Q4 2024 1-800-FLOWERS.COM Inc Earnings Call

August 29, 2024

[music].

Good morning, and welcome to the one 800 flowers dotcom fiscal 2020 for fourth quarter and year end earnings call.

Unknown Executive: Good morning, and welcome to the 1-800-Flowers.com fiscal 2024, 4th quarter, and year-end earnings call. All participants will be in a listen-only mode.

Speaker Change: All participants will be in a listen only mode.

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Unknown Executive: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on your touch-tone phone. To withdraw your question, please press star, then two.

Speaker Change: After todays presentation, there will be an opportunity to ask questions.

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Speaker Change: Please note this event is being recorded.

Unknown Executive: Please note, this event is being recorded.

Andy Milevoj: I would now like to turn the conference over to Andy Milevoj, Senior Vice President, Investor Relations. Please go ahead.

Speaker Change: I would now like to turn the conference over to Andy email Boy Senior Vice President Investor Relations. Please go ahead.

Jim McCann: Good morning, and welcome to our fiscal 2024, 4-quarter, and year-end earnings call.

Speaker Change: Good morning, and welcome to our fiscal 2020 for fourth quarter and year end earnings call.

Andy Milevoj: Joining us today are Jim McCann, Chairman and CEO; Tom Hartnett, President; Bill Shea, Chief Financial Officer; and James Langrock, Chief Administrative Officer. Before we begin, I'd like to remind you that some of the statements we make on today's call are covered by the Safe Harbor Disclaimer, contained in our press release and public documents. During this call, we will make forward-looking statements with predictions, projections, and other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission.

Speaker Change: Joining us today are Jim Mccann, Chairman and CEO, Tom Hartnett President.

Speaker Change: Bill Shea Chief Financial Officer, and James Land, Brock Chief administrative officer.

Speaker Change: Before we begin I would like to remind you that some of the statements. We make on today's call are covered by the safe Harbor disclaimer contained in our press release and public documents.

Speaker Change: During this call we will make forward looking statements with predictions projections and other statements about future events.

Speaker Change: These statements are based on current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission.

Andy Milevoj: The company disclaims any obligation to update any of the forward-looking statements that may be made or discussed during this call. Additionally, we will discuss certain supplemental financial measures that were not prepared in accordance with GAAP.

Speaker Change: The company disclaims any obligation to update any of the forward looking statements that may be made or discussed during this call.

Additionally, we will discuss certain supplemental financial measures that were not prepared in accordance with GAAP.

Andy Milevoj: Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in the tables of our earnings release.

Speaker Change: Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in the tables of our earnings release.

Jim McCann: And now, I'll turn the call over to Jim. Thanks, Andy. Good morning, everyone. Thanks for joining us.

Speaker Change: And now I'll turn the call over to Jim.

Jim McCann: Thanks, Andy and good morning, everyone. Thanks for joining us.

Jim McCann: Before we dive into our review, I wanted to begin with this morning's announcement that Bill Shae has confirmed his plans to retire this December. First and foremost, I'd like to congratulate Bill on his upcoming retirement and to thank him for his three decades of tireless commitment to our company. Bill has been a terrific partner to me and a tremendous asset to our company during a period of incredible growth and transformation. Bill was instrumental in overseeing up financial operations, fostering great relationships with our lending partners, and maintaining a strong balance sheet. During Bill's tenure, our company grew from a multi-channel floral retailer with approximately 150 million revenue to a technology platform for thoughtful gifting, comprised of an all-star roster of grants with over $1.8 billion in revenue.

Speaker Change: Before we dive into our review I wanted to begin with this morning's announcement that Bill Shea has confirmed his plans to retire this December 1st and foremost I'd like to congratulate bill on this upcoming retirement and thank him for his three decades of tireless commitment to our company.

Speaker Change: Bill has been a terrific partner to me and a tremendous asset to our company during a period of incredible growth and transformation.

Speaker Change: Bill was instrumental in overseeing our financial operations fostering great relationships with our lending partners and maintaining a strong balance sheet.

Speaker Change: During Bill's tenure, our company group from a multichannel floral retailer with approximately $150 million revenue to a technology platform with local gifting comprised of an all star Ross store brands with over $1 8 billion.

Jim McCann: Bill, thank you for the role that you've done for 1804flowers.com.

Speaker Change: Bill. Thank you for all you've done for one 800 flowers dot com.

Jim McCann: We wish you all the best on your retirement and hope your retirement is filled with joyous times with your family and friends.

Speaker Change: We wish you all the best on your retirement and hope Youll retirement is filled with joy as times with your family and friends.

Jim McCann: I also wanted to take this opportunity to introduce James Langrock, who joined our company as Chief Administrative Officer early this year and will become our CEO upon Bill's retirement. James came to us with tremendous industry and financial background, having been CEO of other public companies and both in the food and technology industry. We're glad to have James on board to help lead the next chapter of our company's growth. James will get to know many of you in the days ahead.

I also wanted to take this opportunity to introduce James Lime Rock, who joined our company as Chief administrative officer earlier, this year and will become our CFO upon Bill's retirement.

Speaker Change: James came to us with tremendous industry and financial background, having been CFO of other public companies involved both in the food and technology industries.

Speaker Change: We're glad to have James onboard to help lead the next chapter of our company's growth.

Speaker Change: James will get to know many of you in the days ahead.

Jim McCann: And now let's turn to our performance. As we turn our sights on the fiscal year ahead, we think it's important to begin by reflecting on our performance and execution against our strategic initiatives over the past year and how it sets the state of fiscal 25 and beyond. This includes a macro consumer environment that's been, that we've been navigating, the resilience that we've demonstrated in our results, and how we've positioned ourselves for the future. Top line challenges for fiscal 24 certainly persisted or given anticipated during this year. If we would rewind the clock back 12 months, broader conversations were focused on how many rate cuts we'd have to at least see throughout fiscal 24.

Speaker Change: Now, let's turn to our performance.

Speaker Change: As we turn our sights on the fiscal year ahead, we think it's important to begin by reflecting on our performance and execution against our strategic initiatives over the past year and how it sets the stage for fiscal 'twenty five and beyond.

Speaker Change: This includes a macro consumer environment, that's been that we've been navigating the.

Speaker Change: The resilience that we've demonstrated in our results and how we positioned ourselves for the future.

Speaker Change: Topline challenges for fiscal 2004, certainly persisted longer than anticipated during this year.

Speaker Change: Yeah.

If we rewind the clock back 12 months broader conversations we're focused on how many rate cuts. We've had we see throughout fiscal 'twenty four instead crystal weighted to the first rate cut and.

Jim McCann: Instead, who's still waiting for the first rate cut, and we experienced a macro environment that remained challenging for many, especially lower-income households, who were the most impacted by the higher interest rates and persistent inflation. While our revenues declined in the face of those macro conditions, our growth margin was a real story in fiscal 24, having rebounded significantly. This is a testament to our focus on cost monitoring and operational efficiencies, combined with a reversion to the mean of certain commodity cost. Our ability to adapt quickly to changing more conditions has been crucial in this regard. As a result, our year-obey at EBITDAQ rooted $93 million. As we look to the future, we remain optimistic.

Speaker Change: And we experienced the macro environment that remained challenging for many especially lower income households, who are the most impacted by the higher interest rates and persistent inflation.

Speaker Change: While our revenues declined in the face of those macro conditions. Our gross margin was the real story in fiscal 'twenty for <unk>.

Speaker Change: Rebounded significantly.

Speaker Change: This is a testament to our focus on cost management and operational efficiencies.

Speaker Change: Lined with a reversion to the mean of certain commodity cost.

Speaker Change: Our ability to adapt quickly to changing market conditions has been crucial in this regard.

Speaker Change: As a result, our year over year EBITDA grew to $93 million.

Speaker Change: As we look to the future we remain optimistic our gross margin recovery is well underway and our efforts to operate more efficiently are now evergreen.

Jim McCann: Our growth margin recovery is well under way, and our efforts to operate more efficiently are now evergreen.

Jim McCann: We've also been investing in our business, and this morning you'll hear how we plan to harvest these investments in fiscal 2025 to improve our top-line trends. While acknowledging a consumer discretionary spending environment that remains challenging, we believe that our strategic investments in key areas differentiate us and will increase frequency and retention as customers come to us as the gifting destination of choice. We have committed to driving long-term growth, pursuing innovation, and enhancing shareholder value.

Speaker Change: We've also been investing in our business and this morning, you will hear how we plan to harvest. These investments in fiscal 2025 to improve our top line trends.

Unknown Executive: Good morning, and welcome to the 1-800-Flowers. Com fiscal 2024, 4-quarter, and year-end earnings call. All participants will be in a listen only mode. Did you need assistance? Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on your touch tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded.

Speaker Change: While acknowledging a consumer discretionary spending environment that remains challenging we believe that our strategic investments in key areas differentiate us and will increase frequency and retention as customers come to us as the gifting destination of choice.

Speaker Change: We are committed to driving long term growth pursuing innovation and enhancing shareholder value.

Tom Hartnett: And now I'll turn a call over to Tom for a business update to discuss some of the opportunities that we're focused on to improve our revenue trends in fiscal 25 and drive our longer-term value creation. Thanks, Jeremy. Good morning, everyone. Today, I'll provide an update on our business performance as well as an update on our relationship innovation developments, which encompasses new or enhanced product offerings or merchandising efforts, as well as our user interface enhancements. Through these initiatives, we continuously evaluate our offerings, pricing, and bundling opportunities to ensure we have appropriate price points for each of our customer segments, and that we are actively managing the pricing elasticity of our product portfolio.

Speaker Change: And now I will turn the call over to Tom for a business update to discuss some of the opportunities that we're focused on to improve our revenue trends in fiscal 'twenty, five and drive our longer term value creation.

Tom Hartnett: Thanks, Jim and good morning, everyone today, I'll provide an update on our business performance as well as an update on our relationship innovation developments, which encompasses new or enhanced product offerings, our merchandising efforts as well as our user interface enhancements.

Andy Milevoj: I would now like to turn the conference over to Andy Milevoj, Senior Vice President, Investor Relations. Please go ahead. Good morning, and welcome to our fiscal 2024, 4-quarter, and year-end earnings call. Joining us today are Jim McCann, Chairman and CEO, Tom Hartnett, President, Bill Shea, Chief Financial Officer, and James Langrock, Chief Administrative Officer. Before we begin, I'd like to remind you that some of the statements we make on today's call are covered by the Safe Harbor Disclaimer, contained in our press release and public documents.

Tom Hartnett: Through these initiatives, we continuously evaluate our offerings pricing and bundling opportunities to ensure we have appropriate price points for each of our customer segments. And then we are actively managing the pricing elasticity of our product portfolio.

Tom Hartnett: Turning to our performance. Having until fiscal 2024, we anticipated that the broader macro environment would improve as a year progressed, in turn improving our top-line trends. Additionally, we anticipated a sizeable improvement or growth margin. While our expectations for top-line improvement have not occurred as quickly as we had anticipated, our growth margin recovery, on the other hand, occurred at a faster pace than initially expected. Our gross margin recovery benefited from our efforts to operate more efficiently, combined with the decline of certain commodity costs. As a result, we're able to grow adjusted EBITDA to $93.1 million, despite the decline in revenues.

Tom Hartnett: Turning to our performance heading into fiscal 2024, we anticipated that the broader macro environment will improve as the year progressed in turn improving our topline trends.

Andy Milevoj: During this call, we will make forward-looking statements with predictions, projections, and other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission. The company disclaims any obligation to update any of the forward-looking statements that may be made or discussed during this call. Additionally, we will discuss certain supplemental financial measures that were not prepared in accordance with GAP. Reconciliation of these non-GAP financial measures to the most directly comparable GAP measures can be found in the tables of our earnings release.

Tom Hartnett: Additionally, we anticipated a sizeable improvement our gross margin.

While our expectations for top line improvement has not occurred as quickly as we had anticipated our gross margin recovery on the other hand occurred at a faster pace than initially expected.

Tom Hartnett: Our gross margin recovery benefited from our efforts to operate more efficiently combined with the decline of certain commodity costs.

Tom Hartnett: As a result, we're able to grow adjusted EBITDA to $93 $1 million. Despite the decline in revenues.

Jim McCann: And now, I'll turn the call over to Jim. Thanks, Andy.

Tom Hartnett: In fiscal 24, we had over 10 million customers and approximately 1.1 million Celebrations Passport members. By focusing on the frequency and retention of our existing customer base, sales from existing customers represented 74% of our revenue in fiscal 2024. We'll continue to believe there is tremendous opportunity in increasing the lifetime value of our existing customer base by converting them into multi-brand customers. Multi-brand customers currently represent approximately 13% of our customer base, yet they account for approximately 28% of our revenue.

Tom Hartnett: In fiscal 'twenty, four we had over 10 million customers and approximately $1 1 million celebrations passport members.

Jim McCann: Good morning, everyone. Thanks for joining us.

Tom Hartnett: By focusing on the frequency and retention of our existing customer base sales from existing customers represented 74% of our revenue in fiscal 2024.

Tom Hartnett: We will continue to believe there is tremendous opportunity and increasing the lifetime value of our existing customer base by converting them into multi brand customers.

Multi brand customers currently represents approximately 13% of our customer base, yet they account for approximately 28% of our revenue.

Jim McCann: During Bill's tenure, our company grew from a multi-channel floral retailer with approximately 150 million revenue to a technology platform for thoughtful, gifting, comprised of an all-star roster of grants with over $1.8 billion in revenue. Bill, thank you for the role that you've done for 1804flowers.com.

Tom Hartnett: As we discussed in some detail over the past year, we saw a sizable stratification between our lower and higher income consumers. With our lower income consumers being more affected by higher interest rates, higher credit card debt, and persistent inflation. In response, we've been leaning into our pricing elasticity efforts to ensure we have gifts for customers throughout the income spectrum. Beyond pricing, we're focused on expanding our product portfolio, both organically through the launch of adjacent products, such as introducing Wolframins, New York bagels, and Cheryl's ice cream, as well as through acquisitions, such as the Carl acquisition that further propelled us into the greeting card category.

Speaker Change: As we discussed in some detail over the past year, we saw a sizeable stratification between our lower and higher income consumers with a lower income consumers being more affected by higher interest rates higher credit card debt and persistent inflation.

