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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 28, 2025

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission File No. 0-26841

1-800-FLOWERS.COM, Inc.

(Exact name of registrant as specified in its charter)


Delaware			11-3117311
(State of incorporation)			(I.R.S. Employer Identification No.)
Two Jericho Plaza, Suite 200, Jericho, NY 11753			(516) 237-6000
(Address of principal executive offices) (Zip code)			(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A common stock	FLWS	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


o Large accelerated filer			ý Accelerated filer
o Non-accelerated filer			o Smaller reporting company
			o Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The number of shares outstanding of each of the Registrant’s classes of common stock as of January 23, 2026:


Class A common stock: 36,997,584
Class B common stock: 27,068,221

Table of Contents

1-800-FLOWERS.COM, Inc.

FORM 10-Q

For the quarterly period ended December 28, 2025

TABLE OF CONTENTS


		Page
Part I.	Financial Information
Item 1.	Condensed Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets – December 28, 2025 (Unaudited) and June 29, 2025	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) – Three and Six Months Ended December 28, 2025 and December 29, 2024	2
	Condensed Consolidated Statements of Stockholders' Equity (Unaudited) – Three and Six Months Ended Dec ember 28, 2025 and Dec ember 29, 2024	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) – Six Months Ended Dec ember 28, 2025 and Dec ember 29, 2024	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

Part II.	Other Information	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37

Signatures		38

Table of Contents

PART I. – FINANCIAL INFORMATION

ITEM 1. – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except for share data)


	December 28, 2025		June 29, 2025
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	193,337	$	46,502
Trade receivables, less allowances for credit losses of $2,331 and $2,440, respectively	55,666		21,693
Inventories	148,884		177,127
Prepaid and other	19,393		37,405
Total current assets	417,280		282,727

Property, plant and equipment, net	204,623		215,596
Operating lease right-of-use assets	100,477		107,476
Goodwill	37,625		37,625
Trademarks with indefinite lives	86,673		86,673
Other intangibles, net	1,875		2,691
Other assets	44,507		39,829
Total assets	$	893,060	$	772,617

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	123,149	$	74,581
Accrued expenses	168,901		109,887
Current maturities of long-term debt	24,000		21,000
Current portion of long-term operating lease liabilities	16,711		15,918
Total current liabilities	332,761		221,386

Long-term debt, net	123,470		134,764
Long-term operating lease liabilities	93,552		99,644
Deferred tax liabilities, net	6,776		6,679
Other liabilities	46,800		41,862
Total liabilities	603,359		504,335

Commitments and contingencies (See Note 13)

Stockholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued	-		-
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 60,120,003 and 59,470,528 shares issued at December 28, 2025 and June 29, 2025, respectively	600		594
Class B common stock, $0.01 par value, 200,000,000 shares authorized, 32,348,221 shares issued at December 28, 2025 and June 29, 2025	323		323
Additional paid-in capital	415,881		411,280
Retained earnings	82,581		64,985
Accumulated other comprehensive loss	(140)		(140)
Treasury stock, at cost, 23,122,419 and 22,919,849 Class A shares at December 28, 2025 and June 29, 2025, respectively, and 5,280,000 Class B shares at December 28, 2025 and June 29, 2025	(209,544)		(208,760)
Total stockholders’ equity	289,701		268,282
Total liabilities and stockholders’ equity	$	893,060	$	772,617

See accompanying Notes to Condensed Consolidated Financial Statements.

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1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except for per share data)

(unaudited)


	Three Months Ended				Six Months Ended
	December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024

Net revenues	$	702,179	$	775,492	$	917,379	$	1,017,582
Cost of revenues (excludes depreciation and amortization)	406,713		439,899		545,151		589,670
Gross profit	295,466		335,593		372,228		427,912
Operating expenses:
Marketing and sales	156,068		187,003		225,173		269,100
Technology and development	14,438		15,973		28,588		31,612
General and administrative	37,066		27,410		68,184		55,936
Depreciation and amortization	13,569		14,130		26,471		27,168


Total operating expenses	221,141		244,516		348,416		383,816
Operating income	74,325		91,077		23,812		44,096
Interest income	(122)		(484)		(433)		(1,144)
Interest expense	6,208		4,880		10,829		8,900
Other income, net	(1,871)		(1,164)		(4,218)		(2,931)
Income before income taxes	70,110		87,845		17,634		39,271
Income tax (benefit) expense	(443)		23,497		38		9,113
Net income and comprehensive net income	$	70,553	$	64,348	$	17,596	$	30,158

Basic net income per common share	$	1.11	$	1.01	$	0.28	$	0.47

Diluted net income per common share	$	1.10	$	1.00	$	0.28	$	0.47

Weighted average shares used in the calculation of net income per common share:
Basic	63,816		63,836		63,723		64,017
Diluted	63,965		64,306		63,913		64,501

See accompanying Notes to Condensed Consolidated Financial Statements.

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1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share data)

(unaudited)


	Three Months Ended December 28, 2025 and December 29, 2024
	Common Stock						Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss					Total Stockholders’ Equity
	Class A			Class B									Treasury Stock
	Shares	Amount		Shares	Amount								Shares	Amount

Balance at September 28, 2025	59,544,423	$	595	32,348,221	$	323	$	413,591	$	12,028	$	(140)	28,225,729	$	(208,889)	$	217,508
Net income	-	-		-	-		-		70,553		-		-	-		70,553
Stock-based compensation	575,580	5		-	-		2,290		-		-		-	-		2,295

Acquisition of Class A treasury stock	-	-		-	-		-		-		-		176,690	(655)		(655)
Balance at December 28, 2025	60,120,003	$	600	32,348,221	$	323	$	415,881	$	82,581	$	(140)	28,402,419	$	(209,544)	$	289,701

Balance at September 29, 2024	58,798,430	$	588	32,348,221	$	323	$	401,685	$	230,788	$	(127)	27,085,703	$	(199,840)	$	433,417
Net income	-	-		-	-		-		64,348		-		-	-		64,348
Stock-based compensation	466,301	5		-	-		3,624		-		-		-	-		3,629
Exercise of stock options	16,522	-		-	-		141		-		-		-	-		141
Acquisition of Class A treasury stock	-	-		-	-		-		-		-		790,514	(6,428)		(6,428)
Balance at December 29, 2024	59,281,253	$	593	32,348,221	$	323	$	405,450	$	295,136	$	(127)	27,876,217	$	(206,268)	$	495,107

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1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share data)

(unaudited)


	Six Months Ended December 28, 2025 and December 29, 2024
	Common Stock						Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss					Total Stockholders’ Equity
	Class A			Class B									Treasury Stock
	Shares	Amount		Shares	Amount								Shares	Amount

Balance at June 29, 2025	59,470,528	$	594	32,348,221	$	323	$	411,280	$	64,985	$	(140)	28,199,849	$	(208,760)	$	268,282
Net income	-	-		-	-		-		17,596		-		-	-		17,596
Stock-based compensation	649,475	6		-	-		4,601		-		-		-	-		4,607

Acquisition of Class A treasury stock	-	-		-	-		-		-		-		202,570	(784)		(784)
Balance at December 28, 2025	60,120,003	$	600	32,348,221	$	323	$	415,881	$	82,581	$	(140)	28,402,419	$	(209,544)	$	289,701

Balance at June 30, 2024	58,792,695	$	588	32,348,221	$	323	$	399,165	$	264,978	$	(127)	26,925,290	$	(198,585)	$	466,342
Net income	-	-		-	-		-		30,158		-		-	-		30,158
Stock-based compensation	467,301	5		-	-		6,103		-		-		-	-		6,108
Exercise of stock options	21,257	-		-	-		182		-		-		-	-		182
Acquisition of Class A treasury stock	-	-		-	-		-		-		-		950,927	(7,683)		(7,683)
Balance at December 29, 2024	59,281,253	$	593	32,348,221	$	323	$	405,450	$	295,136	$	(127)	27,876,217	$	(206,268)	$	495,107

See accompanying Notes to Condensed Consolidated Financial Statements.

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1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Six Months Ended
	December 28, 2025		December 29, 2024

Operating activities:
Net income	$	17,596	$	30,158
Reconciliation of net income to net cash provided by operating activities, net of acquisitions:

Depreciation and amortization	26,471		27,168
Amortization of deferred financing costs	706		361
Deferred income taxes	421		(1,496)
Bad debt expense	62		131
Stock-based compensation	4,607		6,108
Other non-cash items	(392)		(412)
Changes in operating items, net of acquisitions:
Trade receivables	(30,380)		(43,400)
Inventories	28,243		20,446
Prepaid and other	18,013		5,850
Accounts payable and accrued expenses	103,602		104,671
Other assets and liabilities	1,960		1,722
Net cash provided by operating activities	170,909		151,307

Investing activities:
Acquisitions, net of cash acquired	-		(3,000)

Capital expenditures	(14,290)		(23,023)
Net cash used in investing activities	(14,290)		(26,023)

Financing activities:
Acquisition of treasury stock	(784)		(7,683)
Proceeds from exercise of employee stock options	-		182
Proceeds from bank borrowings	175,000		110,000
Repayment of bank borrowings	(184,000)		(140,000)

Net cash used in financing activities	(9,784)		(37,501)

Net change in cash and cash equivalents	146,835		87,783
Cash and cash equivalents:
Beginning of period	46,502		159,437
End of period	$	193,337	$	247,220

See accompanying Notes to Condensed Consolidated Financial Statements.

