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From a WATS Line to AI-Driven Integrated Marketing; Well Positioned for Next Leg of Growth

1-800-Flowers.com participated in WTR’s Consumer Products Virtual Investor Conference on June 5, 2024. Representing the company was CFO Bill Shea. This report contains a transcript of the conversation, which can be accessed on demand. Link is accessible in our full report. FLWS has been out in front of technological developments since acquiring the rights to a WATS line that spelled 1-800-Flowers back in the 1980s. In the 1990s, it developed an e-commerce model with the introduction of products in CompuServe, and it became the first merchant partner of AOL. Today, it has expanded beyond floral into food and personalization products, making it one of the largest publicly traded gifting platforms, having gone from $700 million in sales in 2012 to $2.2 billion in 2022. Pre-pandemic, FLWS was growing the top line at a high-single digits CAGR. After initially benefiting from the pandemic-related lockdowns, like most DTC models, there was a post-pandemic hangover that has resulted in flat and declining sales since the 2022 March quarter. However, we note that 3QFY24 sales are still 36% higher than 3QFY20 sales at the outset of the pandemic. The company believes it is well positioned for significant growth once consumers are ready to spend again through initiatives such as enhanced product offerings, bundled products, personalization initiatives, added tools for corporate gifting, and enhancing its greeting card offerings with the recent acquisition of Card Aisle. Gross margins are on the rebound. Pre-pandemic, gross margins were around 42%, but dipped into the low- to mid-37% range in FY22 and FY23. Initially, the company was expecting gross margins in the 39% range for FY24, but margins have been coming in better than expected, so now margins are expected to hit 40% for the year. With the balance sheet back to being underleveraged and the company generating a decent amount of cash, acquisitions are back at the forefront. Historically, large acquisitions like Harry & David and Personalization Mall have taken the company into new categories in a large way, while smaller, tuck-in acquisitions like Shari’s Berries and Things Remembered have bought IP with no hard assets. Still others, management refers to as acquihires, are basically just bringing on some talent. WTR held its inaugural Consumer Products Virtual Investor Conference on June 5 and 6. Presentations are available on demand via a link in our full report and 1x1 requests can be sent to .