Speaker Change: In response, we've been leaning into our pricing elasticity efforts to ensure we have gifts for customers throughout the income spectrum.

Jim McCann: We wish you all the best on your retirement and hope your retirement is filled with joyous times with your family and friends.

Speaker Change: Beyond pricing, we're focused on expanding our product portfolio, both organically through the launch of adjacent products such as introducing Wolf remains New York Bagels and shareholders ice cream as well as through acquisitions, such as the <unk> acquisition that further propelled us into the greeting card category.

Jim McCann: I also wanted to take this opportunity to introduce James Langrock, who joined our company as chief administrative officer early this year and will become our CEO of our Bill's retirement. James came to us with tremendous industry and financial background, having been CEO of other public companies and both in the food and technology industry. We're glad to have James on board to help lead the next chapter of our company's growth. James will get to know many of you in the days ahead.

Tom Hartnett: We now have a thoughtful and personalized greeting card melt through someone through our platform for essentially the same prices buying the greeting card at a convenient store.

Speaker Change: We now have a thoughtful and personalized greeting card mailed through someone through our platform for essentially the same prices buying a greeting card at a convenience store.

Tom Hartnett: As we turn to fiscal 2025, we expect our top-line trends to benefit from our relationship innovation efforts and the acquisitions that we have made over the last couple of years that have expanded and enhanced our platform. As an example, we believe there is an opportunity to grow our corporate gifting business through our Smart Gift initiative. Although the consumer environment remains complex and dynamic, we believe we can leverage these investments, which, when combined with marketing investments, can contribute to an improvement in our top-line trends. Additionally, we expect our wholesale revenue to grow based on the orders our partners have placed for the upcoming holiday season.

Speaker Change: As we turn to fiscal 2025, we expect our top line trends to benefit from our relationship innovation efforts and the acquisitions that we have made over the last couple of years that have expanded and enhanced our platform.

Speaker Change: As an example, we believe there is an opportunity to grow our corporate gifting business through our smart gift initiative.

Speaker Change: Yeah.

Although the consumer environment remains complex and dynamic we believe we can leverage these investments, which when combined with marketing investments can contribute to an improvement in our topline trends.

Jim McCann: Top line challenges for fiscal 24 certainly persisted or given anticipated during this year. If we would rewind the clock back 12 months, broader conversations were focused on how many rate cuts we'd have to at least see throughout fiscal 24. Instead, who's still waiting for the first rate cut, and we experienced a macro environment that remained challenging for many, especially lower income households, who were the most impacted by the higher interest rates and persistent inflation.

Additionally, we expect our wholesale revenue to grow based on the orders are part is a place for the upcoming holiday season.

Tom Hartnett: Let's take a moment to discuss some of the revenue driving initiatives in more detail. As I mentioned earlier, in fiscal 2024, we experienced a bifurcation of our customer file by income level. In response, we further examined our pricing elasticity efforts and broadened our price points to ensure we are satisfied customers' gifting needs. For our customers who are more price sensitive, we are providing more value offerings. The great example of this is our bouquet of the month offering. This new offering features a bouquet of flowers for the all-in price of $50, which is inclusive of our gifting fees.

Speaker Change: Let's take a moment to discuss some of the revenue driving initiatives in more detail.

Speaker Change: As I mentioned earlier in fiscal 2024, we experienced a bifurcation of our customer file.

Speaker Change: Income level.

Jim McCann: While our revenues declined in the face of those macro conditions, our growth margin was a real story in fiscal 24, having rebounded significantly. This is a testament to our focus on cost monitoring and operational efficiencies, combined with a reversion to the mean of certain commodity cost. Our ability to adapt quickly to changing more conditions has been crucial in this regard. As a result, our year-obey at EBITDAQ rooted $93 million, as we look to the future, we remain optimistic.

Speaker Change: In response, we further examined our pricing Leicester city efforts and broadened our price points to ensure we are satisfying our customers gifting needs.

Speaker Change: For our customers, who are more price sensitive, we're providing more value offerings.

Speaker Change: A great example of this is our bouquet of the month offering.

This new offering features a bouquet of flowers, but all in price of $50.

Speaker Change: Which is inclusive of our shipping fees.

Tom Hartnett: This program enables us not only to provide great value for our customers, but also provide the new way for us to partner with our farmers and provide more value to them by further leveraging our supply chain. On the other end of the income spectrum, we will continue to lean into higher value bundles and some of our higher end brands. Since acquiring Things Remembered, we successfully integrated the brand onto our platform and have been building out its product portfolio, which appeals to a more affluent customer. With that in place, we plan to accelerate the sales growth that we experience in tax position.

Speaker Change: This program enables us not only to provide great value for our customers, but also provides a new way for us to partner with our farmers and provide more value to them by further leveraging our supply chain.

Jim McCann: Our growth margin recovery is well under way, and our efforts to operate more efficiently are now evergreen. We've also been investing in our business, and this morning you'll hear how we plan to harvest these investments in fiscal 2025 to improve our top-line trends. While acknowledging a consumer discretionary spending environment that remains challenging, we believe that our strategic investments in key areas differentiate us and will increase frequency and retention as customers come to us as the gifting destination of choice. We have committed to driving long-term growth, pursuing innovation, and enhancing shareholder value.

Speaker Change: On the other end of the income spectrum, we will continue to lean into higher value bundles and some of our higher end brands.

Speaker Change: Since acquiring things remembered we successfully integrated the brand onto our platform and have been building out the product portfolio, which appeals to a more affluent customer.

Speaker Change: With that in place we plan to accelerate the sales growth that we've experienced since acquisition.

Tom Hartnett: To further enhance our product portfolio in July, we acquired Shoffenberger, a producer of high-end, extraordinary chocolates. This is another great tuck-in acquisition for us. We plan to grow a Shoffenberger by introducing their legendary brand, which is well known to chocolateeers, to our customers by including their chocolate and our gift assortments from our family of brands.

Speaker Change: To further enhance our product portfolio in July we acquired sharpen Burger and producer of high end extraordinary chocolates.

Speaker Change: This is another great tuck in acquisition for us.

Speaker Change: We plan to grow scharffenberger by introducing their legendary brand, which is well known to chocolate tiers to our customers by including their chocolate.

Speaker Change: And our gift Assortments from our family of brands.

Speaker Change: Additionally, as I mentioned on our last call. We continue to lean into one of our main differentiators last mile delivery.

Tom Hartnett: Additionally, as I mentioned on our last call, we continue to lean into one of our main differentiators: Last Mile Delivery. Beyond flowers and Sherry's Berries, we will continue to expand the availability of additional products from our family of brands, such as Sheryl's Cookies and One Hundred Baskets to offer more gift options for those last minute occasions. I look forward to keeping you surprised that these in our other initiatives throughout the fiscal year.

Tom Hartnett: Through these initiatives, we continuously evaluate our offerings, pricing, and bundling opportunities to ensure we have appropriate price points for each of our customer segments, and that we are actively managing the pricing elasticity of our product portfolio.

Speaker Change: Beyond flowers and cherries berries, we will continue to expand the availability of additional products from our family of brands.

Such as Charlotte cookies in 100 baskets to offer more gifting options for those last minute occasions.

Tom Hartnett: Turning to our performance. Having until fiscal 2024, we anticipated that the broader macro environment would improve as a year progressed in turn improving our top-line trends. Additionally, we anticipated a sizeable improvement or growth margin. While our expectations for top-line improvement have not occurred as quickly as we had anticipated, our growth margin recovery, on the other hand, occurred at a faster pace than initially expected. Our gross margin recovery benefited from our efforts to operate more efficiently combined with the decline of certain commodity costs.

Speaker Change: I look forward to keeping you apprised of these and our other initiatives throughout the fiscal year.

Bill Shea: Now, I'll turn it over to Bill to provide the financial review. Thanks, Tom.

Speaker Change: Now I'll turn it over to bill to provide the financial review.

Bill Shea: Thanks, Tom and good morning, everyone.

Bill Shea: Good morning, everyone. The fiscal 2024 proved to be the year of our gross margin recovery. On a fiscal year basis, our gross margin increased 260 basis points, bringing us to 40.1% of fiscal 24. On the fourth quarter, our gross margin improved to 38.4%, increasing our 130 basis points as we began to lap the improvement of a year ago. We've now recovered a meaningful portion of our gross margin that has been eroded over the last few years through the supply chain challenges and higher ocean-free commodity costs and labor costs. But the job is not done. Over the next few fiscal years, we expect to return to our historical gross margin rate in the low 40% range as certain commodity costs continue to revert to their meat, and our evergreen work smarter initiatives focused on operating more efficiently continue to yield future benefits.

Bill Shea: Fiscal 2024 proved to be the year of our gross margin recovery.

Bill Shea: On a fiscal year basis, our gross margin increased 260 basis points, bringing us to 41% for fiscal 'twenty four.

Bill Shea: For the fourth quarter, our gross margin improved to 38, 4%, increasing a 130 basis points as we began to lap the improvement of a year ago.

Bill Shea: We have now recovered a meaningful portion of our gross margin that had been eroded over the last few years due to supply chain challenges and higher ocean freight commodity costs and labor costs.

Tom Hartnett: As a result, we're able to grow adjusted EBITDA to $93.1 million, despite the decline in revenues. In fiscal 24, we had over 10 million customers and approximately 1.1 million celebrations passport members. By focusing on the frequency and retention of our existing customer base, sales from existing customers represented 74% of our revenue in fiscal 2024. We'll continue to believe there is tremendous opportunity in increasing the lifetime value of our existing customer base by converting them into multi-brand customers. Multi-brand customers currently represent approximately 13% of our customer base, yet they account for approximately 28% of our revenue.

Bill Shea: But the job is not done.

Bill Shea: Over the next few fiscal years, we expect to return to our historical gross margin rate in the low 40% range as certain commodity cost continue to revert to them and our evergreen work smart initiatives focused on operating more efficiently continues to yield future benefits.

Bill Shea: Our gross margin recovery helped mitigate the dynamic consumer environment that we have been navigating throughout Fiscal 2024. As you've highlighted, we had expected the broader macro environment to become more supportive as fiscal 2024 progressed, which did not occur and had a disproportionate impact on our lower-income customers. As a result, our revenues declined 9.5% and 9.2% for the fourth quarter and fiscal year, respectable. As more price-sensitive consumers continue to pull back, our higher income customers comprise a greater portion of our revenues, and they gravitated towards our higher price items that led to a 2.9% increase in our AOV for the quarter and 2.7% for the fiscal year.

Bill Shea: Our gross margin recovery helped mitigate that dynamic consumer environment that we've been navigating throughout fiscal 2024.

Bill Shea: Jim highlighted we had expected the broader macro environment to become more supportive as fiscal 2024 progressed.

Bill Shea: Which did not occur and had a disproportionate impact.

Tom Hartnett: As we discussed in some detail over the past year, we saw a sizable stratification between our lower and higher income consumers. With our lower income consumers being more affected by higher interest rates, higher credit card debt and persistent inflation. In response, we've been leaning into our pricing elasticity efforts to ensure we have gifts for customers throughout the income spectrum. Beyond pricing, we're focused on expanding our product portfolio, both organically through the launch of adjacent products, such as introducing wolframins, New York bagels, and Cheryl's ice cream, as well as through acquisitions, such as the carl acquisition that further propelled us into the greeting card category. We now have a thoughtful and personalized greeting card melt through someone through our platform for essentially the same prices buying the greeting card at a convenient store.

Bill Shea: On our lower income customers.

Bill Shea: As a result.

Jim: We use declined nine 5% and nine 2% for the fourth quarter and fiscal year, respectively.

Jim: As more price sensitive consumers continued to pull back.

Jim: Higher income customers comprise a greater portion of our revenues and a gravitated towards our higher priced items that led to a two 9% increase in our <unk> for the quarter and two 7% for the fiscal year.

Bill Shea: As a component of our work smarter initiatives, our organization remains steadfast in managing expenses, and despite the inflationary environment we are operating within, we reduced operating expenses by 22.2 million for the fiscal year, and excluding our impairment and other non-micro engineering charges, as well as the impact of a non-qualified deferred compensation plan. As a result, our gross margin recovery and expense optimization efforts, our fiscal 24 adjusted EBITDA improved 1.9 million to 93.1 million while setting the decline in revenue. For the fourth quarter, the adjusted EBITDA loss increased by 2.2 million to 8.8 million. At loss was 20.9 million or 32 cents per share, and 6.1 million or 9 cents per share for the fourth quarter and fiscal year, respectively.

Jim: As a component of our work smaller initiatives our organization remains steadfast in managing expenses and despite the inflationary environment. We are operating within we reduced operating expenses by $22 2 million for the fiscal year.

Jim: When excluding impairment and other non recurring charges as well as the impact of our nonqualified deferred compensation plan in both periods.

Jim: As a result of our gross margin recovery and expense optimization efforts, our fiscal 'twenty four adjusted EBITDA improved $1 9 million to $93 1 million offsetting the decline in revenue.

Tom Hartnett: As we turn to fiscal 2025, we expect our top-line trends to benefit from our relationship innovation efforts and the acquisitions that we have made over the last couple of years that have expanded and enhanced our platform. As an example, we believe there is an opportunity to grow our corporate gifting business through our smart gift initiative. Although the consumer environment remains complex and dynamic, we believe we can leverage these investments, which when combined with marketing investments, can contribute to an improvement in our top-line trends. Additionally, we expect our wholesale revenue to grow based on the orders our partners have placed for the upcoming holiday season.

Jim: For the fourth quarter, the adjusted EBITDA loss increased by $2 2 million to $8 8 million.

Jim: Net loss was $20 9 million or <unk> 32 per share and.

Jim: $6 1 million or <unk> per share for the fourth quarter and fiscal year, respectively.

Bill Shea: For the quarter, the adjusted EBITDA loss was 21.8 million, or 34 cents per share, and the adjusted EBITDA income for the fiscal year was 11.6 million, or 18 cents per share.

Jim: For the quarter. The adjusted net loss was $21 8 million or 34 per share.

Jim: And the adjusted net income for the fiscal year was $11 6 million or <unk> 18 per share.