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1-800-FLOWERS.COM, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1 – Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by 1-800-FLOWERS.COM, Inc. and Subsidiaries (the “Company”) in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended December 28, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending June 28, 2026. These financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 29, 2025.

The Company’s quarterly results may experience seasonal fluctuations. Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s second fiscal quarter, typically generates over 40% of the Company’s annual revenues, and all of its earnings. Due to the number of major floral gifting occasions, including Mother's Day, Valentine’s Day, Easter, and Administrative Professionals Week, revenues also have historically risen during the Company’s fiscal third and fourth quarters in comparison to its fiscal first quarter.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition

Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Service and outbound shipping charged to customers are recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers.

A description of our principal revenue generating activities is as follows:

•E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due prior to the date of shipment.

•Retail revenues - consumer products sold through our retail stores. Revenue is recognized when control of the goods is transferred to the customer at the point of sale, at which time payment is received.

•Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer.

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•BloomNet® services - membership fees as well as other service offerings to florists. Membership and other subscription-based fees are recognized monthly as earned. Services revenues related to orders sent through the floral network are variable, based on either the number of orders or the value of orders, and are recognized in the period in which the orders are delivered. The contracts within BloomNet services are typically month-to-month and, as a result, no consideration allocation is necessary across multiple reporting periods. Payment is typically due less than 30 days from the date the services were performed.

See Note 14 - Business Segments for additional information on disaggregated revenue.

Deferred Revenues

Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. As such, customer orders are recorded as deferred revenue prior to shipment or rendering of product or services. Deferred revenues primarily relate to e-commerce orders placed, but not shipped, prior to the end of the fiscal period, as well as for subscription programs, including our various food, wine, and plant-of-the-month clubs, and our Celebrations Passport® program.

Our total deferred revenue as of June 29, 2025 was $23.7 million of which $7.9 million and $21.1 million was recognized as revenue during the three and six months ended December 28, 2025. The deferred revenue balance as of December 28, 2025 was $30.0 million and is included within the “Accrued expenses” line item in the consolidated balance sheets.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires enhanced disclosures about a business entity's expenses, includes enhanced interim disclosure requirements, and requires additional disclosure about specific types of expenses included in the expense captions presented on the face of the income statement, as well as disclosures about selling expenses. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 allows for either a prospective or retrospective approach on adoption. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires the disclosure of additional information with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes and requires greater detail about significant reconciling items in the reconciliation. Additionally, the amendment requires disaggregated information pertaining to taxes paid, net of refunds received, for federal, state, and foreign income taxes. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and allows for either a prospective or retrospective approach on adoption. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures and plans to adopt this standard in the fourth quarter of fiscal 2026.

Note 2 – Net Income (Loss) Per Common Share

Basic net income per common share is computed by dividing the net income during the period by the weighted average number of common shares outstanding during the period. Diluted net income per common share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock.

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The following table sets forth the computation of basic and diluted net income per common share:


	Three Months Ended				Six Months Ended
	December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024

	(in thousands, except per share data)
Numerator:
Net income	$	70,553	$	64,348	$	17,596	$	30,158

Denominator:
Weighted average shares outstanding	63,816		63,836		63,723		64,017
Effect of dilutive stock options and unvested restricted stock awards	149		470		190		484

Diluted weighted-average shares and assumed conversions	63,965		64,306		63,913		64,501

Net income per common share
Basic	$	1.11	$	1.01	$	0.28	$	0.47
Diluted	$	1.10	$	1.00	$	0.28	$	0.47

Note 3 – Acquisitions

Acquisition of Scharffen Berger®

On July 1, 2024, the Company completed its acquisition of certain assets of the Scharffen Berger® brand, a chocolate manufacturer, expanding the Company's product offerings in the Gourmet Foods & Gift Baskets segment. The Company used cash on hand to fund the purchase.

The total consideration of $3.3 million was primarily allocated to the identifiable assets acquired and liabilities assumed based on the estimates of their fair values on the acquisition date. During the quarter ended March 30, 2025, the Company finalized its purchase price allocation, and the consideration transferred was allocated to property, plant and equipment of $2.0 million, inventory of $1.3 million, and goodwill of $0.1 million (deductible for income tax purposes), partially offset by net liabilities of $0.1 million.

Scharffen Berger annual revenues and results of operations, based on its most recently available financial information, are deemed immaterial to the Company's consolidated financial statements and, as such, pro forma results of operations have not been presented.

Note 4 – Inventory

The Company’s inventory, valued at the lower of cost or net realizable value, includes purchased and manufactured finished goods for sale, packaging supplies, crops, raw material ingredients for manufactured products and associated manufacturing labor, and is classified as follows:


	December 28, 2025		June 29, 2025

	(in thousands)
Finished goods	$	98,169	$	99,703
Work-in-process	11,261		19,256
Raw materials	39,454		58,168
Total inventory	$	148,884	$	177,127

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Note 5 – Property, plant and equipment, net

The Company’s property, plant and equipment, net consists of the following:


	December 28, 2025		June 29, 2025

	(in thousands)
Land	$	33,792	$	33,811
Orchards in production and land improvements	21,605		21,539
Building and building improvements	70,618		70,479
Leasehold improvements	32,162		31,866
Production equipment	134,793		135,213
Furniture and fixtures	9,613		9,517
Computer and telecommunication equipment	42,562		41,378
Software	226,156		208,960
Capital projects in progress	6,275		13,313
Property, plant and equipment, gross	577,576		566,076
Accumulated depreciation and amortization	(372,953)		(350,480)
Property, plant and equipment, net	$	204,623	$	215,596

Note 6 – Goodwill, Trademarks with indefinite lives and other intangibles, net

The following table presents goodwill by segment:


	Consumer Floral & Gifts		BloomNet		Gourmet Foods & Gift Baskets		Total

	(in thousands)
Balance at June 29, 2025 and December 28, 2025	$	34,554	$	2,960	$	111	$	37,625

The total carrying value of goodwill is reflected net of $252.4 million of accumulated impairment charges, of which $119.0 million is related to the Consumer Floral & Gifts reporting unit and $133.4 million is related to the Gourmet Foods & Gift Baskets reporting unit.

The Company’s trademarks with indefinite lives and other intangible assets, net consists of the following:


		December 28, 2025						June 29, 2025
	Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net

	(in years)	(in thousands)
Intangible assets with determinable lives
Investment in licenses	14 - 16	$	7,420	$	6,832	$	588	$	7,420	$	6,780	$	640
Customer lists	3 - 10	29,647		28,552		1,095		29,647		27,818		1,829
Other	5 - 14	2,946		2,754		192		2,946		2,724		222
Total intangible assets with determinable lives		40,013		38,138		1,875		40,013		37,322		2,691
Trademarks with indefinite lives		86,673		-		86,673		86,673		-		86,673
Total identifiable intangible assets		$	126,686	$	38,138	$	88,548	$	126,686	$	37,322	$	89,364

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Future estimated amortization expense is as follows: remainder of fiscal 2026 - $0.6 million, fiscal 2027 - $0.6 million, fiscal 2028 - $0.3 million, fiscal 2029 - $0.2 million, fiscal 2030 - $0.1 million and thereafter - $0.1 million.

Additional Goodwill and Indefinite-Lived Intangible Asset Considerations

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of goodwill and indefinite-lived intangible assets requires the Company to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows, income tax considerations, discount rates, long-term growth rates, royalty rates, and other market factors. If current expectations of future growth rates and margins are not met, if market factors outside of our control change, such as discount rates, market capitalization, income tax rates, or inflation, or if management’s expectations or plans otherwise change, including updates to our long-term operating plans, then goodwill or indefinite-lived intangible assets might become impaired in the future.

As discussed in the Annual Report on Form 10-K for the fiscal year ended June 29, 2025, goodwill for the Company’s Consumer Floral & Gifts reporting unit and the Company’s Personalization Mall tradename were impaired during the quarter ended March 30, 2025 and were written down to their respective fair values causing zero excess fair value over the carrying amount as of the impairment test date, resulting in a risk of future impairments if any assumptions (including changes in segments), estimates, or market factors change in the future.

