans

that in So approach, no. no real change

William Shea

to continues world world the mean daily. change the I almost Yes. is --

the and more appropriate. day in holiday we're the points take see we modify continue fiscal and for right as process So plans for data and 'XX now our to each planning we season

Operator

Instructions]. [Operator

Capital Our next with Michael Markets. from comes NOBLE question Kupinski

Michael Kupinski

I dropped problem. I'm there was There a the line briefly. sorry that from got call

first questions apologize before get so mean, I some are well. I that my impressive I But I follow crisis. these answered. outlook and congratulate so I questions, want of were not given this And into to faring all, companies if you on numbers

well. so remarkable you're doing quite that so it's And

COVID the a you talk of in any that First about extra I the in quarter, had may But little quarter? you first were impact. was have -- cost the the bit costs all, you particularly, from the wondering if could revenue in there talked last impact about potential

Christopher McCann

Sure.

thank basis, we -- think continuous I Bill, like on a the you, changes color of cost But more impact But little all, that. social first a had on as the you Mike. give of distancing to team rapidly things respond to why and impact? don't the

William Shea

at end impact little happened, little obviously, we the of as of margins. incremental the A you had didn't a this towards we extra retail because QX. at And was costs. a that we the in of mix loses QX. margins, bit bit saw of a gross But but operating retail did the product though spend some bit little the -- in gross end margin it have it impact money this little even QX, end of year, high Yes, the of high dollars time we saw QX

going -- -- some -- will our costs regard gross some impact we And operating costs margin incremental we with will have to forward. have costs that

have normal to We've We because are in as -- employees. multiple environment. hourly shifts distancing, of adhere operating distancing. to not as as a efficiently our We've wages we we're of to social moved some the social of raised

So we're demand With strong not that as efficient. said, the strong. is still very e-commerce

dollars, So margin margin gross we're the incremental could down. be percent driving gross but

standpoint, all back we're I types We're out holding from think at items And and managing discretionary an spend. our on those OpEx looking that. of

third OpEx. the in saw you quarter some leverage on So

to operating fourth continue see on in leverage You'll our line. expense the quarter

Michael Kupinski

last quarter? haven't dollar you was identified in And what amount the the

William Shea

did not, We no.

Michael Kupinski

changes assume It then talk acquisition in media, down coming marketing -- as have Can about regarding some I you customer your be may are bit a your little costs as are marketing your across word question marketing even your efficiencies the any on could would and may efforts. and you your the just marketing? come the XX%. costs it little Okay. about specific was down, costs budget? down in if search wondering changes of much bit about Can a talk little made a be efforts of has I the And efforts? board marketing you seems talk last like significantly. bit you -- Have

Christopher McCann

Sure, Michael. And thank for question. you again, the

look leaning into efficiencies think those. efforts, at in our of as in time marketing brands period marketing different because the such we're our good we seeing this we've I been

we significant X mentioned QX, so a growth seeing new in in brought accelerated I customers now in XX% ramp-ups are weeks -- and of that acquisitions. first that's had the we earlier We customer or QX. through

returns on good efforts. really getting marketing we're our So

the And -- the matter have. the manage a capabilities now of which it's we capabilities, the inventory as supply marketing, demand, marrying and generating we that distribution -- and marketing, which with the just is

So from as than customers good we're getting what really family, them working Passport that family our value and we for then to more then though, customer into demand, efforts get in brands, brands. program, is them key well them our of what which them lifetime acquisition, such introduce marketing chasing focus across we brand, buy the to Markets customer that seen rates. the the looking for. the into has growth developing we're Get -- introduce And one the us. it's of for get us, family know, that

the okay, we we marketing with But it's, at spend? efforts, when initial what do CLV our think look most what's the What's initial those the ROI? opportunity is customers? importantly, So

Michael Kupinski

a wire terms trends talk And you the service of you of has bit BloomNet could you. about And if little can in little the Got shops? just about what bit? the there. bit affiliated number then talk -- It a little happened a

Christopher McCann

we local society. compete are -- are and our business to that purpose at their florists to our our the think businesses, These of are I successfully fabric look foremost, BloomNet generally as local small important is American BloomNet, markets. so local businesses in is help businesses, So for family-owned BloomNet and BloomNet, first

important us. an for it's aspect So

put challenging the -- to this We together weather mix them time help time.

financial florist that with benefits we Our florist, cetera. marketing support supply that some the to benefits benefits, could et program bring them, has

well So but our months. we're Day Day Mother's that and for not expect, the beyond surge through this working summer also with BloomNet for florists them to prepare Mother's the business we just

Michael Kupinski

what shops just at mean, had percentage open? I all are this would still are are those much point? now -- I have to some imagine the -- most I'm shops And some you wondering, with of disruption closures, with open pretty

Christopher McCann

And is florists may That's much The been A things news different the think municipalities, to different question. isn't business. Sure. able be door the out the to to as operate, But where but deliveries essential states. your up. very like able front backdoor. seen of is more the are businesses would being you're restaurant be the operate open doing have a, industry, floral local according good I an eased good more that and

Now have of again, they'll social challenges because distancing.

most that closed. that of were is them those news were good the that have closed reopened have Wholesalers reopened. But

the floral better business. of the moving things in side So are

William Shea

is that are Michael, last And majority the large of florists point open. one

Christopher McCann

Yes.

Michael Kupinski

you bit potential of was suppliers? just can it's it what's Got know head for here, your you. the little getting from as Are What inventory, China? then happening about a products. And there? us still Just question. I into a pricing? supplies you talk are season But I about kind of sourcing other a China? you topical flavor coming from give disruption, looking wondering your you Is -- at favorable strong

William Shea

us what's issues they of the down on, what's all, been there -- of all now. with tariff coming -- out early there was first back when, way kind some was now. guess, for factories. prepared a China And of issues. little of coming Michael, the getting are Yes. It difficulty things -- the And I a little bit shut

So -- it a that and opened the China up, the has is little chain is be slower than really we albeit supply have. back open, may

not that an from So we're standpoint. issue foreseeing

so manufacture product continue at and secure to -- Chris get little strong, has a chasing we've mentioned product bit. we're product, has times, But As which the the several demand the e-commerce, product to been been able get inventory top. the and

Operator

This back remarks. our I CEO, session. to for McCann, turn question-and-answer like any the conference Chris over concludes to closing would

Christopher McCann

thank your your all We questions. us support today. and joining So appreciate you for

certainly matter with And If contact of any you your encourage is forget, to additional coming And more ever. moms all out you and connect us. reach have Mother's than moms hesitate questions, soon. the please don't don't I Day life. to in today,

to mean they Thank you. much how know them Let you.

Operator

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

You may now disconnect.

1-800-FLOWERS.COM (FLWS) 3 May 202020 Q3 Earnings call transcript