Bill Shea: Now let's review our segment results. For the fourth quarter, our gourmet food and gift basket segment revenue has declined 12.8 percent, 205.2 million. Our profit margin increased 190 points to 30 percent, benefiting from lower freight costs, the company's inventory and labor optimization efforts, as well as the decline in certain commodity costs. As a result, the segment contribution margin loss was 14.4 million compared to the loss of 13.4 million in a prior year period. For the fourth fiscal year, revenues declined 9.4 per cent to 8.74.3 million. Our profit margin increased 340 points to 38.3 per cent, once again benefiting from lower freight costs, the company's inventory and labor optimization efforts, as well as the decline in certain commodity costs.

Jim: Now, let's review our segment results.

Jim: For the fourth quarter, our gourmet food and gift baskets segment revenues declined 12, 8% to $105 2 million.

Jim: Gross profit margin increased 190 basis points to 30% benefiting from lower freight costs, the company's inventory and labor optimization efforts as well as a decline in certain commodity costs.

Jim: As a result, the segment contribution margin loss was $14 4 million compared with a loss of $13 4 million in the prior year period.

Jim: For the full fiscal year revenues declined nine 4% to $874 3 million.

Tom Hartnett: This new offering features a bouquet of flowers for the all-in-price of $50, which is inclusive of our gifting fees. This program enables us not only to provide great value for our customers, but also provide the new way for us to partner with our farmers and provide more value to them by further leveraging our supply chain. On the other end of the income spectrum, we will continue to lean into higher value bundles and some of our higher end brands.

Jim: Gross profit margin increased 340 basis points to 38, 3% once again benefiting from lower freight costs, the company's inventory and labor optimization efforts as well as the decline in certain commodity costs.

Bill Shea: The adjusted segment contribution margin increased to 85 million compared to 77.5 million in the prior year. For the fourth quarter, our consumer flaw in gift segment revenues declined 6.7 percent to 231.6 million. Our profit margin increased 20 basis points to 40.8 per cent, improving our lower fulfillment costs and our logistics optimization efforts. As a result, the segment contribution margin declined to 25.7 million compared to 30.7 million in the prior year. For the fiscal year, revenues decreased 7.7 percent to 849.8 million. Our profit margin increased 130 basis points to 40.8 per cent, benefiting from lower fulfillment costs and our logistics optimization efforts.

Jim: Adjusted segment contribution margin increased to $85 million compared with $77 5 million in the prior year.

Jim: For the fourth quarter.

Jim: <unk> E gift segment revenues declined six 7% to $231 6 million.

Tom Hartnett: Since acquiring things remembered, we successfully integrated the brand onto our platform and have been building out its product portfolio, which appeals to a more affluent customer. With that in place, we plan to accelerate the sales growth that we experience in tax position.

Jim: Gross profit margin increased 20 basis points to 48%, improving our lower film cost and our logistics optimization efforts.

Jim: As a result segment contribution margin declined to $25 7 million compared with $30 7 million in the prior year.

Tom Hartnett: To further enhance our product portfolio in July, we acquired Shoffenberger, a produce of high-end, extraordinary chocolates. This is another great tuck-in acquisition for us. We plan to grow a Shoffenberger by introducing their legendary brand, which is well known to chocolateeers to our customers by including their chocolate and our gift assortments from our family of brands.

Jim: For the fiscal year revenues decreased seven 7% to $829 8 million.

Jim: <unk> profit margin increased 130 basis points to 48% benefiting from lower fulfillment cost and all logistic optimization efforts.

Bill Shea: As a result, the segment contribution margin was 87.7 million compared with 95.5 million in the prior year.

Jim: As a result segment contribution margin was $87 7 million compared with $95 5 million in the prior year.

Tom Hartnett: Additionally, as I mentioned on our last call, we continue to lean into one of our main differentiators, Last Mile Delivery. Beyond flowers and sherry's berries, we will continue to expand the availability of additional products from our family of brands, such as Sheryl's Cookies and one hundred baskets to offer more gift options for those last minute occasions. I look forward to keeping you surprised that these in our other initiatives throughout the fiscal year.

Bill Shea: Turning to our blue net segment, revenues for the quarter and just a year were impacted for the lower order volume processed by blue net, which included an expected decline in orders by one of our business partners, following their merger with a competitor. For the fourth quarter, revenues declined 18.7 percent to 24.4 million. Our profit margin increased 7.10 basis points to 49.7 per cent, also benefiting from lower ocean freight costs as well as product mix. As a result, 7 contribution margin was 7.8 million compared to 7.4 million in the prior year period. The fiscal year revenues decreased 19.1 percent to 107.8 million.

Speaker Change: Turning to our Bloom net segment revenues for the quarter and fiscal year were impacted by the lower order volume processed by Blue net.

Speaker Change: Which included an expected decline in orders by one of our business partners following the merger with a competitor.

Speaker Change: For the fourth quarter revenues declined 18, 7% to $24 4 million.

Speaker Change: Profit margin increased 710 basis points to 49, 7% also benefiting from lower ocean freight costs as well as product mix.

Bill Shea: Now, I'll turn it over to Bill to provide the financial review. Thanks, Tom.

Speaker Change: As a result, seven contribution margin was $7 8 million compared with $7 4 million in the prior year period.

Speaker Change: The fiscal year revenues decreased 19, 1% to $107 8 million.

Bill Shea: Our profit margin increased 550 basis points to 48.2 per cent, primarily reflecting lower volume, lower margin orders, lower ocean freight costs, as well as product. with 33.8 million compared to 37.2 million in the prior year, turning to a balance rate at fiscal year end. Our cash and investment position was 159.4 million compared to 126.8 million a year ago. The inventory declined to 176.6 million compared with the inventory of 191.3 million at the end of last fiscal year. In terms of debt, we had 190 million in term debt and no borrowings under our revolving credit facility.

Speaker Change: Gross profit margin increased 550 basis points to 48, 2%, primarily reflecting lower volume of lower margin quarters, lower ocean freight costs as well as product mix.

Speaker Change: Adjusted segment contribution margin was $33 8 million compared with $37 2 million in the prior year.

Speaker Change: Turning to our balance sheet at fiscal year end.

Speaker Change: Our cash and investment position was $159 4 million compared with $126 8 million a year ago.

Bill Shea: Over the next few fiscal years, we expect to return to our historical gross margin rate in the low 40% range as certain commodity costs continue to revert to their meat, and our evergreen work smarter initiatives focused on operating more efficiently continues to yield future benefits. Our gross margin recovery helped mitigate the dynamic consumer environment that we have been navigating throughout fiscal 2024. As you've highlighted, we had expected the broader macro environment to become more supportive as fiscal 2024 progressed, which did not occur and had a disproportionate impact on our lower income customers.

Speaker Change: Inventory declined to $176 6 million compared with inventory of $191 3 million at the end of last fiscal year.

Speaker Change: And in terms of debt, we had $190 million in term debt and no borrowings under our revolving credit facility.

Bill Shea: As a result, on net debt was 30.6 million compared with 73.2 million at the end of last year.

Speaker Change: As a result.

Speaker Change: Our net debt was $30 6 million compared with $73 2 million at the end of last year.

Speaker Change: Yeah.

Bill Shea: Now let's turn to our fiscal 25 guidance. Over the last few years, our company has made investments to significantly expand our offerings and improve the customer experience to organic growth and acquisitions. In fiscal 25, we expect our top-line trends to benefit from these investments that have expanded and enhanced our platform. While it's difficult to predict when consumers will increase their discretionary spending, we plan to leverage our pricing elasticity to ensure we have gifts to serve each of our customer segments. Additionally, our wholesale business is expected to rebound as our partners have already placed and increased their gift basket holiday season orders as compared to fiscal 2024.

Speaker Change: Now, let's turn to our fiscal 'twenty five guidance.

Speaker Change: Over the last few years, our company has made investments to significantly expand our offerings and improve the customer experience through organic growth and acquisitions.

Bill Shea: As a result, our revenues declined 9.5% and 9.2% for the fourth quarter and fiscal year respectable. As more price-sensitive consumers continue to pull back, our higher income customers comprise a greater portion of our revenues, and they gravitated towards our higher price items that led to a 2.9% increase in our AOV for the quarter and 2.7% for the fiscal year. As a component of our work smarter initiatives, our organization remains steadfast in managing expenses, and despite the inflationary environment we are operating within, we reduced operating expenses by 22.2 million for the fiscal year, and excluding our impairment and other non-micro engineering charges, as well as the impact of a non-qualified deferred compensation plan As a result, our gross margin recovery and expense optimization efforts, our fiscal 24 adjusted EBITDA, improved 1.9 million to 93.1 million while setting the decline in revenue. For the fourth quarter, the adjusted EBITDA loss increased by 2.2 million to 8.8 million.

Speaker Change: Fiscal 'twenty five we expect our top line trends to benefit from these investments that have expanded and enhanced our platform.

Speaker Change: While it's difficult to predict when consumers will increase their discretionary spending we plan to leverage our pricing elasticity to ensure we have gifts to serve each of our customer segments.

Speaker Change: Additionally, ill.

Speaker Change: Wholesale business is expected to rebound as our partners have already placed and increase that gift basket holiday season orders as compared to fiscal 2024.

Bill Shea: Following a significant rebound in fiscal 2024, we expect our gross margin to continue to improve, but at a slowing rate of improvement. We expect the improvement to be in the tens of basis points, which is on top of the 260 basis points improvement in fiscal 2024. This reflects the cost current we are experiencing in the commodities markets. Certain commodity prices have reverted to that mean, while others remain relatively high, including cocoa prices, which have actually increased. Additionally, we plan to increase our marketing spend to further enhance our relationship innovation investments. Lastly, our guidance assumes increased incentive compensation expense in fiscal 25 as compared to a partial bonus payout in fiscal 2024.

Speaker Change: Following a significant rebound in fiscal 2024, we expect our gross margin to continue to improve but at a slowing rate of improvement.

Speaker Change: We expect the improvement to be in the tens of basis points, which is on top of the 260 basis points improvement in fiscal 2024.

Speaker Change: This reflects the crosscurrents, we are experiencing in the commodities markets.

Speaker Change: Certain commodity prices have reverted to them or.

Speaker Change: While others remained relatively high including cocoa prices, which have actually increased.

Speaker Change: Additionally, we plan to increase our marketing spend to further enhance our relationship innovation investments.

Bill Shea: At loss was 20.9 million or 32 cents per share and 6.1 million or 9 cents per share for the fourth quarter and fiscal year respectively. For the quarter, the adjusted EBITDA loss was 21.8 million or 34 cents per share and the adjusted EBITDA income for the fiscal year was 11.6 million or 18 cents per share.

Speaker Change: Lastly, our guidance assumes increased incentive compensation expense in fiscal 'twenty, five as compared to a partial bonus payout in fiscal 'twenty four.

Bill Shea: Based on these assumptions, we expect total revenue on a percentage basis to be in the range of flat to a low single-digit decline as compared with the prior year. We expect our revenue trends to improve as the year progresses, with some minus sequential improvement into one of fiscal 25 that accelerates as the year progresses. Adjusted EBITDA is expected to be in the range of 85 to 95 million, and three cash flow will continue to be strong and expected range of 45 to 55 million.

Speaker Change: Based on these assumptions, we expect total revenue on a percentage basis to be in the range of flat to a low single digit decline as compared with the prior year.

Bill Shea: Now let's review our segment results. For the fourth quarter, our gourmet food and gift basket segment revenue is declined 12.8 per cent, 205.2 million. Our profit margin increased 190 points to 30 percent, benefiting from lower freight costs, the company's inventory and labor optimization efforts, as well as the decline in certain commodity costs.

Speaker Change: We expect our revenue trends to improve as the year progresses.

Speaker Change: With some minor sequential improvement in Q1 of fiscal 'twenty five that accelerates as the year progresses.

Speaker Change: Adjusted EBITDA is expected to be in the range of $85 to $95 million and free cash flow will continue to be strong.

Speaker Change: The expected range of $45 million to $55 million.

Bill Shea: As a result, the segment contribution margin loss was 14.4 million compared to the loss of 13.4 million in a prior year period. For the fourth fiscal year, revenues declined 9.4 per cent to 8.74.3 million. Our profit margin increased 340 points to 38.3 per cent, once again benefiting from lower freight costs, the company's inventory and labor optimization efforts, as well as the decline in certain commodity costs.

Bill Shea: Before I turn the call back to Jim for closing remarks in Q and A, and to follow up on Jim's comments early on this call, I'd like to take a moment to say thank you. To everyone at 100 Flowers for so many great years and memories. I'd also like to thank many of you who have come to know quite well over the many years that we have worked together. It's been an absolute honor to work for such a great company whose mission is to bring people together and deliver smiles.

Speaker Change: Before I turn the call back to Jim for his closing remarks, and Q&A and.

Speaker Change: And to follow up on Jim's comments earlier on this call I'd like to take a moment to say thank you.

Jim: So everyone at one 800 flowers for so many great use and memories.

Jim: I'd also like to thank many of you will have come to know quite well over the many years and we have worked together.

Jim: It's been an absolute honor to work with such a great company, whose mission is to bring people together and deliver smiles.

Bill Shea: I'd also like to take this moment to welcome James on board. James is a tremendous addition who brings a wealth of experience to 1-800-Flowers' leadership team. I'll be partnering with James over the next four months to ensure a seamless transition if he takes over the CFO role on my retirement at the end of December.

Jim: I'd also like to take this moment to welcome James on Board.

Speaker Change: James has a tremendous addition, who brings a wealth of experience to one 800 flowers leadership team.

Speaker Change: I'll be partnering with James over the next four months to ensure a seamless transition as he takes over the CFO role upon my retirement at the end of December.

Jim McCann: Now, I'll turn the call back to Jim for his closing remarks before we open it up for Q&A. Thank you, Bill, and thanks again for your great partnership over these. Several decades now.

Speaker Change: Now I will turn the call back to Jim for his closing remarks before we open it up for Q&A.

Bill Shea: As a result, the segment contribution margin declined to 25.7 million compared to 30.7 million in the prior year. For the fiscal year, revenues decreased 7.7 per cent to 849.8 million. Our profit margin increased 130 based points to 40.8 per cent, benefiting from lower fulfillment costs and our logistics optimization efforts.