Note 7 – Investments

Equity investments without a readily determinable fair value

Investments in non-marketable equity instruments of private companies, where the Company does not possess the ability to exercise significant influence, are accounted for at cost, less impairment (assessed qualitatively at each reporting period), adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. These investments are included within “Other assets” in the Company’s consolidated balance sheets. The aggregate carrying amount of the Company’s cost method investments was $0.4 million as of both December 28, 2025 and June 29, 2025.

Equity investments with a readily determinable fair value

The Company also holds certain trading securities associated with its Non-Qualified Deferred Compensation Plan (“NQDC Plan”). These investments are measured using quoted market prices at the reporting date and are included within the “Other assets” line item in the consolidated balance sheets (see Note 11 - Fair Value Measurements).

Note 8 – Leases

The Company currently leases plants, warehouses, offices, store facilities, and equipment under various leases through fiscal 2036. Most lease agreements are of a long-term nature (over a year), although the Company also enters into short-term leases, primarily for seasonal needs. Lease agreements may contain renewal options and rent escalation clauses and require the Company to pay real estate taxes, insurance, common area maintenance and operating expenses applicable to the leased properties. The Company accounts for its leases in accordance with Accounting Standards Codification ("ASC") 842.

At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time, by assessing whether the Company has the right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset.

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At the lease commencement date, the Company determines if a lease should be classified as an operating or a finance lease (the Company currently has no finance leases) and recognizes a corresponding lease liability and a right-of-use asset on its consolidated balance sheet. The lease liability is initially and subsequently measured as the present value of the remaining fixed minimum rental payments (including base rent and fixed common area maintenance) using discount rates as of the commencement date. Variable payments (including most utilities, real estate taxes, insurance and variable common area maintenance) are expensed as incurred. Further, the Company elected a short-term lease exception policy, permitting it not to apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The right-of-use asset is initially and subsequently measured at the carrying amount of the lease liability adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use asset. Right-of-use assets are assessed for impairment using the long-lived assets impairment guidance. The discount rate used to determine the present value of lease payments is the Company’s estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the Company generally cannot determine the interest rate implicit in the lease.

The Company recognizes expense for its operating leases on a straight-line basis over the lease term. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Renewal option periods are included in the measurement of lease liability, where the exercise is reasonably certain to occur. Key estimates and judgments in accounting for leases include how the Company determines: (1) lease payments, (2) lease term, and (3) the discount rate used in calculating the lease liability.

Additional information related to the Company's leases is as follows:


	Three Months Ended				Six Months Ended
	December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024

	(in thousands)
Lease costs:
Operating lease costs	$	5,838	$	5,993	$	11,694	$	11,997
Variable lease costs	7,258		6,829		14,397		13,356
Short-term lease cost	2,263		2,310		2,979		3,065
Sublease income	(104)		(206)		(274)		(436)
Total lease costs	$	15,255	$	14,926	$	28,796	$	27,982

Cash paid for amounts included in measurement of operating lease liabilities					$	9,993	$	10,376
Right-of-use assets obtained in exchange for new operating lease liabilities					$	2,045	$	5,855


	December 28, 2025

Weighted-average remaining lease term - operating leases (in years)	7.1
Weighted-discount rate - operating leases	4.7	%

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Maturities of lease liabilities in accordance with ASC 842 as of December 28, 2025 and reconciliation to the consolidated balance sheet are as follows (in thousands):


Fiscal Year:
Remainder of 2026	$	10,992
2027	20,363
2028	19,395
2029	18,423
2030	15,364
Thereafter	45,710
Total future minimum lease payments	130,247
Less: Imputed remaining interest	19,984
Total operating lease liabilities	110,263
Less: Current portion of long-term operating lease liabilities	16,711
Long-term operating lease liabilities	$	93,552

Note 9 – Accrued expenses

Accrued expenses consists of the following:


	December 28, 2025		June 29, 2025

	(in thousands)
Payroll and employee benefits	$	35,014	$	23,385
Deferred revenue	29,993		23,710
Accrued marketing expenses	13,221		11,116
Accrued florist payout	18,222		9,615
Accrued purchases	26,802		12,438
Other	45,649		29,623
Accrued expenses	$	168,901	$	109,887

Severance and Restructuring Charges

During the quarter ended December 28, 2025, the Company recorded severance and restructuring charges of $6.1 million primarily related to an enterprise reduction in workforce focused on reducing costs and streamlining the organization. These costs are included within the “General and administrative” line item in the consolidated statement of operations. The majority of these costs are expected to be paid during the remainder of fiscal 2026. At December 28, 2025, the Company had $5.3 million recorded related to these charges within the “Accrued expenses” line item in the consolidated balance sheet.

Note 10 – Long-term debt, net

The Company’s current and long-term debt, net consists of the following:

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	December 28, 2025		June 29, 2025

	(in thousands)
Revolving credit facility	$	-	$	-
Term loan	151,000		160,000
Deferred financing costs	(3,530)		(4,236)
Total debt	147,470		155,764
Less: current maturities of long-term debt	24,000		21,000
Long-term debt, net	$	123,470	$	134,764

The Company, certain of its U.S. subsidiaries, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, are party to a Third Amended and Restated Credit Agreement (the “Third Restated Credit Agreement” and, as amended by that certain First Amendment (the “First Amendment”), dated as of January 28, 2025, and that certain Second Amendment (the “Second Amendment”), dated as of May 6, 2025, the “Existing Credit Agreement”).

For each borrowing under the Existing Credit Agreement, the Company may elect that such borrowing bear interest at an annual rate equal to either: (1) a base rate plus an applicable margin varying (other than during the Affected Period) based on the Company’s consolidated leverage ratio, where the base rate is the highest of (a) the prime rate, (b) the New York fed bank rate plus 0.5%, and (c) an adjusted SOFR rate for a one-month interest period plus 1.0%, or (2) an adjusted SOFR rate plus an applicable margin varying (other than during the Affected Period) based on the Company’s consolidated leverage ratio. The adjusted SOFR rate includes a credit spread adjustment of 0.1% for all interest periods. The effective interest rate as of December 28, 2025 related to the Company's outstanding borrowings was 7.6%.

The principal of the outstanding term loan under the Existing Credit Agreement (the "Term Loan") is subject to a quarterly payment of $3.0 million, which commenced on September 26, 2025, increasing to a quarterly payment of $6.0 million for the next 10 payments, with the remaining balance of $97.0 million due upon maturity on June 27, 2028. Future principal Term Loan payments are as follows: $12.0 million – remainder of fiscal 2026, $24.0 million – fiscal 2027, and $115.0 million – fiscal 2028.

The Existing Credit Agreement requires that, while any borrowings or commitments are outstanding, the Company comply with certain financial covenants and certain affirmative covenants and negative covenants that, subject to certain exceptions, limit the Company’s ability to, among other things, incur additional indebtedness, make certain investments, make certain restricted payments and, during the period (the “Affected Period”) from May 6, 2025 until the date the Company has (x) demonstrated compliance with the financial covenants as in effect under the Third Restated Credit Agreement as amended by the First Amendment and (y) if applicable, elected to terminate the Applicable Period during which various modifications set forth in the Second Amendment are in effect, hold cash deposits in accounts not maintained with lenders under the Existing Credit Agreement or their affiliates. The Company was in compliance with these covenants as of December 28, 2025. The Existing Credit Agreement is secured by substantially all of the assets of the Company.

Note 11 – Fair value measurements

Cash and cash equivalents, trade and other receivables, prepaids, accounts payable and accrued expenses are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Although no trading market exists, the Company believes that the carrying amount of its debt approximates fair value due to its variable nature (these are level 2 investments). The Company’s investments in non-marketable equity instruments of private companies are carried at cost and are periodically assessed for other-than-temporary impairment when an event or circumstances indicate that an other-than-temporary decline in value may have occurred. The Company’s remaining financial assets and liabilities are measured and recorded at fair value (see table below). The Company’s non-financial assets, such as definite lived intangible assets and property, plant and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Goodwill and indefinite-lived intangibles are tested for impairment annually, or more frequently, if events occur or circumstances change such that it is more likely than not that an impairment may exist, as required under the accounting standards.

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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the guidance are described below:


Level 1			Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2			Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3			Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents by level, within the fair value hierarchy, financial assets and liabilities measured at fair value on a recurring basis:


	Carrying Value		Fair Value Measurements Assets (Liabilities)
			Level 1		Level 2		Level 3

	(in thousands)
Assets (Liabilities) as of December 28, 2025
Trading securities held in a “rabbi trust” (1)	$	43,250	$	43,250	$	-	$	-
	$	43,250	$	43,250	$	-	$	-

Assets (Liabilities) as of June 29, 2025
Trading securities held in a “rabbi trust” (1)	$	38,370	$	38,370	$	-	$	-
	$	38,370	$	38,370	$	-	$	-

(1)The Company has established a NQDC Plan for certain members of senior management. Deferred compensation plan assets are invested in mutual funds held in a “rabbi trust,” which is restricted for payment to participants of the NQDC Plan. Trading securities held in a "rabbi trust" are measured using quoted market prices at the reporting date and are included in the “Other assets” line item, with the corresponding liability included in the “Other liabilities” line item in the consolidated balance sheets.

