1 800 FLOWERS COM INC

1 800 FLOWERS COM INC Annual Review - 2023
Your plain-English guide to investment potential

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What They Do & 2023 Performance

They sell gifts for every occasion—flowers, gourmet foods, and personalized items—through popular brands like 1-800-Flowers, Harry & David, and Personalization Mall.

2023 Snapshot: A challenging year. Sales fell 8% to $1.69 billion (the second straight decline), with weak holiday sales for Valentine’s Day and Mother’s Day. The company is trying to adapt by:

• Cutting costs across brands ($12M saved this year)
• Growing gift subscriptions (up 25% for wine, snacks, etc.)
• Using AI to personalize gift recommendations

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Financial Health Check

Revenue Declines:

• Consumer Floral & Gifts: Down 7.7% (budget shoppers spent less)
• Gourmet Foods: Down 9.4% (big retailers ordered 15% fewer gifts)
• BloomNet (florist network): Down 19.1% (fewer florists using premium services)

Profit:

• Lost $0.82 per share ($30M total net loss vs. $0.18 profit in 2022)
• Profit margins dropped in every division

Dividends: None paid due to debt restrictions. Investors rely entirely on stock price growth.

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Wins vs. Challenges

✅ What Worked:

• Gift subscriptions became a bright spot
• Saved $12M by streamlining operations
• Expanded offerings with Fanny May chocolates

❌ What Didn’t:

• Tech issues hurt Harry & David’s holiday sales
• Marketing costs rose despite falling sales
• BloomNet revenue plunged 19%
• Wholesale orders dropped sharply

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Strategy Shifts

• New Goal: Be your one-stop "Celebrations Hub" for birthdays, weddings, etc.
• Tech Upgrades: 94% of floral deliveries now have real-time tracking
• Tighter Credit Checks: Reducing risk from business customers

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2024 Outlook

Goals:

1. Fix tech glitches before holiday seasons
2. Stabilize partnerships with wholesalers
3. Grow luxury gift bundles (still popular)
4. Protect orchards/supply chains from climate risks

Big Risks:

• Weather disasters: Droughts/wildfires could destroy Harry & David’s fruit crops
• Profit margins shrinking: Competing with Amazon, Walmart, and local shops
• No dividends: Loans block payouts – pure stock gamble

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Should You Invest?

Reasons to Consider:

• Strong brands in 10+ gift categories
• Loyal luxury shoppers still spending
• Subscriptions create steady revenue

Reasons to Avoid:

• 2-year sales slump with growing losses
• Florist network shrinking fast (-19%)
• Profit margins eroding everywhere

Bottom Line: High-risk turnaround play. Success depends on convincing shoppers to buy all gifts through them while battling Amazon and budget retailers. Only invest if you:

• Can handle stock price swings
• Believe in their "Celebrations Hub" strategy
• Don’t need dividend income

Think of it like a birthday cake – could be sweet, but might collapse if the recipe fails.

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Transparency Note: The company provided fewer operational details than typical annual reports, which investors should factor into their analysis.

Key Takeaways:

1. Sales and profits are declining for the second straight year
2. Gift subscriptions and cost-cutting are bright spots
3. Competition and climate risks threaten future growth
4. No dividend safety net – pure stock speculation