Jim: Thank you Bill and thanks again for your Great partnership over these several decades now.

James Langrock: But before I turn the call over for our Q&A, I'd like to briefly ask James to take this opportunity to introduce yourself to our investor community, James. Thanks, Jim, and good morning, everyone. I'd like to start by saying how excited I am to be part of the team. I look forward to meeting many of you in the months ahead, as well as reconnecting with those whom I know from my prior roles. The entire 1-800-Flowers organization has been incredibly welcoming since my arrival. I look forward to partnering with Bill and the rest of our management team as I transition into the CFO role.

Jim: But before I turn the call over for Q&A I'd like to briefly ask James.

Jim: Take this opportunity to introduce yourself to our to our Investor community James.

James Land: Thanks, Jim and good morning, everyone.

James Land: Like to start by saying how excited I am to be part of the team.

Bill Shea: As a result, the segment contribution margin was 87.7 million compared with 95.5 million in the prior year.

James Land: I look forward to meeting many of you in the months ahead as well as reconnecting with those whom I know from my prior roles.

Bill Shea: Turning to our blue net segment, revenues for the quarter and just a year were impacted for the lower order volume processed by blue net, which included an expected decline in orders by one of our business partners, following their merger with a competitor. For the fourth quarter, revenues declined 18.7 per cent to 24.4 million. Our profit margin increased 7.10 based points to 49.7 per cent, also benefiting from lower ocean freight costs as well as product mix.

Speaker Change: The entire one 800 flowers organization has been incredibly welcoming since my arrival I look forward to partnering with bill and the rest of our management team as I transition into the CFO role.

James Langrock: Since joining this organization, I observed the growth-oriented mindset of the entire enterprise, providing our customers with a growing number of opportunities to express their sentiments and stay connected with the most important people in their lives. Over the last few months, I've been visiting our various facilities to get a much deeper appreciation of the scope of our businesses, including how we harvest peasant peaches from our own orchards, take many of our own goods, create personalized products within hours of an order being received, and pawn with thousands of flowers to help deliver smiles. Through these visits, I quickly saw how a market-leading family of brands can bond with our cutting-edge technology, positions us very well to be the gifting destination of choice for our customers, and have a continued long-term growth.

Speaker Change: Since joining this organization I observed the growth oriented mindset of the entire enterprise, providing our cautions with a growing number of opportunities to express their sentiments and stay connected with the most important people in their lives.

Speaker Change: Over the last few months I've been visiting our various facilities to get a much deeper appreciation of the scope of our businesses, including how we harvest patent peaches from our own orchards.

Bill Shea: As a result, 7 contribution margin was 7.8 million compared to 7.4 million in the prior year period. The fiscal year revenues decreased 19.1 per cent to 107.8 million.

Speaker Change: Like many of our own goods create.

Speaker Change: Create personalized products within hours of an order being received and partnered with thousands of Florida to help deliver smiles.

Bill Shea: Our profit margin increased 550 based points to 48.2 per cent, primarily reflecting lower volume, lower margin, orders, lower ocean freight costs as well as product, with 33.8 million compared to 37.2 million in the prior year, turning to a balance rate at fiscal year end.

Speaker Change: During these visits I quickly saw how our market leading family of brands combined with our cutting edge technology positions us very well to be the gifting destination of choice for our customers and for continued long term growth.

James Langrock: I look forward to keeping all of your prize on our performance and progress.

Speaker Change: I look forward to keeping all of you apprised on our performance and progress.

Bill Shea: Our cash and investment position was 159.4 million compared to 126.8 million a year ago. The inventory declined to 176.6 million compared with the inventory of 191.3 million at the end of last fiscal year. In terms of debt, we had 190 million in term debt and no borrowings under our revolving credit facility.

Jim McCann: Now back to Jim. Thanks, James. It's great to have you on board.

Jim: Now back to Jim.

Jim: Thanks, James it's great to have you on board.

Jim McCann: As we go through this transition period, Bill and James will both be on our next earnings call toward the end of October, and then James will lead the following earnings call that we host toward the end of January.

Jim: As we go through this transition period building James will both be on our next earnings call towards the end of October and then James will lead the following earnings call that we host towards the end of January.

Anthony Lebiedzinski: And with that, I'll open a call up for questions and invite the operator to give instructions now. We will now begin the question and answer session. To ask a question, you may press star and one on your touchstone phone. If you are using a speaker phone, please pick up your handsets before pressing the keys. To withdraw your question, please press star and two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Anthony Labudinski with Sedotti. Please go ahead.

Jim: And with that I'll open the call up for questions and invite the operator, please give instructions now.

Bill Shea: As a result, on net debt was 30.6 million compared with 73.2 million at the end of last year.

Speaker Change: We will now begin the question and answer session.

Speaker Change: To ask a question you May press.

Bill Shea: Now let's turn to our fiscal 25 guidance. Over the last few years, our company has made investment to significantly expand our offerings and improve the customer experience to organic growth and acquisitions. In fiscal 25, we expect our top-line trends to benefit from these investments that have expanded and enhanced our platform. While it's difficult to predict when consumers will increase their discretionary spending, we plan to leverage our pricing elasticity to ensure we have gifts to serve each of our customer segments.

Speaker Change: Star and one on your Touchtone phone.

Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.

To withdraw your question. Please press Star then two.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Anthony <unk>: The first question today comes from Anthony <unk> with Sidoti. Please go ahead.

Anthony <unk>: Hey, good morning, everyone and Bill Congratulations on your pending retirement, certainly Jordan working with you for many years.

Anthony Lebiedzinski: Good morning, everyone, and Bill. Congratulations on your pending retirement. I certainly enjoyed working with you for many years, and James look forward to working with you as well. So I guess, you know, first, you're just looking at the quarter here. So GFGB revenue, the kind of 13% was most surprising to us. And you know, Harry and David is the largest brand within that segment, which generally targets a higher-income consumer.

Bill Shea: Additionally, our wholesale business is expected to rebound as our partners have already placed and increased their gift basket holiday season orders as compared to fiscal 2024. Following a significant rebound in fiscal 2024, we expect our gross margin to continue to improve, but at a slowing rate of improvement. We expect the improvement to be in the tens of basis points, which is on top of the 260 basis points improvement in fiscal 2024.

James and I look forward to working with you as well.

Anthony <unk>: So I guess first just looking at the quarter here so.

Speaker Change: <unk> revenue decline of 13% was most surprising to us at Harry <unk>, David is the largest brand within that segment, which generally targets are higher income consumers. So you.

Jim McCann: So you guys talked about seeing weakness and lower income consumers, which is understandable, but they just wanted to, you know, you know, kind of like, you know, as you look at the different brands, maybe you could just talk more a little bit as far as where you're seeing the biggest kind of, you know, weakness and then, you know, where you think that some signs of strength. Only Anthony, thanks for your question, Mr. Jim. By the way, the best pronunciation of your last name we've ever heard. Great. I'll ask Tom to start the answer on the bill, along with contribute to it.

You guys talked about seeing weakness in lower income consumers, which is understandable, but just wanted to.

Bill Shea: This reflects the cost current we are experiencing in the commodities markets. Certain commodity prices have reverted to that mean, while others remain relatively high, including cocoa prices, which have actually increased. Additionally, we plan to increase our marketing spend to further enhance our relationship innovation investments. Lastly, our guidance assumes increased incentive compensation expense in fiscal 25 as compared to a partial bonus payout in fiscal 2024. Based on these assumptions, we expect total revenue on a percentage basis to be in the range of flat to a low single-digit decline as compared with the prior year.

Speaker Change: Yes.

Speaker Change: Kind of what.

Speaker Change: If you look at the different brands.

Speaker Change: Maybe you could you just talk more a little bit as far as where youre seeing the biggest kind of.

Speaker Change: Weakness.

Speaker Change: What are you seeing some signs of.

Speaker Change: Right.

Jim: Good morning, Anthony Thanks for your question. This is Jim by the way the best pronunciation of your last name we've ever heard.

Great.

Jim: I'll ask I'll ask Tom to withdraw the answer that they will contribute.

Tom Hartnett: I think part of it, Anthony, was just the shift in the Easter placement. So, you know, the Q3 was stronger with just the Easter placement. Don't remember that Easter was the last; the Easter itself was the first day of the fourth quarter. So all of the sales that happened in GFGB. The four Easter happened in the third quarter, so that I'll skew with some, but Tom. And I think the other part of it as we were moving into the holiday, I mean moving into the fourth quarter, we were seeing a lot of our advertising efforts not be, you know, formative in working as well as we like on the GFGB side.

Jim: Yes.

Speaker Change: Part of it Anthony was just the shift in the Easter placement so.

Bill Shea: We expect our revenue trends to improve as the year progresses, with some minus sequential improvement into one of fiscal 25 that accelerates as the year progresses. Adjusted EBITDA is expected to be in the range of 85 to 95 million, and three cash flow will continue to be strong and expected range of 45 to 55 million.

Speaker Change: Q3 was was stronger with.

Speaker Change: Easter placement in.

Speaker Change: With the.

Speaker Change: Youll remember that Easter was the less.

Speaker Change: The Easter itself is the first day of the fourth quarter. So all of the sales that happened in <unk>.

What used to happen in the third quarter, so that'll that'll skew itself with time.

Speaker Change: And I think the other part of it as we were moving into the holiday moving into the fourth quarter, we were seeing.

Bill Shea: Before I turn the call back to Jim for closing remarks in Q and A, and to follow up on Jim's comments early on this call, I'd like to take a moment to say thank you. To everyone at 100 flowers for so many great years and memories. I'd also like to thank many of you who have come to know quite well over the many years that we have worked together. It's been an absolute honor to work for such a great company whose mission is to bring people together and deliver smiles.

Speaker Change: A lot of our advertising efforts not.

Speaker Change: Formative and working as well as we'd like on the on the <unk> side.

Jim McCann: And so we chose to make certain adjustments in a marketing schedule in order to focus there on the bottom line there. Anthony, I think if you take a bigger picture of where our revenue trends are, you know, pretty comfortable year over year, down about 90% both years. But if you pull out wholesale, it was wholesale. You know, we had a very good year in just proportional year to year. But wholesale was, you know, strong year in 23, a down year in 24, and then we have a bouncing back in, you know, in the upcoming, you know, 25 year.

Speaker Change: So we chose to.

Make certain adjustments in our marketing schedule in order to two <unk>.

Speaker Change: Focus there on the bottom line there.

Speaker Change: Anthony I think if you take a bigger picture of where our revenue trends are.

Bill Shea: I'd also like to take this moment to welcome James on board. James is a tremendous addition who brings a wealth of experience to 1-800-Flowers leadership team. I'll be partnering with James over the next four months to ensure a seamless transition if he takes over the CFO role on my retirement at the end of December.

Anthony <unk>: Pretty comparable year over year down about 9% both years, but if you pull out wholesale was wholesale.

We had a very good year in disproportionately yes.

Anthony <unk>: Right.

Speaker Change: But wholesale was strong year in 2003, a down year in 'twenty four and then we haven't bouncing back in.

Jim McCann: Now, I'll turn the call back to Jim for his closing remarks before we open it up for Q&A. Thank you Bill and thanks again for your great partnership over these. Several decades now.

Speaker Change: The upcoming 25 year, if you look at E comp pull out wholesale and you look at kind of just the e-commerce.

Jim McCann: If you look at e-commerce wholesale, and you look at, you know, kind of just the e-commerce trends, you know, we were down 9.8% in '23, we were down 7.5%, you know, this past year. And if you break up, and we've talked about this a lot, you've got to look at us as two different, you know, halves of the year: the first half of the year and the second half of the year. E-commerce in the first half of the year was down 7.9%; e-commerce actually overall in the second half of the year was down 6.8%. So wholesale kind of distorts them a little bit, but the e-commerce trend is actually improving in the second half of the year, you know, versus the first half of the year.

Speaker Change: <unk>.

Speaker Change: We were down nine 8% in 'twenty three we were down seven 5%. This past year and if you break up and we've talked about this a lot, but you got to look at us as two different halves of the year. The first half of the year in the second half of the year. Our e-commerce in the first half of the year was down seven 9% E Commerce actually overall in the second half of the year.

Speaker Change: Was down six 8%, so a wholesale kind of distorts the numbers.

James Langrock: The entire 1-800-Flowers organization has been incredibly welcoming since my arrival. I look forward to partnering with Bill and the rest of our management team as I transition into the CFO role. Since joining this organization, I observed the growth-oriented mindset of the entire enterprise, providing our customers with a growing number of opportunities to express their sentiments and stay connected with the most important people in their lives. Over the last few months, I've been visiting our various facilities to get a much deeper appreciation of the scope of our businesses, including how we harvest peasant peaches from our own orchards, take many of our own goods, create personalized products within hours of an order being received, and pawn with thousands of flowers to help deliver smiles.

Speaker Change: A little bit, but the e-commerce trend is actually improving in the second half of the year versus the first half of the year.

Jim McCann: Got it, all right, that's a spray help line. And just to follow up on the wholesale side, so glad to hear that you expect that component of your revenue to be up in fiscal 25. As far as timing of that, I know that can fluctuate between 1Q and 2Q.

Speaker Change: Got it alright, that's very helpful and just a follow up on the wholesale side. So glad to hear that you expect that component of your revenue to be up in fiscal 'twenty five.

Speaker Change: Far as timing of that I know that can fluctuate between <unk> and <unk>. What is your general sense as to when Youll see that pick up in revenue, whether it's going to be more <unk> or <unk> or is it too early to say for sure.

Jim McCann: What is your general census to when you'll see that pick up and revenue, whether it's going to be more 1Q or 2Q or is it too early to say for sure? Yeah, definitely be Q2. You know, there's always the timing at the end of Q1 into Q2, so it's still, and that's sometimes dictated by the big box guys, but the growth will all be in Q2. The large majority of those revenues are in Q2 anyway. So the business is, we know it's coming because we've already booked the business; it's just a question of shipping dates that they request, and that's right around the end of the first quarter.

Speaker Change: It will definitely be Q2.

Speaker Change: There's always the timing at the end of Q1 into Q2, so we're still in that sometimes dictated by the big box guys.