Note 12 – Income taxes

The Company computed the interim tax provision using an estimated annual effective rate, adjusted for discrete items. This estimate is used in providing for income taxes on a year-to-date basis and may change in subsequent interim periods. The Company’s effective tax rate for the three and six months ended December 28, 2025 were (0.6)% and 0.2% compared to 26.7% and 23.2% in the same periods of the prior year. The Company’s effective tax rate for the three and six months ended December 28, 2025 differed from the U.S. federal statutory rate of 21.0% primarily due to the change in valuation allowance, state income taxes and interest on uncertain tax positions. The Company’s effective tax rate for the three and six months ended December 29, 2024 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes, tax deficiencies (shortfalls) from stock-based compensation and increases in valuation allowances, partially offset by tax credits.

For the year ended June 29, 2025, the Company had a total valuation allowance of approximately $40.6 million primarily related to net operating losses, charitable contributions, and deferred tax assets that are not more likely than not realizable. For the six months ended December 28, 2025, the Company decreased its valuation allowance by $5.8 million.

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The Company completed its initial assessment of the One Big Beautiful Bill Act (“OBBBA”) corporate tax provisions enacted on July 4, 2025. OBBBA contained several U.S. corporate tax provisions. The EBITDA computation of the business interest expense limitation is not expected to have a significant impact on the Company’s current year tax expense. Additionally, it is not expected that any of the other provisions will impact the Company’s current year U.S. cash tax or effective tax rate.

Note 13 – Commitments and contingencies

Litigation

There are various claims, lawsuits, and pending actions against the Company and its subsidiaries incident to the operations of its businesses. It is the opinion of management, after consultation with counsel, that the final resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

Note 14 – Business segments

The Company has determined it has three business segments, Consumer Floral & Gifts, BloomNet®, and Gourmet Foods & Gift Baskets. These segments align with how operating results are reviewed by the Company's Chief Executive Officer, as Chief Operating Decision Maker to manage the business, assess performance and allocate resources, and further aligns with our product offerings.

Consumer Floral & Gifts – this segment, which includes the operations of the 1-800-Flowers.com®, Personalization Mall®, and Things Remembered® brands, derives revenue from the sale of consumer floral products and gifts through its e-commerce sales channels (telephonic and online sales), retail stores, and royalties from its franchise operations.

BloomNet® – revenues in this segment are derived from membership fees, as well as other product and service offerings.

Gourmet Foods & Gift Baskets – this segment includes the operations of Harry & David®, Wolferman’s Bakery®, Cheryl’s Cookies®, The Popcorn Factory®, 1-800-Baskets.com®/DesignPac®, Shari’s Berries®, Vital Choice®, and Scharffen Berger®. Revenue is derived from the sale of gourmet fruits, cookies, baked gifts, premium chocolates and confections, gourmet popcorn, gift baskets, dipped berries, prime steaks, chops, and fish, through the Company’s e-commerce sales channels (telephonic and online sales) and company-owned and operated retail stores under the Harry & David and Cheryl’s Cookies brand names, as well as wholesale operations.

The accounting policies of the segments are the same as those described in Note 2 - Significant Accounting Policies in the Annual Report on Form 10-K for the fiscal year ended June 29, 2025.

The Company evaluates performance for its reportable segments based on contribution margin, which includes only the direct controllable revenue and operating expenses of the segments. This information is used by the Chief Executive Officer to measure segment profitability, allocate resources, and make budgeting and forecasting decisions about the reportable segments. The Chief Executive Officer also uses this measure to monitor trends in year-over-year performance and to compare actual results to the Company's budget and forecasts.

Management’s measure of profitability for these segments does not include the effect of corporate overhead (see (c) below), nor does it include depreciation and amortization, other expense (income), net, income taxes, or stock-based compensation, which are included within corporate overhead. Sales, cost of revenues, and operating expenses are also provided to the Chief Executive Officer. No asset information is provided for the reportable segments as this information is reviewed at the consolidated level by management and not by segment.

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Three Months Ended December 28, 2025
	Consumer Floral & Gifts		BloomNet		Gourmet Foods & Gift Baskets		Total
Net revenues	$	181,245	$	22,124	$	498,989	$	702,358

Corporate							89
Intercompany eliminations							(268)
Net revenues							702,179

Cost of revenues (excludes depreciation and amortization) (a)	108,488		10,857		287,735

Marketing and sales	51,564		3,812		98,984

Other segment items (b)	5,657		1,295		8,799

Segment contribution margin	15,536		6,160		103,471		125,167

Corporate expenses (c)							37,273
Depreciation and amortization							13,569
Operating income							74,325

Interest income							(122)
Interest expense							6,208
Other income, net							(1,871)
Income before income taxes							$	70,110

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Three Months Ended December 29, 2024
	Consumer Floral & Gifts		BloomNet		Gourmet Foods & Gift Baskets		Total
Net revenues	$	234,349	$	22,837	$	518,454	$	775,640

Corporate							113
Intercompany eliminations							(261)
Net revenues							775,492

Cost of revenues (excludes depreciation and amortization) (a)	136,061		11,213		293,064

Marketing and sales	71,144		3,148		110,490

Other segment items (b)	5,557		1,016		7,623

Segment contribution margin	21,587		7,460		107,277		136,324

Corporate expenses (c)							31,117
Depreciation and amortization							14,130
Operating income							91,077

Interest income							(484)
Interest expense							4,880
Other income, net							(1,164)
Income before income taxes							$	87,845

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Six Months Ended December 28, 2025
	Consumer Floral & Gifts		BloomNet		Gourmet Foods & Gift Baskets		Total
Net revenues	$	296,675	$	45,249	$	575,773	$	917,697

Corporate							157
Intercompany eliminations							(475)
Net revenues							917,379

Cost of revenues (excludes depreciation and amortization) (a)	180,174		22,952		342,558

Marketing and sales	86,566		7,825		127,298

Other segment items (b)	9,898		2,373		15,804

Segment contribution margin	20,037		12,099		90,113		122,249

Corporate expenses (c)							71,966
Depreciation and amortization							26,471
Operating income							23,812

Interest income							(433)
Interest expense							10,829
Other income, net							(4,218)
Income before income taxes							$	17,634

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Six Months Ended December 29, 2024
	Consumer Floral & Gifts		BloomNet		Gourmet Foods & Gift Baskets		Total
Net revenues	$	369,529	$	45,912	$	602,457	$	1,017,898

Corporate							202
Intercompany eliminations							(518)
Net revenues							1,017,582

Cost of revenues (excludes depreciation and amortization) (a)	217,312		22,760		350,223

Marketing and sales	115,603		6,947		142,388

Other segment items (b)	10,083		1,904		14,822

Segment contribution margin	26,531		14,301		95,024		135,856

Corporate expenses (c)							64,592
Depreciation and amortization							27,168
Operating income							44,096

Interest income							(1,144)
Interest expense							8,900
Other income, net							(2,931)
Income before income taxes							$	39,271

(a)Segment cost of revenues includes the costs related to intercompany sales.

(b)Other segment items include technology and development and general and administrative expenses.

(c)Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive, and stock-based compensation, as well as changes in the fair value of the Company's NQDC Plan. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions are included within corporate expenses as they are not directly allocable to a specific segment.

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The following table represents a disaggregation of revenue from contracts with customers, by channel:


	Three Months Ended
	Consumer Floral & Gifts				BloomNet				Gourmet Foods & Gift Baskets				Corporate and Eliminations				Consolidated
	December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024

	(in thousands)
Net revenues
E-commerce	$	179,534	$	232,514	$	-	$	-	$	416,132	$	444,812	$	-	$	-	$	595,666	$	677,326
Other	1,711		1,835		22,124		22,837		82,857		73,642		(179)		(148)		106,513		98,166
Total net revenues	$	181,245	$	234,349	$	22,124	$	22,837	$	498,989	$	518,454	$	(179)	$	(148)	$	702,179	$	775,492

Other revenues detail
Retail and other	1,711		1,835		-		-		5,263		4,559		-		-		6,974		6,394
Wholesale	-		-		8,563		8,571		77,594		69,083		-		-		86,157		77,654
BloomNet services	-		-		13,561		14,266		-		-		-		-		13,561		14,266
Corporate	-		-		-		-		-		-		89		113		89		113
Eliminations	-		-		-		-		-		-		(268)		(261)		(268)		(261)
Total other revenues	$	1,711	$	1,835	$	22,124	$	22,837	$	82,857	$	73,642	$	(179)	$	(148)	$	106,513	$	98,166


	Six Months Ended
	Consumer Floral & Gifts				BloomNet				Gourmet Foods & Gift Baskets				Corporate and Eliminations				Consolidated
	December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024

