Growing Market Leader in Gifting and Sharing
1-800-FLOWERS.COM, Inc.’s (FLWS:NASDAQ) flagship line-up of gifting products, such as Harry & David®, The Popcorn Factory®, Cheryl’s Cookies®, 1-800-Baskets.com®, PersonalizationMall.com®, and Shari’s Berries®, generated record revenues in FY 2022. Over the past several years, the company has significantly transformed, growing from a collection of specialty brands into a unique e-commerce platform for gift giving occasions
- 4% revenue growth in fiscal year 2022
- Total 2022 revenues at a record $2.21 billion
- 30+ million gifts a year
- 17 brands spanning gourmet foods, gift baskets, floral products, personalized keepsake items and more
Advisor Access spoke with Chris McCann, president and CEO of 1-800-FLOWERS.COM, Inc.
Advisor Access: Would you describe 1-800-FLOWERS.COM’s business?
Chris McCann: We are the leading provider of gifts designed to help our customers express, connect, and celebrate with the important people in their lives. Our objective is to be the leading authority on thoughtful gifting, to serve an expanding range of our customers’ celebratory needs, thereby helping our customers express themselves and connect with the important people in their lives. We will continue to build on the trusted relationships we’ve established with our customers by providing them with ease of access, tasteful and appropriate gifts, and superior service.
We are also focused on becoming an engagement company and are working on communication and content development initiatives to create more frequent interaction with customers beyond transactions with our signature brands. By increasing engagement with our customers, we help to inspire more human expression and connection—sentiments that are more important than ever in the current environment.
Through this expanded content development and deployment across a broad range of social channels, we are creating a customer community that we expect will generate extensive growth and strong shareholder value by enhancing customer loyalty and building repeat business.
AA: 1-800-FLOWERS.COM recently released fiscal year 2022 fourth quarter and full year financial results, which included a 4.0% increase in Total Net Revenues to a record $2.21 billion. At the same time, Net Income and EBITDA decreased. What was behind the successes and the challenges for the year?
CM: Our full fiscal year 2022 revenues rose 4%, compared with the prior year. It’s important to note that this is on top of the more than 40% revenue growth we saw last year and represents more than 75% revenue growth as compared to fiscal 2019, which was prior to the pandemic.
Our growth for fiscal 2022 illustrates our ability to retain and build on the gains we achieved over the past two years. This reflects the healthy growth that we have seen in our customer file combined with our expanded product offerings and our ever-increasing focus on engaging with our customers through a combination of highly relevant content and unique experiences.
Beginning last December, unprecedented inflation in the macro economy began to change consumer behavior and impacted many of our costs. Consumer demand moderated, while we experienced steep cost increases on everything from labor to shipping to commodities, which impacted our gross margins and ultimately EBITDA and net income.
While inflationary pressures remain, we are beginning to see early improvements in certain areas, including fuel prices that have pulled back from their peaks, softening in ocean freight costs, and stabilization of labor rates with some improvement in availability. Additionally, we have taken proactive steps to address these issues utilizing our balance sheet to invest in our operating platform and continue to build for the future. We have automated our warehouse and distribution facilities to reduce our exposure to labor challenges, built inventories to get ahead of global supply chain issues, and implemented logistics optimizing programs to enhance our outbound shipping operations and manage rising shipping rates.
AA: Would you tell us about 1-800-FLOWERS.COM’s E-commerce platform and how it is built for growth?
CM: Our company has grown from a collection of specialty brands into a highly scalable e-commerce platform built for growth and is well-positioned for the future.
As part of our continuing effort to serve the thoughtful gifting needs of our customers and leverage our business platform, we continue to build a Celebratory Ecosystem that features a collection of premium gifting brands and an increasing suite of products and services designed to help our customers deliver smiles to the important people in their lives.
Our platform enables us to expand rapidly into new product categories using a marketplace concept, providing customers with a wider selection of solutions to help them express, connect and celebrate for all occasions and recipients—including themselves. We have extended our offerings through organic development and, where appropriate, through acquisition of complementary businesses.