Speaker Change: But the growth will all be in Q and Q2. The large majority of those revenues are in Q2 anyway. So the good news is we know it's coming.

James Langrock: Through these visits, I quickly saw how a market-leading family of brands can bond with our cutting-edge technology, positions us very well to be the gifting destination of choice for our customers, and have a continued long-term growth. I look forward to keeping all of your prize on our performance and progress.

Speaker Change: We've already booked business just a question of shipping dates that they request and that's right around the end of the first quarter. So as Bill says youre going to see the improvement that we've budgeted for planned and now have all come in the second quarter.

Jim McCann: So, as Bill says, you're going to see the improvement that we budgeted, forward planned, and now have coming this up. Yes, you're okay.

Jim McCann: Now back to Jim. Thanks, James. It's great to have you on board. As we go through this transition period, Bill and James will both be on our next earnings call toward the end of October, and then James will lead the following earnings call that we host toward the end of January.

Speaker Change: Got you, Okay, and then can you just overall.

Jim McCann: And then, you know, just overall, you know, in terms of the different initiatives that you laid out, I mean, I guess, how would you rank them as far as being the most impactful for you guys? As far as how revenue will improve as the year progresses, maybe you could just kind of walk us through in prior, like, give us a census to like which of the initiatives will be the most impactful and so on? Overall, I'd say that the initiatives that we have the most promise in betting behind the most are all around our relationship information efforts.

Speaker Change: In terms of the different initiatives that you laid out I guess, how would you rank them as far as it being the most impactful for you guys.

Speaker Change: As far as how revenue will improve as the year progresses.

Unknown Executive: And with that, I'll open a call up for questions and invite the operator to give instructions now. We will now begin the question and answer session. To ask a question, you may press star and one on your touchstone phone. If you are using a speaker phone, please pick up your handsets before pressing the keys. To withdraw your question, please press star and two. At this time, we will pause momentarily to assemble our roster.

Speaker Change: Or just kind of walk us through on priority, what give us a sense as to which of the initiatives will be the most impactful and so on.

Speaker Change: But overall I would say these things.

Speaker Change: The initiatives that we have the most promise.

Speaker Change: Both are all around our relationship renovation efforts.

Jim McCann: The way that we interact with our customers, the way they interact with us. A lot of it on the direct marketing side, you know, so as the engagement efforts we have, it's the tools we're introducing throughout this fiscal year. We give them more and more sophisticated tools in terms of managing relationships in the lives. I would say primarily the improvements that we see going forward will be relationship innovation side. Of course, we're always focused, and they'll touch more on some of the operating efficiency efforts we have on work smarter initiatives. Work smarter initiatives, as we described in the opening remarks, we now consider Evergreen, and Bill will be focusing a lot of his time leading up to his retirement on really revving up our work smarter issues.

Speaker Change: We interact with our customers the way they interact with us.

Speaker Change: A lot of it on the direct marketing side, you know engagement efforts we have.

Speaker Change: We're introducing throughout this fiscal year and give them more and more sophisticated tools in terms of managing our relationships in the lifestyle.

Anthony Lebiedzinski: The first question today comes from Anthony Labudinski with Sedotti. Please go ahead.

Bill Shea: Primarily the improvements that we see going forward it'll be relationship renovation side of course, we will always focus and bill will touch more on some of the operating efficiency efforts. We have our work smarter initiatives work tomorrow initiatives as we described in the opening remarks, we now consider evergreen.

Jim McCann: Good morning, everyone, and Bill, congratulations on your pending retirement. I certainly enjoyed working with you for many years, and James look forward to working with you as well. So I guess, you know, first, you're just looking at the quarter here. So GFGB revenue, the kind of 13% was most surprising to us. And you know, Harry and David is the largest brand within that segment, which generally targets a higher income consumer. So you guys talked about seeing weakness and lower income consumers, which is understandable, but they just wanted to, you know, you know, kind of like, you know, as you look at the different brands, maybe you could just talk more a little bit as far as where you're seeing the biggest kind of, you know, weakness and then, you know, where you think that some signs of strength.

Speaker Change: And bill will be focusing a lot of his time.

Bill Shea: Leading up to his retirement.

Bill Shea: On really revving up our smaller initiatives ill touch on some of those yeah, but even with back on the revenue side just.

Jim McCann: I want to touch on some of those. But even with back, you know, on the review, so I just, you know, the pricing elasticity that we've been, you know, efforting both on the high end, but also on the value oriented on making comments in his phone remarks, you know, about the $50 kind of all in floor bundles. But we have a lot more products that, you know, to address kind of the value consumer that's, you know, that's out there that has struggled, you know, that has struggled the most. With respect to, you know, work smarter, you know, we're continuing to implement, you know, initiatives automation initiatives in our distribution centers are using AI on both the front end of the, you know, the website for, you know, to create a better customer journey.

Bill Shea: The pricing elasticity that we've been.

Bill Shea: Exiting bolt on that on the high end, but also on the value oriented Tom made some comments in his formal remarks about $50 kind of all in.

Speaker Change: Flow of bundles, but we have a lot more products to address kind of the value.

Sumer: Sumer Thats.

Speaker Change: That's out there that have struggled that has struggled the most.

Speaker Change: With respect to.

Jim McCann: Only Anthony, thanks for your question, Mr. Jim. By the way, the best pronunciation of your last name we've ever heard. Great. I'll ask Tom to start the answer on the bill along with contribute to it. I think part of it, Anthony, was just the shift in the Easter placement. So, you know, the Q3 was stronger with just the Easter placement. Don't remember that Easter was the last, the Easter itself was the first day of the fourth quarter.

Speaker Change: Work smarter, we're continuing to implement.

Speaker Change: Initiatives automation initiatives in our distribution centers are using AI on both the front end of the the website for to create a better customer journey and really on the on the backend with our customer service platform.

Jim McCann: And really on the back end with our customer service platform, you know, to reduce labor and be more efficient. But that's a, as Jim and Tom have indicated, those are kind of evergreen initiatives that will continue to generate, you know, savings for us going forward. Yeah, it's okay.

Speaker Change: We reduced labor and be more and be more efficient, but that's it.

Speaker Change: Jim and Tom have indicated those are kind of evergreen initiatives that will continue to generate.

Savings for us going forward.

Jim McCann: So all of the sales that happened in GFGB. The four Easter happened in the third quarter, so that I'll skew with some, but Tom. And I think the other part of it as we were moving into the holiday, I mean moving into the fourth quarter, we were seeing a lot of our advertising efforts not be, you know, formative in working as well as we like on the GFGB side. And so we chose to make certain adjustments in a marketing schedule in order to focus there on the bottom line there.

Speaker Change: Got you, Okay, and then lastly from me before I pass it onto other so you made a small acquisition of a high end chocolate.

Anthony Lebiedzinski: And then lastly, for me, before passing on to others, so you made a small acquisition of a high-end chocolate, the company. Can you comment as far as like, you know, how to think about the impact of that and plus also what is your appetite for additional acquisitions? Sure, Anthony, our appetite, I'll start with our appetite is kind of robust in the, and the buffet is getting nicer. What I mean is, because of the capital environment, we're in companies that have struggled to find a bottom line and don't have very close prospects of turning profitable, as you would well imagine, struggling to find capital.

Speaker Change: Anthony.

Speaker Change: Can you comment as far as like how to think about the impact of that plus also what is your appetite for additional acquisitions.

Speaker Change: Sure Anthony our appetite I'll start with our appetite is kind of robust and the buffet is getting nicer, what I mean is.

Speaker Change: Because of the capital environment were in companies that have struggled to find a bottom line and don't have very close prospects of turning profitable.

Speaker Change: As you would well imagine are struggling to find capital.

Jim McCann: That's made the inbound efforts does a quite robust of late, so I think there'll be some opportunities. I'm certain there'll be some opportunities. We always have. to manage our efforts there to see if they really do pay off for us. There's always integration risk; obviously, the capital side of things, but I think there's going to be a robust set of opportunities. What we've done in the last year and a half or so on the acquisition side is buy things that really do rev up our primary initiatives. Our work smarter initiatives and our platform, they lever our platform.

Jim McCann: Anthony, I think if you take a bigger picture of where our revenue trends are, you know, pretty comfortable year over year down about 90% both years. But if you pull out wholesale, it was wholesale, you know, we had a very good year in just proportional year to year. But wholesale was, you know, strong year in 23, a down year in 24, and then we have a bouncing back in, you know, in the upcoming, you know, 25 year.

Speaker Change: That's made.

Speaker Change: The inbound efforts to us are quite robust of late so I think there'll be some opportunities I'm certain there will be some opportunities we always have to match.

Speaker Change: Managing our our efforts there to see if they really do pay off for US is always integration risk obviously, the capital side of things, but I think theres going to be a robust set of opportunities what we've done in the last year.

Year, and a half or so on the acquisition side is buy things that really do Rev up while primary initiatives work smarter initiatives and our platform. They lever our platform. So let me turn to the when you mentioned Scharffenberger Mr. Bryan frankly, I look at 15 years ago because of its terrific brand positioning.

Jim McCann: If you look at e-commerce wholesale, and you look at, you know, kind of just the e-commerce trends, you know, we were down 9.8% in 23, we were down 7.5%, you know, this past year. And if you break up, and we've talked about this a lot, you've got to look at us as two different, you know, halves of the year, the first half of the year and the second half of the year.

Jim McCann: So let me turn to the one you mentioned, Shoffenberger. This is a brand, frankly, I looked at 15 years ago because of its terrific brand position; it's unique as its high quality product offerings. Another company beat us to the punch, share, and bought that company. Fortunately for us, it came back around. So it's very small, but everything about the story, everything about the brand, everything about its recipes, its unique product, our still intact, has great people there. And coincidentally, it's only 10 minutes away from our facilities in Medford, Oregon, where it was most recently located.

Jim McCann: E-commerce in the first half of the year was down 7.9%, e-commerce actually overall in the second half of the year was down 6.8%. So wholesale kind of distorts them a little bit, but the e-commerce trend is actually improving in the second half of the year, you know, versus the first half of the year. Got it, all right, that's a spray help line. And just to follow up on the wholesale side, so glad to hear that you expect that component of your revenue to be up in fiscal 25.

Speaker Change: Its uniqueness, it's high quality product offerings. Another another company leaders to the pump share and bought that company.

Speaker Change: <unk> for us it came back around so it's very small but.

Speaker Change: Everything about the story everything about the brand everything about its recipes as unique product are still intact has great people there and coincidentally, it's only 10 minutes away from our facilities in Medford, Oregon, where it was most recently located so very easy for us to talk to you and what do the.

Jim McCann: As far as timing of that, I know that can fluctuate between 1Q and 2Q. What is your general census to when you'll see that pick up and revenue, whether it's going to be more 1Q or 2Q or is it too early to say for sure? Yeah, definitely be Q2. You know, there's always the timing at the end of Q1 into Q2, so it's still, and that's sometimes dictated by the big box guys, but the growth will all be in Q2.

Jim McCann: So very easy for us to talk in. And what do they need? They need the things that we have, our huge customer base, our e-commerce marketing capability, what we call house media, Anthony. So what I mean by that is inexpensive marketing opportunities that we have that are already a part of what we do, including them in our email communications on our other websites, putting their products in our packaging. They're already working on where it's needed and necessary. So our gift baskets, when they need a component of a high-end chocolate product, guess who it's going to be.

Speaker Change: They need they need the things that we have.

Speaker Change: Our huge customer base, our e-commerce marketing capability, what we call House media Anthony So what I mean by that is inexpensive.

Speaker Change: Marketing opportunities that we have that are already a part of what we do including them in our.

E Mail communications on our other websites, putting their products and our packaging there were already working on where it's needed and necessary. So our gift baskets when they need a component of our high end chocolate product, yes, who is going to be so we have a number of ways of growing that brand. So we take a kernel that is a great brand great recipes.

Jim McCann: The large majority of those revenues are in Q2 anyway. So the business is, we know it's coming because we've already booked the business, it's just a question of shipping dates that they request, and that's right around the end of the first quarter. So, as Bill says, you're going to see the improvement that we budgeted forward planned and now have coming this up. Yes, you're okay.

Jim McCann: So we have a number of ways of growing their brand. So we take a kernel that is a great brand, great recipes, great history. We have; they have a good facility, but it can't handle much more volume than a couple of million dollars that they do now. We happen to have a million square foot facility down the road with state-of-the-art, very highly automated equipment that can take their very unique recipes and do a high-scale volume with no additional capital cost to us. So we have the things that they need. And in terms of scale, that was the first part of your question.

Speaker Change: Great history.

We have they have a good facility, but it can handle much more volume than the couple of million dollars of they do now we happen to have a million square foot facility down the road with state of the art very highly automated equipment that can take there theyre very unique recipes and do it in a high scale via with no additional <unk>.

Speaker Change: Capital cost to us so we have the things that they need in terms of scale that was the first part of your question.

Speaker Change: That will that will be a double or triple right out of the gate in terms of topline inconsequential.

Jim McCann: That will, that will be a double or triple right out of the gate in terms of top line, but it's inconsequential when you think about our size. But in the three to five years from now, that will become a substantial business and it be done capital efficiently with very little and marketing spend because we're able to level the things we already do. That's a perfect example of the kind of things that are coming in more frequency to us now and makes us very excited because there are low risk, great extensions for our consumer. Our existing customer base wants a product like that and we have the way with all the making growth very efficiently and grow it into a substantial business.

Jim McCann: Overall, I'd say that the initiatives that we have the most promise in a betting behind the most are all around our relationship information efforts. The way that we interact with our customers, the way they interact with us. A lot of it on the direct marketing side, you know, so as the engagement efforts we have, it's the tools we're introducing throughout this fiscal year. We give them more and more sophisticated tools in terms of managing relationships in the lives I would say primarily the improvements that we see going forward will be relationship innovation side.

Speaker Change: When you think about our size, but in the three to five years from now that will become a substantial business and it would be done capital efficiently with very little in marketing spend because we're able to leverage things. We already do that's a perfect example of the kinds of things that are coming in more frequency to us now and makes us.

Speaker Change: We're excited because our low risk great extensions for our consumer.

Speaker Change: Our existing customer base once a product like that and we have the wherewithal to make it grow very efficiently and grow into a substantial business.