	(in thousands)
Net revenues
E-commerce	$	293,620	$	366,058	$	-	$	-	$	471,060	$	504,442	$	-	$	-	$	764,680	$	870,500
Other	3,055		3,471		45,249		45,912		104,713		98,015		(318)		(316)		152,699		147,082
Total net revenues	$	296,675	$	369,529	$	45,249	$	45,912	$	575,773	$	602,457	$	(318)	$	(316)	$	917,379	$	1,017,582

Other revenues detail
Retail and other	3,055		3,471		-		-		7,183		6,343		-		-		10,238		9,814
Wholesale	-		-		19,539		18,683		97,530		91,672		-		-		117,069		110,355
BloomNet services	-		-		25,710		27,229		-		-		-		-		25,710		27,229
Corporate	-		-		-		-		-		-		157		202		157		202
Eliminations	-		-		-		-		-		-		(475)		(518)		(475)		(518)
Total other revenues	$	3,055	$	3,471	$	45,249	$	45,912	$	104,713	$	98,015	$	(318)	$	(316)	$	152,699	$	147,082

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” ("MD&A") is intended to provide an understanding of our financial condition, change in financial condition, cash flow, liquidity, and results of operations. The following MD&A discussion should be read in conjunction with the consolidated financial statements and notes to those statements that appear elsewhere in this Form 10-Q and in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2025. The following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed or referred to in the forward-looking statements. Factors that could cause or contribute to any differences include, but are not limited to, those discussed under the caption “Forward-Looking Information and Factors That May Affect Future Results,” under Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2025 under the heading “Risk Factors” and Part II-Other Information, Item 1A in this Form 10-Q.

Business Overview

1-800-FLOWERS.COM, Inc. and its subsidiaries (collectively, the “Company”) is a leading provider of thoughtful expressions designed to help inspire customers to give more, connect more, and build more and better relationships. The Company’s e-commerce 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®, Things Remembered®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, Scharffen Berger®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge on eligible products across our portfolio of brands, the Company strives to deepen relationships with customers. The Company also operates BloomNet®, an international floral and gift industry service provider offering a broad range of products and services designed to help its members grow their businesses profitably; Napco®, a resource for floral gifts and seasonal décor; and DesignPac®, a manufacturer of gift baskets and towers; and Card Isle®, an e-commerce greeting card service.

For additional information, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” of our Annual Report on Form 10-K for the fiscal year ended June 29, 2025.

Fiscal 2026

The Company is approaching fiscal 2026 as a pivotal period of foundation setting. By transforming the Company into a customer-centric, data-driven organization with clear objectives and return on investment-focused decision making, the Company aims to position itself to fuel future growth.

The Company's strategic priorities are focused on positioning the organization for long-term growth. These priorities include:

•driving cost savings and organizational efficiency,

•building a customer-centric and data-driven organization,

•broadening our reach beyond our e-commerce sites into new channels, and

•strengthening our team through enhanced talent and accountability.

With a renewed commitment to agility and customer-centricity, the Company believes these foundational steps will set the stage for sustainable revenue and profit growth in the years to come.

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Definitions of non-GAAP Financial Measures:

We sometimes use financial measures derived from consolidated financial information, but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. See below for definitions and the reasons why we use these non-GAAP financial measures, and reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures. These non-GAAP financial measures are referred to as “non-GAAP”, “adjusted” or "on a comparable basis" below, as these terms are used interchangeably. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, tax items, amortization or others that may arise during the year, and the Company's management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The lack of such reconciling information should be considered when assessing the impact of such disclosures.

EBITDA and Adjusted EBITDA

We define EBITDA as net income (loss) before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of stock-based compensation, Non-Qualified Deferred Compensation Plan (“NQDC Plan”) investment appreciation/depreciation, and certain items affecting period-to-period comparability.

The Company presents EBITDA and Adjusted EBITDA because it considers such information meaningful supplemental measures of its performance and believes such information is frequently used by the investment community in the evaluation of similarly situated companies. The Company uses EBITDA and Adjusted EBITDA as factors to determine the total amount of incentive compensation available to be awarded to executive officers and other employees. The Company's credit agreement uses EBITDA and Adjusted EBITDA-related items to determine its interest rate and to measure compliance with certain covenants. EBITDA and Adjusted EBITDA are also used by the Company to evaluate and price potential acquisition candidates.

EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of the limitations are: (a) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, the Company's working capital needs; (b) EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on the Company's debts; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and EBITDA does not reflect any cash requirements for such capital expenditures. EBITDA and Adjusted EBITDA should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

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The following table presents EBITDA and Adjusted EBITDA:


Reconciliation of net income to Adjusted EBITDA (non-GAAP):	Three Months Ended				Six Months Ended
	December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024

	(in thousands)
Net income	$	70,553	$	64,348	$	17,596	$	30,158
Add: Interest expense and other, net	4,215		3,232		6,178		4,825
Add: Depreciation and amortization	13,569		14,130		26,471		27,168
Add: Income tax (benefit) expense	(443)		23,497		38		9,113
EBITDA	87,894		105,207		50,283		71,264
Add: Stock-based compensation	2,295		3,629		4,607		6,108
Add: Compensation charge related to NQDC Plan investment appreciation	1,850		1,135		4,202		2,873
Add: System implementation costs	-		6,307		-		8,087

Add: Restructuring cost/Severance	6,079		-		6,079		-
Adjusted EBITDA	$	98,118	$	116,278	$	65,171	$	88,332

Adjusted net income (loss) and adjusted or comparable net income (loss) per common share

We define adjusted net income (loss) and adjusted or comparable net income (loss) per common share as net income (loss) and net income (loss) per common share adjusted for certain items affecting period-to-period comparability. We believe that adjusted net income (loss) and adjusted or comparable net income (loss) per common share are meaningful measures because they increase the comparability of period-to-period results. Since these are not measures of performance calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, GAAP net income (loss) and net income (loss) per common share, as indicators of operating performance and they may not be comparable to similarly titled measures employed by other companies.

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The following table presents the adjusted net income and adjusted net income per common share:


Reconciliation of net income to adjusted net income (non-GAAP):	Three Months Ended				Six Months Ended
	December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024

	(in thousands, except for share data)
Net income	$	70,553	$	64,348	$	17,596	$	30,158
Adjustments to reconcile net income to adjusted net income (non-GAAP)
Add: System implementation costs	-		6,307		-		8,087
Add: Restructuring cost/Severance	6,079		-		6,079		-

Deduct: Tax related adjustments	29		(1,475)		29		(2,002)
Adjusted net income (non-GAAP)	$	76,661	$	69,180	$	23,704	$	36,243

Basic and diluted net income per common share
Basic	$	1.11	$	1.01	$	0.28	$	0.47
Diluted	$	1.10	$	1.00	$	0.28	$	0.47

Basic and diluted adjusted net income per common share (non-GAAP)
Basic	$	1.20	$	1.08	$	0.37	$	0.57
Diluted	$	1.20	$	1.08	$	0.37	$	0.56

Weighted average shares used in the calculation of basic and diluted net income and adjusted net income per common share
Basic	63,816		63,836		63,723		64,017
Diluted	63,965		64,306		63,913		64,501

Segment contribution margin and adjusted segment contribution margin

We define segment contribution margin as earnings before interest, taxes, depreciation and amortization, before the allocation of corporate overhead expenses. Adjusted segment contribution margin is defined as segment contribution margin adjusted for certain items affecting period-to-period comparability. When viewed together with our GAAP results, we believe segment contribution margin and adjusted segment contribution margin provide management and users of the financial statements meaningful information about the performance of our business segments.

Segment contribution margin and adjusted segment contribution margin are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of segment contribution margin and adjusted segment contribution margin is that they are an incomplete measure of profitability as they do not include all operating expenses or non-operating income and expenses. Management compensates for this limitation when using these measures by looking at other GAAP measures, such as Operating income (loss) and Net income (loss).