Our business platform features our all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, PersonalizationMall.com®, Shari’s Berries®, FruitBouquets.com®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, Stock Yards® and Simply Chocolate®.
AA: One of 1-800-FLOWERS.COM’s goals is to strengthen customer engagement and create a sense of community. What is the company doing to achieve this?
CM: We are deepening the relationships we have with our customers by offering them a combination of highly relevant content, interactive experiences, and platforms that promote two-way dialog, which enhance our position as our customers’ go-to resource when they want to connect or express themselves with a gift.
To create a true community for our customers, we amplified our interactive engagement through a broad range of non-transactional experiences and content, including our Celebrations Pulse emails, Celebrations Chatter podcast, interactive blogs and virtual workshops, that feature collaborative design and confection of everything from floral arrangements to charcutier boards.
These efforts, combined with our Connections Communities social media platform and a growing number of influencer campaigns enabled us to achieve more than 127 million non-transactional consumer engagements, well past our goal for the year. This is significant as customers who engage with our content convert significantly higher than those who do not. A combination of these initiatives and continued product expansion enabled us to attract more than 5 million new customers during fiscal 2022.
AA: What is ahead for 1-800-FLOWERS.COM?
CM: Over the past several years we have significantly transformed our company, growing from a collection of specialty brands into a unique e-commerce platform for gift giving occasions, including “just because.” During this time, we also attracted many new customers to our platform and our focus is on increasing engagement with our existing customer base and encouraging more opportunities for them to shop to across our family of all-star brands.
As always, we remain laser-focused on our Vision: to inspire more human expression, connection, and celebration—and our Mission: to deliver smiles.
AA: Thank you, Chris.
Chris McCann, Chief Executive Officer, 1-800-FLOWERS.COM, Inc., is responsible for the company’s operations across all of its brands and businesses. He oversees the company’s strategic, operational and organizational processes, including the development, implementation and execution of annual and longer-term strategic, operating and budget plans.
Chris joined the organization in 1984, helping lead the disruption of the flower industry with the company’s innovative use of 800# watts-line technology and subsequently helping transform the company with the adoption of online technology as a pioneer in e-commerce. He served as President of 1-800-FLOWERS.COM, Inc. for several years and was named CEO in 2016. Chris has played a pivotal role in building the reputation of 1-800-FLOWERS.COM, Inc. as one of the leading e-commerce and mobile commerce retailers in the country. He is well-known for embracing technology innovations that enhance customer engagement, particularly in the areas of social, mobile and conversational commerce. Chris believes strongly in the company’s mantra that its “best product is the customer experience.” As a result of his leadership, 1-800-FLOWERS.COM, Inc. was recognized among the top 5 on the National Retail Federation’s 2021 Hot 25 Retailers list, which ranks the nation’s fastest-growing retail companies.
Chris currently serves as Vice Chairman of the Board of IGHL, a facility dedicated to the enrichment of the lives of developmentally disabled adults, a cause that is near to his heart. In 2005, together with his brother Jim, he helped found Smile Farms Inc., a non-profit organization dedicated to providing meaningful job opportunities for individuals with developmental disabilities. Today, Smile Farms operates 11 farm campuses and employs and empowers approximately 270 individuals with disabilities. Chris also serves on the Board of Trustees of Marist College and is a member of the Board’s Diversity & Inclusion Committee.
Chris earned a Bachelor of Arts in Political Science from Marist College.
“We believe that there is a favorable risk/reward relationship and maintain our Outperform rating.”
—Michael Kupinski, Noble Capital Markets, Inc.
Sept. 2, 2022
“We expect the company to maintain a strong financial profile.”
—Anthony C. Lebiedzinski, Sidoti & Company
Sept. 3, 2022
“Free cash flow in FY23 is expected to be positive.”
—Linda Bolton Weiser, D. A. Davidson & Co.
Sept. 1, 2022
Investors and others should note that 1-800-FLOWERS.COM, Inc. posts important financial information using the investor relations section of the 1-800-FLOWERS.COM, Inc. website, www.1-800-FLOWERS.COM, and Securities and Exchange Commission filings.
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