Jim McCann: Of course, we're always focused and they'll touch more on some of the operating efficiency efforts we have on work smarter initiatives. Work smarter initiatives as we described in the opening remarks, we now consider Evergreen and Bill will be focusing a lot of his time leading up to his retirement on really revving up our work smarter issues. I want to touch on some of those. But even with back, you know, on the review, so I just, you know, the pricing elasticity that we've been, you know, efforting both on the on the high end, but also on the value oriented on making comments in his phone remarks, you know, about the $50 kind of all in floor bundles.

Anthony Lebiedzinski: If we don't see a path, we get a business on our platform to 50 or 100 million dollar business in a five-year time frame, we probably wouldn't spend any time on it. But I think that brand has the opportunity to grow over time to be a substantial contributor. Anthony, this year it's going to be introduced to a lot of our customers via inclusion in the gift baskets that we sell. So modest this year, but then growing has germinated. We believe substantially over the future.

Speaker Change: If we don't see a path to get our business on our platform to $50 million to $100 million business in five year timeframe.

Speaker Change: Probably wouldn't spend any time on it but I think that brand has the opportunity to grow over time to be a substantial contributor yeah. So Anthony this year, it's going to be introduced to a lot of our customers via inclusion in the gift baskets that we.

Speaker Change: We sell so kind of modest this year, but then growing as Jim indicated we believe substantially over over the future.

Anthony Lebiedzinski: Thank you very much for best of luck.

Speaker Change: Thank you very much and best of luck. Thanks, guys.

Speaker Change: Yes.

Jim McCann: But we have a lot more products that, you know, to address kind of the value consumer that's, you know, that's out there that has struggled, you know, that has struggled the most. With respect to, you know, work smarter, you know, we're continuing to implement, you know, initiatives automation initiatives in our distribution centers are using AI on both the front end of the, you know, the website for, you know, to create a better customer journey.

Michael Kupinski: The next question comes from Michael Kupinski with Mobile Capital Markets. Please go ahead. Thank you. Good morning, everyone.

Speaker Change: The next question comes from Michael Kaplinsky with Noble capital markets. Please go ahead.

Michael Kaplinsky: Thank you and good morning, everyone and Bill let me offer my congratulations on your retirement I can tell you that it's been a tremendous pleasure working with you over the years.

Michael Kupinski: And Bill, let me offer my congratulations on your retirement. I can tell you that it's been a tremendous pleasure working with you over the years. And I'm going to miss you.

Speaker Change: And I am going to Miss you.

Michael Kupinski: And I want to welcome James as well. Look forward to working with you more closely, James. A couple of questions. In terms of your guidance for 2025, consumer confidence has always been a metric that we've always looked at in terms of revenue growth. And if you look, the consumer confidence has most recently been improving. And at the same time, your revenue growth for, at least your initial guidance, was pretty positive and instructive on looking for rate decreases. And it now appears that we're going to have rate decreases, you know, a little bit more timely now.

Speaker Change: And I want to welcome James as well look forward to working with you more closely James.

Speaker Change: Couple of questions.

Jim McCann: And really on the on the back end with our customer service platform, you know, to reduce labor and be more efficient. But that's a, as Jim and Tom have indicated, those are kind of evergreen initiatives that will continue to generate, you know, savings for us going forward. Yeah, it's okay.

Speaker Change: In terms of your your guidance for 2025.

Speaker Change: Consumer confidence has always been a metric that we've always looked at in terms of revenue growth and if you look at that.

Speaker Change: Consumer confidence has most recently been improving and at the same time your revenue growth.

Speaker Change: Or at least your initial guidance was pretty positive and constructive on looking for rate decreases and it now appears that we're going to have rate.

Jim McCann: And then lastly, for me, before passing on to others, so you made a small acquisition of a high end chocolate, the company, can you comment as far as like, you know, how to think about the impact of that and plus also what is your appetite for additional acquisitions. Sure, Anthony, our appetite, I'll start with our appetite is kind of robust in the, and the buffet is getting nicer. What I mean is, because of the capital environment, we're in companies that have struggled to find a bottom line and don't have very close prospects of turning profitable, as you would well imagine, struggling to find capital.

Speaker Change: Decreases.

Speaker Change: A little bit more timely now it looks like the timetables Vince at relatively set.

Michael Kupinski: It looks like the timetables have been set relatively set. I was wondering, in terms of what gives you pause in terms of your revenue outlook for 2025, given those metrics that we've more closely watched in the past.

Speaker Change: Was wondering in terms of what gives you pause in terms of your revenue outlook for 2025.

Speaker Change: Given those metrics that more closely watched in the past.

Jim McCann: Thanks, Michael. Jim, I think the main thing that gives us pause is we were feeling pretty good until less than three weeks when we heard everybody else be so cautious about the fourth calendar quarter, our second fiscal quarter. So, just psychologically, it caused us to say, you know, should we feel as good as we do? But Bill, why don't you give Michael a little more color? Went into the recipe for our guidance? Yeah. So our guidance is really based upon all the initiatives that we've been outlining and discussing over the last year or so that we think is not coming to fruition this year.

Jim: Thanks, Michael its Jim.

Speaker Change: The main thing that gives us pause as we were feeling pretty good until the last three weeks when we heard everybody else be so cautious about.

Jim McCann: That's made the inbound efforts does a quite robust of late, so I think there'll be some opportunities. I'm certain there'll be some opportunities. We always have, to manage our efforts there to see if they really do pay off for us. There's always integration risk, obviously the capital side of things, but I think there's going to be a robust set of opportunities. What we've done in the last year and a half or so on the acquisition side is buy things that really do rev up our primary initiatives. Our work smarter initiatives and our platform, they lever our platform.

Speaker Change: The fourth calendar quarter, our second fiscal quarter, So just psychologically.

Speaker Change: It caused us to say should we feel as good as we do.

Speaker Change: And bill want to give a microwave more color what went into the future.

Bill Shea: Yet the recipe for our guidance. So our guidance is really based upon all of the initiatives that we've been outlining.

Bill Shea: In discussing over the last year or so that we think start coming to fruition.

Bill Shea: This year it is not based on an improvement in the macro economy, certainly when consumer confidence is high.

Bill Shea: It's not based on an improvement in the macro economy. Certainly, when consumer confidence is high, you know, accompanied by us that, you know, that's a discussion of your products do, you know, do better. But we have not built that into our, you know, our guidance really is based on our initiatives. Yeah. I just thought layer on there, Michael, Tom. Again, I think our focus here and what we put forth is based upon our, you know, relationship innovation efforts. It's those things that we were within our control; our category expansion, our boarding price points are increasing.

Bill Shea: Like us that that's held discretionary products to do better.

Jim McCann: So let me turn to the one you mentioned, Shoffenberger. This is a brand, frankly, I looked at 15 years ago because of its terrific brand position, it's unique as its high quality product offerings. Another company beat us to the punch share and bought that company. Fortunately for us, it came back around. So it's very small, but everything about the story, everything about the brand, everything about its recipes, its unique product, our still intact, has great people there.

Bill Shea: But we have not built that into our guidance. It really is based on our initiatives.

Bill Shea: Yes.

Michael Tom: Layer on there Michael Tom again, I think our focus here and are what we put forth is based upon our relationship innovation efforts as those things that we were within our control our category expansion are broadening price points are.

Tom Hartnett: And seeing the delivery of products, our user experience, all those things are what is giving us, you know, confidence where we're portraying and putting forth, you know, our recommendation for this forthcoming year. What we do believe, Michael, is that this is going to build as the year goes on, you know, the trend lines and, you know, we're not expecting much change in the trend lines in Q1 versus what we, you know, saw in the second half last year. But as we build towards holiday, and we always do better at holiday, and then the second half of the year, you know, we feel the trend lines will be much better.

Michael Tom: And same day delivery of products or user experience all those things are what is giving us.

Jim McCann: And coincidentally, it's only 10 minutes away from our facilities in Medford, Oregon, where it was most recently located. So very easy for us to talk in. And what do they need? They need the things that we have, our huge customer base, our e-commerce marketing capability, what we call house media Anthony. So what I mean by that is inexpensive marketing opportunities that we have that are already a part of what we do, including them in our email communications on our other websites, putting their products in our packaging, they're already working on where it's needed and necessary.

Michael Tom: Confidence in where we're training and putting forth.

Michael Tom: Our recommendation for the forthcoming year, but we do believe Michael that this is going to build as the year goes on.

Michael: The trend lines in.

Michael: We're not expecting much change in the trend lines in Q1 versus what we what we saw the second half of last year.

Michael: But as we build towards holiday and we always do better at holiday and into the second half of the year.

Michael: We feel the trend lines will be much better.

Bill Shea: Gotcha. And then regarding margins, obviously, you're expecting some improvement even though not as much as what we've had more recently. But, you know, some of the commodity prices, as you mentioned, have been kind of stubbornly high: cocoa, milk, eggs, and so forth. And I was just wondering, in terms of commodity prices, specifically, what are your thoughts in terms of how that goes into 2025. Yeah, I mean, certain commodity costs, as you mentioned, have reverted back to their mean. We corn actually eggs, even sugar has come down and reverted back to their mean. But you also mentioned cocoa. You know, cocoa is at all time highs or was at all time highs.

Michael: Got you and then.

Speaker Change: Regarding margins, obviously, you're expecting some improvement even though not as much as what we've had more recently, but.

Jim McCann: So our gift baskets, when they need a component of a high-end chocolate product, guess who it's going to be. So we have a number of ways of growing their brand. So we take a kernel that is a great brand, great recipes, great history. We have, they have a good facility, but it can't handle much more volume than a couple of million dollars that they do now. We happen to have a million square foot facility down the road with state-of-the-art very highly automated equipment that can take their very unique recipes and do a high-scale volume with no additional capital cost to us.

Speaker Change: Some of the commodity prices as you mentioned, a big tenant stubbornly high cocoa milk eggs and so forth and I was just wondering in terms of <unk>.

Speaker Change: Commodity prices, specifically what are your thoughts.

Speaker Change: In terms of.

Speaker Change: How that goes into 2025.

Speaker Change: Yes.

Speaker Change: I mean certain commodity cost as you mentioned have reverted back to the mean wheat corn actually eggs even sugar.

Speaker Change: It has come down and reverted back to the mean, but you also mentioned cocoa cocoa is at all time highs or was at all time highs we Luckily did.

Jim McCann: So we have the things that they need. And in terms of scale, that was the first part of your question. That will, that will be a double or triple right out of the gate in terms of top line, but it's inconsequential when you think about our size. But in the three to five years from now, that will become a substantial business and it be done capital efficiently with very little and marketing spend because we're able to level the things we already do.

Bill Shea: We luckily did lock in some pricing. It's an increase year over year, but we've locked in pricing for the next two holiday seasons at more modest increases. But it is an increase. You know, fuel continues to be, you know, high, you know, and you know, inbound and outbound freight continues to be, you know, costs us more year over year. The inbound freight, again, we've locked in pricing that are competitive, but the spot market is very, you know, is very high now. So it's hard if you go outside your contractual volume in a particular month, not to have increases on the inbound life.

Speaker Change: We did lock in some pricing, it's an increase year over year, but we've locked in pricing for the June Howard next two holiday seasons.

Speaker Change: At more modest modest increases, but it is an increase fuel continues to be high.

Speaker Change: Inbound and outbound freight continued to be.

Speaker Change: Cause us more year over year.

Jim McCann: That's a perfect example of the kind of things that are coming in more frequency to us now and makes us very excited because there are low risk, great extensions for our consumer, our existing customer base wants a product like that and we have the way with all the making growth very efficiently and grow it into a substantial business. If we don't see a path, we get a business on our platform to 50 or 100 million dollar business in a five-year time frame, we probably wouldn't spend any time on it.

Speaker Change: Inbound freight again with locked in.

Speaker Change: Pricing that are competitive with the spot market is.

Speaker Change: Is very high now so it's hard if you go outside your.

Speaker Change: Our contractual volumes in any particular month not to have increases on the inbound volume. So we've factored all of those items into the guidance.

Bill Shea: So we factored all those items into, you know, the guidance, you know, for margin improvement, but much more modest than we saw, you know, last year. You know, again, last year, you know, we increased 260 basis points well ahead of our original plan. So we already achieved over 40 percent, you know, gross margins. So we said it wouldn't be a linear march to return to our historical gross margins. We had a big jump last year. We'll have a small, small improvement in gross margin this year, and they'll give you the practice on the commodity impacts.

Speaker Change: For margin improvement.

Speaker Change: But much more modest than we saw last year and again last year, we increased 260 basis points well ahead of our original plan.

Speaker Change: So we have already achieved over 40% gross margin. So we said it wouldn't be a linear march to return to our historical gross margins. We had a big jump last year will have a small small or improvement in gross margin. This year and we'll give you the factors on the following.

Jim McCann: But I think that brand has the opportunity to grow overtime to be a substantial contributor. Anthony, this year it's going to be introduced to a lot of our customers via inclusion in the gift baskets that we sell. So modest this year but then growing has germinated. We believe substantially over the future.

Speaker Change: The commodity impact in addition, we're going to spend more money on marketing this year, because we think the opportunity there.

Bill Shea: In addition, we're going to spend more money on marketing this year because we think the opportunity there is to improve our overall revenue trends, and that's going to be the expense of more marketing spread.

Anthony Lebiedzinski: Thank you very much for best of luck.

Speaker Change: To improve our overall revenue trends and that's going to be at the expense of more marketing spread.

Michael Kupinski: The next question comes from Michael Kupinski with mobile capital markets. Please go ahead. Thank you. Good morning, everyone.

Michael Kupinski: Gotcha.

Gotcha.

Michael Kupinski: Those were our major questions. I appreciate it. Thank you. Thank you, Michael.

Speaker Change: My major questions I appreciate it. Thank you. Thank you Margaret.

Michael Kupinski: And Bill, let me offer my congratulations on your retirement. I can tell you that it's been a tremendous pleasure working with you over the years. And I'm going to miss you.

Alex Fuhrman: The next question comes from Alex Ferman with Craig Allen Capital Group. Please go ahead. Hey guys, thanks very much for taking my questions.