The following table presents the net revenues, gross profit, segment contribution margin, and adjusted segment contribution margin from each of the Company’s business segments:

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	Three Months Ended

	December 28, 2025			Restructuring Cost / Severance		As Adjusted (non-GAAP) December 28, 2025			December 29, 2024			System Implementation Costs		As Adjusted (non-GAAP) December 29, 2024			% Change

	(dollars in thousands)
Net revenues:
Consumer Floral & Gifts	$	181,245		$	-	$	181,245		$	234,349		$	-	$	234,349		-22.7	%
BloomNet	22,124			-		22,124			22,837			-		22,837			-3.1	%
Gourmet Foods & Gift Baskets	498,989			-		498,989			518,454			-		518,454			-3.8	%
Corporate	89			-		89			113			-		113			-21.2	%
Intercompany eliminations	(268)			-		(268)			(261)			-		(261)			-2.7	%
Total net revenues	$	702,179		$	-	$	702,179		$	775,492		$	-	$	775,492		-9.5	%

Gross profit:
Consumer Floral & Gifts	$	72,757		$	-	$	72,757		$	98,288		$	-	$	98,288		-26.0	%
	40.1		%			40.1		%	41.9		%			41.9		%

BloomNet	11,267			-		11,267			11,624			-		11,624			-3.1	%
	50.9		%			50.9		%	50.9		%			50.9		%

Gourmet Foods & Gift Baskets	211,254			-		211,254			225,390			1,992		227,382			-7.1	%
	42.3		%			42.3		%	43.5		%			43.9		%

Corporate	188			-		188			291			-		291			-35.4	%
	211.2		%			211.2		%	257.5		%			257.5		%

Total gross profit	$	295,466		$	-	$	295,466		$	335,593		$	1,992	$	337,585		-12.5	%
	42.1		%			42.1		%	43.3		%			43.5		%

EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
Consumer Floral & Gifts	$	15,536		$	1,108	$	16,644		$	21,587		$	-	$	21,587		-22.9	%
BloomNet	6,160			248		6,408			7,460			-		7,460			-14.1	%
Gourmet Foods & Gift Baskets	103,471			1,813		105,284			107,277			4,166		111,443			-5.5	%
Segment Contribution Margin Subtotal	125,167			3,169		128,336			136,324			4,166		140,490			-8.7	%
Corporate (b)	(37,273)			2,910		(34,363)			(31,117)			2,141		(28,976)			-18.6	%
EBITDA (non-GAAP)	87,894			6,079		93,973			105,207			6,307		111,514			-15.7	%
Add: Stock-based compensation	2,295			-		2,295			3,629			-		3,629			-36.8	%
Add: Compensation charge related to NQDC Plan investment appreciation	1,850			-		1,850			1,135			-		1,135			63.0	%
Adjusted EBITDA (non-GAAP) (c)	$	92,039		$	6,079	$	98,118		$	109,971		$	6,307	$	116,278		-15.6	%

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	Six Months Ended

	December 28, 2025			Restructuring Cost / Severance		As Adjusted (non-GAAP) December 28, 2025			December 29, 2024			System Implementation Costs		As Adjusted (non-GAAP) December 29, 2024			% Change

	(dollars in thousands)
Net revenues:
Consumer Floral & Gifts	$	296,675		$	-	$	296,675		$	369,529		$	-	$	369,529		-19.7	%
BloomNet	45,249			-		45,249			45,912			-		45,912			-1.4	%
Gourmet Foods & Gift Baskets	575,773			-		575,773			602,457			-		602,457			-4.4	%
Corporate	157			-		157			202			-		202			-22.3	%
Intercompany eliminations	(475)			-		(475)			(518)			-		(518)			8.3	%
Total net revenues	$	917,379		$	-	$	917,379		$	1,017,582		$	-	$	1,017,582		-9.8	%

Gross profit:
Consumer Floral & Gifts	$	116,501		$	-	$	116,501		$	152,217		$	-	$	152,217		-23.5	%
	39.3		%			39.3		%	41.2		%			41.2		%

BloomNet	22,297			-		22,297			23,152			-		23,152			-3.7	%
	49.3		%			49.3		%	50.4		%			50.4		%

Gourmet Foods & Gift Baskets	233,215			-		233,215			252,234			1,992		254,226			-8.3	%
	40.5		%			40.5		%	41.9		%			42.2		%

Corporate	215			-		215			309			-		309			-30.4	%
	136.9		%			136.9		%	153.0		%			153.0		%

Total gross profit	$	372,228		$	-	$	372,228		$	427,912		$	1,992	$	429,904		-13.4	%
	40.6		%			40.6		%	42.1		%			42.2		%

EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
Consumer Floral & Gifts	$	20,037		$	1,108	$	21,145		$	26,531		$	-	$	26,531		-20.3	%
BloomNet	12,099			248		12,347			14,301			-		14,301			-13.7	%
Gourmet Foods & Gift Baskets	90,113			1,813		91,926			95,024			5,079		100,103			-8.2	%
Segment Contribution Margin Subtotal	122,249			3,169		125,418			135,856			5,079		140,935			-11.0	%
Corporate (b)	(71,966)			2,910		(69,056)			(64,592)			3,008		(61,584)			-12.1	%
EBITDA (non-GAAP)	50,283			6,079		56,362			71,264			8,087		79,351			-29.0	%
Add: Stock-based compensation	4,607			-		4,607			6,108			-		6,108			-24.6	%
Add: Compensation charge related to NQDC Plan investment appreciation	4,202			-		4,202			2,873			-		2,873			46.3	%
Adjusted EBITDA (non-GAAP) (c)	$	59,092		$	6,079	$	65,171		$	80,245		$	8,087	$	88,332		-26.2	%

(a) Segment performance is measured based on segment contribution margin or segment Adjusted EBITDA, reflecting only the direct controllable revenue and operating expenses of the segments, both of which are non-GAAP measurements. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead, described above, depreciation and amortization, other expense (income), net, and other items that we do not consider indicative of our core operating performance.

(b) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive, and stock-based compensation, as well as changes in the fair value of the Company's NQDC Plan. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions are included within corporate expenses as they are not directly allocable to a specific segment.

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Free Cash Flow

We define free cash flow as net cash provided by (used in) operating activities, less capital expenditures. The Company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of fixed assets, which can then be used to, among other things, invest in the Company’s business, make strategic acquisitions, strengthen the balance sheet, and repurchase stock or retire debt. Free cash flow is a liquidity measure that is frequently used by the investment community in the evaluation of similarly situated companies. Since free cash flow is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company's cash balance for the period.

The following table reconciles net cash provided by operating activities, a GAAP measure, to free cash flow, a non-GAAP measure:


	Six Months Ended
	December 28, 2025		December 29, 2024

	(in thousands)
Net cash provided by operating activities	$	170,909	$	151,307
Capital expenditures	(14,290)		(23,023)
Free cash flow	$	156,619	$	128,284

Results of Operations

Net revenues


	Three Months Ended						Six Months Ended
	December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		% Change

	(dollars in thousands)
Net revenues:
E-Commerce	$	595,666	$	677,326	-12.1	%	$	764,680	$	870,500	-12.2	%
Other	106,513		98,166		8.5	%	152,699		147,082		3.8	%
Total net revenues	$	702,179	$	775,492	-9.5	%	$	917,379	$	1,017,582	-9.8	%

Net revenues consist primarily of the selling price of the merchandise, service and outbound shipping charges, less discounts, returns and credits.

Net revenues decreased 9.5% and 9.8% during the three and six months ended December 28, 2025, respectively, mainly due to a focus on marketing effectiveness and profitability being prioritized over near-term revenue growth, offset in part by increased wholesale volume.

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	Three Months Ended
	Consumer Floral & Gifts						BloomNet						Gourmet Foods & Gift Baskets						Corporate and Eliminations				Consolidated
	December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024		% Change

	(dollars in thousands)
Net revenues
E-commerce	$	179,534	$	232,514	-22.8	%	$	-	$	-	-	%	$	416,132	$	444,812	-6.4	%	$	-	$	-	$	595,666	$	677,326	-12.1	%
Other	1,711		1,835		-6.8	%	22,124		22,837		-3.1	%	82,857		73,642		12.5	%	(179)		(148)		106,513		98,166		8.5	%
Total net revenues	$	181,245	$	234,349	-22.7	%	$	22,124	$	22,837	-3.1	%	$	498,989	$	518,454	-3.8	%	$	(179)	$	(148)	$	702,179	$	775,492	-9.5	%

Other revenues detail
Retail and other	1,711		1,835		-6.8	%	-		-		-		5,263		4,559		15.4	%	-		-		6,974		6,394		9.1	%
Wholesale	-		-		-	%	8,563		8,571		-0.1	%	77,594		69,083		12.3	%	-		-		86,157		77,654		10.9	%
BloomNet services	-		-		-	%	13,561		14,266		-4.9	%	-		-		-		-		-		13,561		14,266		-4.9	%
Corporate	-		-		-	%	-		-		-		-		-		-		89		113		89		113		-21.2	%
Eliminations	-		-		-	%	-		-		-		-		-		-		(268)		(261)		(268)		(261)		-2.7	%
Total other revenues	$	1,711	$	1,835	-6.8	%	$	22,124	$	22,837	-3.1	%	$	82,857	$	73,642	12.5	%	$	(179)	$	(148)	$	106,513	$	98,166	8.5	%


	Six Months Ended
	Consumer Floral & Gifts						BloomNet						Gourmet Foods & Gift Baskets						Corporate and Eliminations				Consolidated
	December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		December 28, 2025		December 29, 2024		% Change