Speaker Change: The next question comes from Alex Fuhrman with Craig Hallum Capital Group. Please go ahead.

Alex Fuhrman: Hey, guys. Thanks, very much for taking my question Bill Congratulations on your retirement, it's been great getting to know you over the last decade or so.

Michael Kupinski: And I want to welcome James as well. Look forward to working with you more closely, James.

Alex Fuhrman: Bill, congratulations on your retirement. It's been great getting to know you over the last decade or so. Wanted to ask you guys, what have you been seeing in terms of customer acquisition cost? Obviously, there's been a lot going on this year with the Olympics and now the election. Curious if you think there might be an opportunity to accelerate efforts to go after new customers after the election. I think that's very much the case. We've been looking historically. We've been at this for a long time. Elections, especially when they're very contentious, and I can't remember the last one that wasn't, are distractions.

Michael Kupinski: A couple of questions. In terms of your guidance for 2025, consumer confidence has always been a metric that we've always looked at in terms of revenue growth. And if you look at the consumer confidence has most recently been improving. And at the same time, your revenue growth for, at least your initial guidance was pretty positive and instructive on looking for rate decreases. And it now appears that we're going to have rate decreases, you know, a little bit more timely now. It looks like the timetables have been set relatively set.

I wanted to ask you guide what have you been seeing in terms of customer acquisition costs.

Speaker Change: There's been a lot going on this year with the Olympics and now the election curious if you think there might be an opportunity to accelerate efforts to go after new customers after the election.

Speaker Change: I think thats very much the case looking historically, we've been at this for a long time elections, especially when they're very competitors or I can't remember the last one that wasn't.

Speaker Change: Our distraction.

Jim McCann: They're a distraction from a public attention point of view, and there's so much money pouring into the markets to buy media space in radio, TV, and sort of in every online media. So we're not expecting much of a change in our trend lines before the election, but we do think there's a significant opportunity post-election for us to step into the market more meaningfully. Overall, I think, as we said, our market expenses budget is to be up this year, and we think there's real good reason and real opportunity there. We continue to gain market share in our core businesses, and I think the cost of acquisition of customers is one of the reasons for that, because it is starkly high and likely to stay.

Speaker Change: They are a distraction from our public attention point of view it as so much money pouring into the markets to buy media space.

Jim McCann: I was wondering in terms of what gives you pause in terms of your revenue outlook for 2025, given those metrics that we've more closely watched in the past. Thanks, Michael. Jim, I think the main thing that gives us pause is we were feeling pretty good until less three weeks when we heard everybody else be so cautious about the fourth calendar quarter, our second fiscal quarter. So just psychologically, it caused us to say, you know, should we feel as good as we do?

Speaker Change: Radio television certainly in every online media. So we're not expecting much of a change in our trend lines before the election, but we do think there's a significant opportunity post election for us too.

Speaker Change: Go to market more meaningfully.

Speaker Change: The overall overall I think.

Speaker Change: We said our marketing spend is budgeted to be up this year and we think there is real good reason a real opportunity there we continue to gain market share in our core businesses.

Jim McCann: But Bill, why don't you give Michael a little more color went into the recipe for our guidance? Yeah. So our guidance is really based upon all the initiatives that we've been outlining and discussing over the last year or so that we think is not coming to fruition this year. It's not based on an improvement in the macro economy. Certainly when consumer confidence is high, you know, accompanied by us that, you know, that's a discussion of your products do, you know, do better.

Speaker Change: And I think the cost of acquisition of customers is one of the reasons for that because it is a historically high and likely to stay there.

Jim McCann: Yeah. Okay.

Speaker Change: Okay, that's really helpful.

Jim McCann: That's really helpful. Yeah. We see, Alex, you see it moderating, but it will be universally moderating. We, I mean, obviously we have a tremendous amount of lines in the water all the time, and we're measuring each one of those activities that we have a pretty good idea what our playbook is going to be, you know, post-election here. That's really helpful.

Speaker Change: I also see it.

Speaker Change: Moderating, but it won't be universally moderating we I mean.

Speaker Change: Obviously, we have a tremendous amount of lines in the water all the time and we're measuring each one of those activities that we have.

Speaker Change: A pretty good idea, what our playbook is going to be.

Jim McCann: But we have not built that into our, you know, our guidance really is based on our initiatives. Yeah. I just thought layer on there, Michael, Tom. Again, I think our focus here and what we put forth is based upon our, you know, relationship innovation efforts. It's those things that we were within our control, our category expansion, our boarding price points are increasing. And seeing the delivery of products, our user experience, all those things are what is giving us, you know, confidence where we're portraying and putting forth, you know, our recommendation for this forthcoming year.

Speaker Change: Post election here.

Speaker Change #100: That's really helpful. Thank you both.

Doug Lane: Thank you both. Next question comes from Doug Lane with Water Tower Research. Please go ahead. Yes, all right.

Speaker Change #100: The next question comes from Doug Lane with water Tower Research. Please go ahead.

Doug Lane: Yes, hi, good morning, everybody and congratulations bill on your retirement.

Doug Lane: Good morning, everybody, and congratulations, Bill, on retirement. Just want to build down on guidance here a little bit. The whole cell orders are encouraging for the December quarter. It's important for that quarter. And you mentioned the first quarter. The September quarter is likely to be sort of continuing the trend of the second half of the last fiscal year. So that implies we'll see hopefully positive signs in front of some sales numbers in the last three quarters of this fiscal year. Do you think it could be as soon as the December quarter? Yes, we thought we expect that the trend lines will start improve in the second quarter.

Doug Lane: Just wanted to drill down on guidance here a little bit.

Speaker Change #102: The wholesale orders are encouraging for the December quarter, it's important for that quarter and you mentioned in the first quarter. The September quarter is likely to be sort of continuing.

Speaker Change #103: Trends in the second half of the last fiscal year. So that implies we will see hopefully positive signs in front of some sales numbers in.

Jim McCann: What we do believe, Michael, that this is going to build as the year goes on, you know, the trend lines and, you know, we're not expecting much change in the trend lines in Q1 versus what we, you know, what we saw the second half last year. But as we build towards holiday and we always do better at holiday and then the second half of the year, you know, we feel the trend lines will be much better.

Speaker Change #104: The last three quarters of this fiscal year do you think it could be as soon as the December quarter.

Yes, we thought we.

Speaker Change #105: We expect that the trend lines will improve.

Speaker Change #106: Improve in the second quarter, yes.

Bill Shea: Yes. I mean, I actually have positive sales growth, or is that more the back half phenomenon? Yeah, we don't really break it down. You know, I think it could be a meaningful improvement in the trend. Okay, when I've ready to declare victory yet, though. No, no, I get it. It's still a very uncertain environment out there. And also in the margins. I think was asked earlier about commodity costs, and certainly in the June quarter, the margins in the gourmet food and gift baskets were the one what I was expecting. I just wondered how much of that was because the sales were lower than expected or how much of that is because of some sort of a rise in the input cost front that you were unexpected that you were not expecting.

Speaker Change #107: Actually they have positive sales growth or is that more of a back half phenomenon.

Bill Shea: Gotcha. And then regarding margins, obviously, you're, you're expecting some improvement even though not as much as what we've had more recently, but, you know, some of the commodity prices, as you mentioned, have been kind of stubbornly high cocoa, milk, eggs, and so forth. And I was just wondering in terms of commodity prices, specifically, what are your thoughts in terms of how that goes into 2025. Yeah, I mean, certain commodity costs, as you mentioned, have reverted back to their mean.

Bill Shea: We corn actually eggs, even sugar has come down and reverted back to their mean. But you also mentioned cocoa, you know, cocoa is at all time highs or was at all time highs. We luckily did lock in some pricing. It's an increase year over year, but we've locked in pricing for the next two holiday seasons at more modest increases, but it is an increase. You know, fuel continues to be, you know, high, you know, and you know, inbound and outbound freight continues to be, you know, costs us more year over year.

Speaker Change #107: Yes, we don't really break it down.

It could be a meaningful improvement in the trend.

Speaker Change #109: Okay, we're not ready to declare victory yet though.

Speaker Change #110: No no I get it it's still a very uncertain environment out there.

Speaker Change #110: And also on the margins.

Speaker Change #111: I think it was asked earlier about commodity costs certainly in the June quarter, the margins in the gourmet food and gift baskets were below what I was expecting I just wondered how much of that was because the sales were lower than expected or how much of that is because of some sort of a rise in the key input cost front that you are unexpected that you were not expecting.

Bill Shea: Yeah, well, again, I would say, you know, margins came in where we were expecting it. You know, the top line was, you know, was softer than we hoped for. But margins, you know, you know, for the year came in very nicely. We're copying against, you know, in the fourth quarter already nicely improved margins a year ago in the fourth, you know, in the fourth quarter. So the moderation of the improvement was, you know, was expected on our side. But, you know, certainly as with greater sales, there's some leverage of fixed costs that help, you know, that help margins; but much more the impacts of margins are everything from, you know, commodity costs, inbound and outbound freight, labor, et cetera.

Speaker Change #112: Yes, well again I would say margins came in where we were expecting the top line was.

Speaker Change #113: Softer than we had hoped for.

Speaker Change #114: But margins for.

Speaker Change #114: For the year came in very nicely, we're comping against in the fourth quarter already nicely improved margins a year ago in the fourth in the fourth quarter. So the moderation of the improvement was was expected on an <unk>.

Bill Shea: The inbound freight, again, we've locked in pricing that are competitive, but the spot market is very, you know, is very high now. So it's hard if you go outside your contractual volume in a particular month, not to have increases on the inbound life. So we factored all those items into, you know, the guidance, you know, for margin improvement, but much more modest than we saw, you know, last year. You know, again, last year, you know, we increased 260 bass points well ahead of our original plan.

Speaker Change #114: Syed.

It certainly is.

Speaker Change #114: With greater sales.

Syed: Some leverage of fixed costs that helped that helped margins, but much more the impacts of margins or everything from commodity.

Commodity costs, inbound and outbound freight labor et cetera.

Bill Shea: Okay. And then, you know, looking at the 25 guidance with sales black down and your EBITDA. At or below this year's number, it seems like you're not really expecting much EBITDA margin improvement this year, maybe even some degradation despite modest gross margin improvement. So, my reading this right is that there's going to be an increase in marketing expenses over and above what you're going to gain from the gross profit margin improvement. I think it's fair to say, Doug, that's slow as, you know, we have, we've given our guidance and we've been broad in our range because we think there's some opportunity for growth.

Syed: Okay.

Syed: And then looking at the 25 guidance with <unk>.

Syed: Sales were down in your EBITDA.

Speaker Change #116: At or below this year's number it seems like youre, not really expecting much EBITDA margin improvement this year, maybe even some degradation. Despite modest gross margin improvement. So am I reading this right that there is going to be.

Bill Shea: So we already achieved over 40 percent, you know, gross margins. So we said it wouldn't be a linear march to return to our historical gross margins. We had a big jump last year. We'll have a small, small, or improvement in gross margin this year, and they'll give you the practice on the commodity impacts. In addition, we're going to spend more money on marketing this year because we think the opportunity there is to improve our overall revenue trends, and that's going to be the expense of more marketing spread.

Michael Kupinski: Gotcha.

Speaker Change #117: An increase in marketing expenses.

Speaker Change #118: Over and above what youre going to gain from the gross profit margin improvement.

Speaker Change #118: I think it's fair to say Doug.

Doug Lane: That's fluid we have given our guidance and we've been broadened our range because.

Speaker Change #119: We think there's some opportunity for growth we're not we're not April exactly book the gains from that increased marketing expense. So you don't see much of that and therefore, so there is upside to what we are saying it all depends on what the yield from that increased marketing spend will be.

Doug Lane: We're not able to exactly book the gain from that increase marketing spend, so you don't see much of that in there at all. So there is upside to what we're saying. It all depends on what the yield from that increase. Okay. Fair enough. Yeah, yeah. That makes sense.

Michael Kupinski: Those were our major questions. I appreciate it. Thank you. Thank you, Michael.

Alex Fuhrman: The next question comes from Alex Ferman with Craig Allen Capital Group. Please go ahead. Hey guys, thanks very much for taking my questions.

Speaker Change #120: Okay Fair enough. Thanks, Yes, yes that makes sense and then yeah.

Tom Hartnett: And then you have really talked about personalization; all that was a big acquisition for you. Maybe it hasn't worked out quite as well as you anticipated, but still a big business. Can you just comment, maybe Tom, on how Personalization Mall is going, but your outlook is there for fiscal 25? Yeah, so certainly the Personalization Mall brand was more impacted than of many of our brands by the stratification of customers where, you know, we didn't have, we do have, you know, a higher portion of customers who are, you know, in that lower household income who are customers of Personalization, well, we're, we've been starting to see that, you know, gain traction.

Speaker Change #121: We've talked about personalization mall that was a big acquisition for you maybe it hasnt worked out quite as well as you anticipated, but still a big business can you just comment maybe Tom on how personalization mall is growing but your outlook is there.

Jim McCann: Bill, congratulations on your retirement. It's been great getting to know you over the last decade or so. Wanted to ask you guys, what have you been seeing in terms of customer acquisition cost? Obviously, there's been a lot going on this year with the Olympics and now the election. Curious if you think there might be an opportunity to accelerate efforts to go after new customers after the election. I think that's very much the case.

Tom Hartnett: For fiscal 'twenty five.

Tom Hartnett: Yes, so certainly the personalization mall brand was.

Tom Hartnett: More impacted than many of our brands by.

Speaker Change #122: The stratification of customers were.

Speaker Change #123: We did have we do have.

Jim McCann: We've been looking historically. We've been at this for a long time. Elections, especially when they're very contentious, and I can't remember the last one that wasn't, are distraction. They're a distraction from a public attention point of view, and there's so much money apporing into the markets to buy media space in radio TV and sort of in every online media. So we're not expecting much of a change in our trend lines before the election, but we do think there's a significant opportunity post-election for us to step into the market more meaningfully.

Speaker Change #123: A higher portion of customers or.

Speaker Change #123: That lower household income.

Speaker Change #123: For our customers and personalization mall.

Speaker Change #123: We've been starting to see that.

Speaker Change #123: Gained traction and I think the introduction of things remembered.

Jim McCann: And I think the introduction of Things Remembered in the product portfolio, where both brands, and even though we go to market with both brands as separate brands, the product line is pretty fluid between those brands. And that's where we've also seen a nice, a nice pickup here. So it provides some more aspirational products for the Personalization Mall customer. And then, like we said, we're seeing a great, great promise for the Things Remembered brand in products in general. So we go to market with a personalization business with a few different brands. Things remember it being the most recent addition that it does.

Speaker Change #124: In the product portfolio, where both brands and they even though we go to market with with both brands as separate brands the product the product line is pretty fluid.

Jim McCann: Overall, I think, as we said, our market expenses budget is to be up this year, and we think there's real good reason and real opportunity there. We continue to gain market share in our core businesses, and I think the cost of acquisition of customers is one of the reasons for that, because it is starkly high and likely to stay. Yeah. Okay. That's really helpful. Yeah. We see, Alex, you see it moderating, but it will be universally moderating.

Speaker Change #124: Between those brands and that's.

Speaker Change #124: Where we've also seen a nice a nice pick up here or so.

Speaker Change #124: It provides some more aspirational products for the personalization mall customer.

Speaker Change #124: And then like we said we're seeing.

Speaker Change #124: Great Great promise.

Speaker Change #124: The things remember brand and products in general.

Speaker Change #124: If we go to market on the personalization business, but with a few different brands things remembered being the most recent addition that Doug is very much like Schlumberger. All we got was the IP the intellectual property that brand Urls that database of past customers and a couple of terrific people who came over to us.

Jim McCann: And it's very much like Sharpenberger. All we got was the IP, the intellectual property, the brand, the URL, the database of past customers, and a couple of terrific people who came over to us. The personalization mall brand and business that we acquired, yes, a large acquisition that we did, that struggled with Tom said a little bit more than the rest of the house brands because of its focus on a more modest income customer. But with the introduction of Things Remembered, Tom and his team have positioned that as a more aspirational, higher-end brand. And so what we had is we got the box, the facility, the high tech, very well run facility.

Jim McCann: We, I mean, obviously we have a tremendous amount of lines in the water all the time and we're measuring each one of those activities that we have a pretty good idea what our playbook is going to be, you know, post-election here. That's really helpful.

Tom Hartnett: The personalization more brand and business that we acquired yes, a larger acquisition that we did that struggled as Tom said, a little bit more than the rest of the house brands because of its focus on a more.

Alex Fuhrman: Thank you both.

Doug Lane: Next question comes from Doug Lane with Water Tower Research. Please go ahead. Yes, all right.

Speaker Change #124: Modest.

Speaker Change #124: Some customer, but with the introduction of things remembered Tom and his team have positioned that as a more aspirational higher end brands and so what we have is we got the box the facility the high Tech very well run facilities and we were able to take an intellectual property acquisition bolted on the front of that and as we've had time now to source inventory.

Doug Lane: Good morning, everybody, and congratulations, Bill and retirement. Just want to build down on guidance here a little bit. The whole cell orders are encouraging for the December quarter. It's important for that quarter. And you mentioned the first quarter. The September quarter is likely to be sort of continuing the trend of the second half of the last fiscal year. So that implies we'll see hopefully positive signs in front of some sales numbers in the last three quarters of this fiscal year.

Jim McCann: And we were able to take the intellectual property acquisition, both it on the front of that. And as we've had time now, the source of the inventory, getting into stock, used that same efficient, very well run machine. We're able to grow that. So Tom and all of us are optimistic about personalization businesses this year. But it's a multi-brand strategy using one core asset and facility to grow those businesses inexpensively in the same way we do in Sharpenberger. And with differentiation between brands. Okay.

Speaker Change #124: Getting into stock and use that same efficient very well run machine.

Speaker Change #124: We're able to grow that so thumbs up.

Speaker Change #124: For all of US are optimistic about our personalization businesses. This year, but it is a multi brand strategy using one core asset and facility to grow those businesses and extensively in the same way, we do and sharpened Burger.

Doug Lane: Do you think it could be as soon as the December quarter? Yes, we thought we we expect that the trend lines will start improve in the second quarter. Yes. I mean, I actually have positive sales growth or is that more the back half phenomenon? Yeah, we don't really break it down. You know, I think it could be a meaningful improvement in the trend. Okay, when I've ready to declare victory yet though.

Speaker Change #124: And with differentiation between brands.

Speaker Change #125: Okay fair enough. Thank you.

Jim McCann: Thank you. And thanks.

Okay. Thanks.

Linda Bolton: The next question comes from Linda Bolton-Wyver with B.A. Davidson. Please go ahead. Yes, hi. So, Bill, congratulations on your great career. And I certainly will miss you as well. And welcome to James in the new role.

Speaker Change #126: The next question comes from Linda Bolton Weiser with D. A Davidson. Please go ahead.

Doug Lane: No, no, I get it. It's still a very uncertain environment out there. And also in the margins. I think was asked earlier about commodity costs and certainly in the June quarter, the margins in the gourmet food and gift baskets were the one what I was expecting. I just wondered how much of that was because the sales were lower than expected or how much of that is because of some sort of a rise in the input cost front that you were unexpected that you were not expecting.

Speaker Change #126: Yes, hi.

Speaker Change #127: Bill Congratulations on your great career, and I certainly will Miss you.

Gains: Well and welcome to gains in the new role.

Bill Shea: So I was curious about just two questions from me on BloomNet. Can you remind us kind of when that impact of the loss of that customer or partnership or whatever, when does that anniversary, like what's the timeframe when that will be anniversary. And then my second question is what your outlook is for kind of like the holiday labor situation this year, both in terms of rates and availability. Thank you. On the first one, basically January 1, that contract ended December of last year, so we expect the first two quarters will be down because of the lower orders.

Speaker Change #129: So I was curious about just two questions for me and gloom net.

Speaker Change #130: Can you remind us kind of when that impact of the loss of that customer a partnership or whatever when does that anniversary like what's the timeframe when when that will be Anniversaried and then my second question is what your outlook is for kind of like the holiday labor situation. This year both in terms of.

Doug Lane: Yeah, well, again, I would say, you know, margins came in where we were expecting it. You know, the top line was, you know, was softer than we hoped for. But margins, you know, you know, for the year came in very nicely. We're copying against, you know, in the fourth quarter already nicely improved margins a year ago in the fourth, you know, in the fourth quarter. So the moderation of the improvement was, you know, was expected on on our side.

Speaker Change #131: Rates and availability thanks.

Speaker Change #130: Okay on the first one.

Speaker Change #132: Basically January January one that contract ended December of <unk>.

Speaker Change #132: Last year. So we expect so the first two quarters and that will be down because of the.

Doug Lane: But, you know, certainly as with greater sales, there's some leverage of fixed costs that help, you know, that help margins, but much more the impacts of margins or everything from, you know, commodity costs inbound and outbound freight labor, et cetera. Okay. And then, you know, looking at the 25 guidance with sales black down and your EBITDA. At or below this year's number, it seems like you're not really expecting much EBITDA margin improvement this year, maybe even some degradation despite modest gross margin improvement.

Speaker Change #133: Lower orders were building more floor orders into Bloom net and we think second half be able and that will grow.

Bill Shea: We're building more floor orders into Blumnet, and we think the second half of the Blumnet will grow. With respect to the operating, it being strong again, early signs are that seasonal labor force will be readily available for us. We've already begun our harvest just about eight days ago now on our pair crop. Peaches are coming to an end, so we already have our labor in place, and it seems as good as last year. And with study economics, I guess, this is the other piece of the question you're asking. Okay, thank you.

Speaker Change #134: With respect to the labor situation.

Speaker Change #134: Last year. It has been it was strong and we're anticipating it being strong again early signs are that it is that.

That seasonal labor force will be readily available for us.

Speaker Change #134: We've already begun our harvest.

Speaker Change #134: About eight days ago now on a per crop we already pieces are coming to an end.

Speaker Change #134: So.

Doug Lane: So my reading this right that there's going to be an increase in marketing expenses over and above what you're going to gain from the gross profit margin improvement. I think it's fair to say, Doug, that's slow as, you know, we have, we've given our guidance and we've been broad in our range because we think there's some opportunity for growth. We're not able to exactly book the gain from that increase marketing spend so you don't see much of that in there at all. So there is upside to what we're saying. It all depends on what the yield from that increase. Okay. Fair enough. Yeah, yeah. That makes sense.

We already have all labor in place and it seems as good as last year.

Speaker Change #134: And with steady economics, I guess is the other piece of that that's right.

Speaker Change #135: Question you are asking.

Speaker Change #136: Okay. Thank you thank.

Unknown Executive: Thank you, London.

Linda: Thank you Linda.

Jim McCann: This concludes our question and answer session.

Linda: This concludes our question and answer session I would like to turn the conference back over to Jim Mccann for any closing remark.

Jim McCann: I would like to turn the conference back over to Jim McCann for any closing remarks. Thank you, folks. In any additional questions, we're here engaged with you and help you in any way we can. I just want to add my thanks again. I appreciate all of you expressing your congratulations to Bill on his retirement, but enough about Bill. Seriously, Bill's been part in and out for more than three decades. He's been a terrific partner, and he's done a terrific job of helping us source his replacement, reenergize, and reorganize our finance team. So we're in awfully good shape.

Jim McCann: Thank you folks and any additional questions. We're here to engage with you and help you in any way, we can and I just wanted to add my thanks again I. Appreciate all of you expressed in your congratulations to bill on his retirement, but enough about bill.

Tom Hartnett: And then you have really talked about personalization all that was a big acquisition for you. Maybe it hasn't worked out quite as well as you anticipated, but still a big business. Can you just comment, maybe Tom on how personalization mall is going, but your outlook is there for fiscal 25? Yeah, so certainly the personalization mall brand was was more impacted than of many of our brands by the stratification of customers where, you know, we didn't have, we do have, you know, a higher portion of customers who are, you know, in that lower household income who are customers of personalization, well, we're, we've been starting to see that, you know, gain traction.

Jim McCann: Bill.

Jim McCann: <unk>.

Speaker Change #138: More than three decades, he has been a terrific partner and he has done terrific job of helping us sources replacement re energize and reorganize.

Speaker Change #138: Finance team. So we're in ultra good shape, James you you come into an easy.

Jim McCann: James, you can move into an easy role because everything's already set up for you. So you can post in your first year in the role because Bill's put us in terrific shape. So thank you, Bill.

James Land: Roll because everything is already set up for you. So you can coast.

James Land: And your first.

James Land: Year and the role because bill has put us in terrific shape. So thank you bill Congratulations and welcome James. Thank you. Thank you all again, we look forward to engaging with you on any questions or follow up you may have.

Jim McCann: Congratulations and welcome, James. Thank you. Thank you all again. We look forward to engaging with you on any questions or follow-up you may have.

Unknown Executive: The conference is now concluded. Thank you for attending today's presentation.

Speaker Change #139: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

You may now disconnect.

Speaker Change #139: [music].

Tom Hartnett: And I think the introduction of things remembered in the product portfolio, where both brands and even though we go to market with both brands as separate brands, the product line is pretty fluid between those brands. And that's where we've also seen a nice, a nice pickup here. So it provides some more aspirational products for the personalization mall customer. And then like we said, we're seeing a great, great promise for the things remembered brand in products in general.

Tom Hartnett: So we go to market with a personalization business with a few different brands, things remember it being the most recent addition that it does. And it's very much like Sharpenberger. All we got was the IP, the intellectual property, the brand, the URL, the database of past customers and a couple of terrific people who came over to us. The personalization mall brand and business that we acquired, yes, a large acquisition that we did, that struggled with Tom said a little bit more than the rest of the house brands because of its focus on a more modest income customer.

Tom Hartnett: But with the introduction of things remembered Tom and his team have positioned that as a more aspirational higher end brand. And so what we had is we got the box, the facility, the high tech, very well run facility. And we were able to take the intellectual property acquisition, both it on the front of that. And as we've had time now, the source of the inventory, getting into stock, used that same efficient, very well run machine.

Tom Hartnett: We're able to grow that. So Tom and all of us are optimistic about personalization businesses this year. But it's a multi brand strategy using one core asset and facility to grow those businesses inexpensively in the same way we do in Sharpenberger. And with differentiation between brands.

Doug Lane: Okay. Thank you. And thanks.

Linda Bolton: The next question comes from Linda Bolton-Wyver with B.A. Davidson. Please go ahead. Yes, hi. So Bill, congratulations on your great career. And I certainly will miss you as well. And welcome to James in the new role.

Linda Bolton: So I was curious about just two questions from me on BloomNet. Can you remind us kind of when that impact of the loss of that customer or partnership or whatever when does that anniversary like what's the timeframe when when that will be anniversary. And then my second question is what your outlook is for kind of like the holiday labor situation this year, both in terms of rates and availability.

Bill Shea: Thank you. On the first one, basically January 1, that contract ended December of last year, so we expect the first two quarters will be down because of the lower orders. We're building more floor orders into Blumnet, and we think second half of the Blumnet will grow. With respect to the operating it being strong again, early signs are that seasonal labor force will be readily available for us. We've already begun our harvest just about eight days ago now on our pair crop.

Bill Shea: Peaches are coming to an end, so we already have our labor in place and it seems as good as last year. And with study economics, I guess, this is the other piece of the question you're asking.

Linda Bolton: Okay, thank you. Thank you, London.

Jim McCann: This concludes our question and answer session. I would like to turn the conference back over to Jim McCann for any closing remarks. Thank you, folks. In any additional questions, we're here engaged with you and help you in any way we can. I just want to add my thanks again. I appreciate all of you expressing your congratulations to Bill on his retirement, but enough about Bill. Seriously, Bill's been part and out for more than three decades.

Jim McCann: He's been a terrific partner and he's done a terrific job of helping us source his replacement, reenergize and reorganize our finance team. So we're an awfully good shape. James, you can move into an easy role because everything's already set up for you. So you can post in your first year in the role because Bill's put us in terrific shape. So thank you, Bill. Congratulations and welcome, James. Thank you. Thank you all again. We look forward to engaging with you on any questions or follow-up you may have.

Unknown Executive: The conference is now concluded. Thank you for attending today's presentation.

Unknown Executive: You may now disconnect.

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