	(dollars in thousands)
Net revenues
E-commerce	$	293,620	$	366,058	-19.8	%	$	-	$	-	-	%	$	471,060	$	504,442	-6.6	%	$	-	$	-	$	764,680	$	870,500	-12.2	%
Other	3,055		3,471		-12.0	%	45,249		45,912		-1.4	%	104,713		98,015		6.8	%	(318)		(316)		152,699		147,082		3.8	%
Total net revenues	$	296,675	$	369,529	-19.7	%	$	45,249	$	45,912	-1.4	%	$	575,773	$	602,457	-4.4	%	$	(318)	$	(316)	$	917,379	$	1,017,582	-9.8	%

Other revenues detail
Retail and other	3,055		3,471		-12.0	%	-		-		-		7,183		6,343		13.2	%	-		-		10,238		9,814		4.3	%
Wholesale	-		-		-	%	19,539		18,683		4.6	%	97,530		91,672		6.4	%	-		-		117,069		110,355		6.1	%
BloomNet services	-		-		-	%	25,710		27,229		-5.6	%	-		-		-		-		-		25,710		27,229		-5.6	%
Corporate	-		-		-	%	-		-		-		-		-		-		157		202		157		202		-22.3	%
Eliminations	-		-		-	%	-		-		-		-		-		-		(475)		(518)		(475)		(518)		8.3	%
Total other revenues	$	3,055	$	3,471	-12.0	%	$	45,249	$	45,912	-1.4	%	$	104,713	$	98,015	6.8	%	$	(318)	$	(316)	$	152,699	$	147,082	3.8	%

Revenue by sales channel:

E-commerce revenues (combined online and telephonic) decreased 12.1% and 12.2% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year, primarily due to the decline in demand across our segments.

During the three and six months ended December 28, 2025, the Company fulfilled approximately 6.2 million and 8.2 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of 16.4% and 16.0% compared to the same periods of the prior year. During the three and six months ended December 28, 2025, the average order value increased 5.2% and 4.6% to $96.82 and $92.88, respectively, compared to the same periods of the prior year.

Other revenues are comprised of the Company’s BloomNet® segment, as well as the wholesale and retail channels of its Consumer Floral & Gifts and Gourmet Foods & Gift Baskets segments.

Other revenues during the three and six months ended December 28, 2025 increased 8.5% and 3.8%, respectively, compared to the same periods of the prior year, primarily due to higher wholesale volume within the Gourmet Foods & Gift Baskets segment due to increased orders from big box retailers.

Revenue by segment:

Consumer Floral & Gifts – this segment, which includes the operations of the 1-800-Flowers.com®, Personalization Mall®, and Things Remembered®, derives revenue from the sale of consumer floral products and gifts through its e-commerce sales channels (telephonic and online sales), retail stores, and royalties from its franchise operations.

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Net revenues decreased 22.7% and 19.7% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year due to a focus on marketing effectiveness and profitability being prioritized over near-term revenue growth.

During the three and six months ended December 28, 2025, Consumer Floral & Gifts orders through the Company's e-commerce sales channel (online and telephonic sales) decreased 26.0% and 23.0%, respectively, compared to the same periods of the prior year. In addition, during the three and six months ended December 28, 2025, the average order value increased 4.4% and 4.1%, respectively, compared to the same periods of the prior year.

BloomNet® - revenues in this segment are derived from membership fees, as well as other product and service offerings.

Net revenues decreased 3.1% and 1.4% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year. The revenue decrease was primarily due to lower membership and transaction revenues primarily from lower network order volumes and lower directory revenue.

Gourmet Foods & Gift Baskets - this segment includes the operations of Harry & David®, Wolferman’s Bakery®, Cheryl’s Cookies®, The Popcorn Factory®, 1-800-Baskets.com®/DesignPac®, Shari’s Berries®, Vital Choice®, and Scharffen Berger®. Revenue is derived from the sale of gourmet fruits, cookies, baked gifts, premium chocolates and confections, gourmet popcorn, gift baskets, dipped berries, prime steaks, chops, and fish, through the Company’s e-commerce sales channels (telephonic and online sales) and company-owned and operated retail stores under the Harry & David and Cheryl’s Cookies brand names, as well as wholesale operations.

Net revenues within this segment decreased 3.8% and 4.4% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year, primarily due to lower e-commerce revenue due to a focus on marketing effectiveness and profitability being prioritized over near-term revenue growth partially offset by higher wholesale volume due to increased orders from big box retailers.

During the three and six months ended December 28, 2025, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 8.6% and 8.7%, respectively, compared to the same periods of the prior year. In addition, the average order value for the three and six months ended December 28, 2025 increased 2.4% and 2.3%, respectively, compared to the same periods of the prior year.

Gross profit


	Three Months Ended								Six Months Ended
	December 28, 2025			December 29, 2024			% Change		December 28, 2025			December 29, 2024			% Change

	(dollars in thousands)

Gross profit	$	295,466		$	335,593		-12.0	%	$	372,228		$	427,912		-13.0	%
Gross profit %	42.1		%	43.3		%			40.6		%	42.1		%

Gross profit consists of net revenues less cost of revenues, which is comprised primarily of florist fulfillment costs (fees paid directly to florists), the cost of floral and non-floral merchandise sold from inventory or through third parties, and associated costs, including inbound and outbound shipping charges. Additionally, cost of revenues includes labor and facility costs related to direct-to-consumer and wholesale production operations, as well as payments made to sending florists related to order volume referred through the Company’s BloomNet network.

Gross profit decreased 12.0% and 13.0% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year, primarily due to lower revenues as noted above.

During the three and six months ended December 28, 2025, the gross profit percentage decreased 120 basis points and 150 basis points, respectively, compared to the same periods of the prior year. The gross profit percentage declines were across all segments.

Consumer Floral & Gifts segment - Gross profit decreased by 26.0% and 23.5% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year, due to the impact of the lower revenues

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noted above, as well as unfavorable gross profit percentage primarily attributable to deleveraging on the sales decline and increased tariffs and commodity costs.

BloomNet® segment - Gross profit decreased by 3.1% and 3.7% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year, due to the impact of the lower revenues noted above. The decline for the six months ended December 28, 2025, was also due to an unfavorable gross profit percentage primarily due to higher florist fulfillment costs and a less favorable mix between wholesale and service revenue.

Gourmet Foods & Gift Baskets segment - Gross profit decreased by 6.3% and 7.5% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year, due to the decrease in revenue noted above, as well as unfavorable gross profit percentage primarily attributable to deleveraging on the sales decline and increased tariff, commodity, and shipping costs.

Marketing and sales expense


	Three Months Ended								Six Months Ended
	December 28, 2025			December 29, 2024			% Change		December 28, 2025			December 29, 2024			% Change

	(dollars in thousands)

Marketing and sales	$	156,068		$	187,003		-16.5	%	$	225,173		$	269,100		-16.3	%
Percentage of net revenues	22.2		%	24.1		%			24.5		%	26.4		%

Marketing and sales expense consists primarily of advertising and promotional expenditures, catalog costs, online portal and search costs, retail store and fulfillment operations (other than costs included in cost of revenues) and customer service center expenses, as well as the operating expenses of the Company’s departments engaged in marketing, selling and merchandising activities.

Marketing and sales expenses decreased 16.5% and 16.3% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year and also decreased as a percentage of revenues, primarily due to a focus on marketing effectiveness and profitability.

Technology and development expense


	Three Months Ended								Six Months Ended
	December 28, 2025			December 29, 2024			% Change		December 28, 2025			December 29, 2024			% Change

	(dollars in thousands)

Technology and development	$	14,438		$	15,973		-9.6	%	$	28,588		$	31,612		-9.6	%
Percentage of net revenues	2.1		%	2.1		%			3.1		%	3.1		%

Technology and development expense consists primarily of payroll and operating expenses of the Company’s information technology group, costs associated with its websites, including hosting, design, content development, and maintenance and support costs related to the Company’s order entry, customer service, fulfillment, and database systems.

Technology and development expense decreased by 9.6% during both the three and six months ended December 28, 2025, compared to the same periods of the prior year, primarily due to the prior year period including costs related to a new customer service platform and order management system.

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General and administrative expense


	Three Months Ended								Six Months Ended
	December 28, 2025			December 29, 2024			% Change		December 28, 2025			December 29, 2024			% Change

	(dollars in thousands)

General and administrative	$	37,066		$	27,410		35.2	%	$	68,184		$	55,936		21.9	%
Percentage of net revenues	5.3		%	3.5		%			7.4		%	5.5		%

General and administrative expense consists of payroll and other expenses in support of the Company’s executive, finance and accounting, legal, human resources and other administrative functions, as well as professional fees and other general corporate expenses.

General and administrative expenses increased 35.2% and 21.9% during the three and six months ended December 28, 2025, respectively, compared to the same periods of the prior year, primarily due to higher professional fees, and changes in the value of the Company's NQDC Plan investments (offset in Other income, net below), as well as severance costs related to an enterprise reduction in workforce.

Depreciation and amortization expense


	Three Months Ended								Six Months Ended
	December 28, 2025			December 29, 2024			% Change		December 28, 2025			December 29, 2024			% Change

	(dollars in thousands)

Depreciation and amortization	$	13,569		$	14,130		-4.0	%	$	26,471		$	27,168		-2.6	%
Percentage of net revenues	1.9		%	1.8		%			2.9		%	2.7		%

Depreciation and amortization expenses decreased 4.0% and 2.6% during the three and six months ended December 28, 2025, respectively, due to timing of certain assets becoming fully depreciated.

Interest income


	Three Months Ended						Six Months Ended
	December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		% Change

	(dollars in thousands)

Interest income	$	(122)	$	(484)	-74.8	%	$	(433)	$	(1,144)	-62.2	%

Interest income consists of income earned on the Company’s available cash balances.

Interest income decreased 74.8% and 62.2% during the three and six months ended December 28, 2025, respectively, due to a decline in interest earned on lower available cash balances.

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Interest expense


	Three Months Ended						Six Months Ended
	December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		% Change

	(dollars in thousands)

Interest expense	$	6,208	$	4,880	27.2	%	$	10,829	$	8,900	21.7	%

Interest expense consists primarily of interest expense and amortization of deferred financing costs attributable to the Company’s credit facilities (See Note 10 - Long-term debt, net, Item 1 for details).

Interest expense increased 27.2% and 21.7% during the three and six months ended December 28, 2025, respectively, due to an increase in borrowings and interest rates.

Other income, net


	Three Months Ended						Six Months Ended
	December 28, 2025		December 29, 2024		% Change		December 28, 2025		December 29, 2024		% Change

	(dollars in thousands)

Other income, net	$	(1,871)	$	(1,164)	60.7	%	$	(4,218)	$	(2,931)	43.9	%

Other income, net consists primarily of investment losses (gains) on the Company’s NQDC Plan investments (for which the offsetting expense was recorded in general and administrative expense above).

Income Taxes

The Company recorded an income tax benefit of $0.4 million and income tax expense of $38.0 thousand during the three and six months ended December 28, 2025, respectively, compared to income tax expense of $23.5 million and $9.1 million during the three and six months ended December 29, 2024, respectively. The Company’s effective tax rate for the three and six months ended December 28, 2025 was (0.6)% and 0.2%, respectively, compared to 26.7% and 23.2% in the same respective periods of the prior year. The Company’s effective tax rate for the three and six months ended December 28, 2025 differed from the U.S. federal statutory rate of 21.0% primarily due to the change in valuation allowance, state income taxes and interest on uncertain tax positions. The Company’s effective tax rate for the three and six months ended December 29, 2024 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes, tax deficiencies (shortfalls) from stock-based compensation and increases in valuation allowances, partially offset by tax credits.

Liquidity and Capital Resources

Liquidity and borrowings

The Company's principal sources of liquidity are cash on hand, cash flows generated from operations, and borrowings available under the Company’s credit agreement (see Note 10 – Long-term debt, net in Item 1 for details). At December 28, 2025, the Company had working capital of $84.5 million, including cash and cash equivalents of $193.3 million, compared to working capital of $61.3 million, including cash and cash equivalents of $46.5 million, at June 29, 2025.

Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s second fiscal quarter, is expected to generate over 40% of the Company’s annual revenues, and all of its earnings. Due to the number of major floral gifting occasions, including Mother’s Day, Valentine’s Day, Easter, and Administrative Professionals Week, revenues also have historically risen during the Company’s fiscal third and fourth quarters in comparison to its fiscal first quarter.

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During the first two quarters of fiscal 2026, the Company borrowed under its revolving credit facility in order to fund pre-holiday manufacturing and inventory procurement requirements, with borrowings peaking at $175.0 million in November 2025. Cash generated from operations during the Christmas holiday shopping season enabled the Company to repay the borrowings under the revolving credit facility in December 2025. Based on current projected cash flows, the Company believes that the available cash balances will be sufficient to provide for the Company's operating needs through the remainder of fiscal 2026, at which time the Company would again expect to borrow against the revolving credit facility to fund pre-holiday manufacturing and inventory purchases. The Company had no amounts outstanding under the revolving credit facility as of December 28, 2025.

While we believe that our sources of funding will be sufficient to meet our anticipated operating cash needs for at least the next twelve months, any projections of future cash needs and cash flows are subject to substantial uncertainty. We continually evaluate, and will, from time to time, consider the acquisition of, or investment in, complementary businesses, products, services, capital infrastructure, and technologies, which might affect our liquidity requirements or cause us to require additional financing.

Cash Flows

Net cash provided by operating activities of $170.9 million, for the six months ended December 28, 2025, was primarily attributable to net income during the period, adjusted by non-cash charges for depreciation and amortization and stock based compensation, combined with seasonal changes in working capital, including increases in accounts payable and accrued expenses and trade receivables and a decrease in inventory.

Net cash used in investing activities of $14.3 million, for the six months ended December 28, 2025, was primarily attributable to capital expenditures related to the Company's technology initiatives.

Net cash used in financing activities of $9.8 million, for the six months ended December 28, 2025, primarily related to net repayment of bank borrowings under the Company's working capital line of credit, as well as payments made on the Company's Term Loan.

Free Cash Flow

Free cash flow was $156.6 million for the six months ended December 28, 2025, compared with free cash flow of $128.3 million for the six months ended December 29, 2024. The improvement of $28.3 million was primarily due to improved working capital management, coupled with favorable timing. Refer to "Definitions of non-GAAP Financial Measures" for reconciliation of non-GAAP results to applicable GAAP results.

Stock Repurchase Program

See Item 2 in Part II below for details.

Contractual Obligations

At December 28, 2025, the Company’s contractual obligations consist of:

•Long-term debt obligations - payments due under the Company's credit agreement (see Note 10 – Long-term debt, net in Item 1 for details and payments due by period).

•Operating lease obligations - payments due under the Company’s long-term operating leases (see Note 8 – Leases in Item 1 for details).

•Purchase commitments - consisting primarily of inventory and IT-related equipment purchase orders and license agreements made in the ordinary course of business – see below for the contractual payments due by period.


	Payments due by period
	(in thousands)
	Remaining Fiscal 2026		Fiscal 2027		Fiscal 2028		Fiscal 2029		Fiscal 2030		Thereafter		Total
Purchase commitments	$	49,285	$	15,131	$	6,506	$	3,915	$	88	$	—	$	74,925

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Critical Accounting Estimates

As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2025, the discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances, and management evaluates its estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. The Company’s most critical accounting policies relate to goodwill and other intangible assets. There have been no significant changes to the assumptions and estimates related to the Company’s critical accounting policies since June 29, 2025.

Recently Issued Accounting Pronouncements

See Note 1 - Accounting Policies in Item 1 for details regarding the impact of accounting standards that were recently issued on our consolidated financial statements.

Forward Looking Information and Factors that May Affect Future Results

Our disclosure and analysis in this report contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company’s current expectations or forecasts concerning future events and can generally be identified by the use of statements that include words such as “anticipate,” “estimate,” “expects,” “project,” “intend,” “plan,” “believe,” “foresee,” “forecast,” “likely,” "should," “will,” “goal,” “target,” or similar words or phrases. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements, including, but not limited to:

•the Company’s ability:

•to achieve revenue and profitability;

•to leverage its operating platform and reduce its operating expense ratio;

•to manage the seasonality of its business;

•to cost effectively acquire and retain customers and drive purchase frequency;

•to successfully integrate acquired businesses and assets;

•to reduce working capital requirements and capital expenditures;

•to mitigate the impact of supply chain cost and capacity constraints;

•to compete against existing and new competitors;

•to manage expenses associated with sales and marketing and necessary general and administrative and technology investments;

•to address the effects of changes in accounting policies, practices, or assumptions, including changes that could potentially require future impairment charges;

•to successfully execute its strategic priorities; and

•to reduce promotional activities and achieve more efficient marketing programs;

•the outcome of contingencies, including legal proceedings in the normal course of business; and

•general consumer sentiment and economic conditions that may affect, among other things, the levels of discretionary customer purchases of the Company’s products and the costs of shipping, imported products, and labor.

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties, and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated, or projected. Investors should bear this in mind as they consider forward-looking statements.

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We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Forms 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission. Our Annual Report on Form 10-K for the fiscal year ended June 29, 2025 listed various important factors that could cause actual results to differ materially from expected and historic results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. Readers can find them in Part I, Item 1A, of that filing under the heading “Cautionary Statements Under the Private Securities Litigation Reform Act of 1995”. We incorporate that section of that Form 10-K in this filing and investors should refer to it. In addition, please refer to any additional risk factors in Part II, Item 1A in this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

The Company is exposed to market risk from the effect of interest rate changes, which relates primarily to the Company’s investment of available cash balances and its long-term debt. The Company generally invests its cash and cash equivalents in investment grade corporate and U.S. government securities. Borrowings under the Company’s credit facilities bear interest at a variable rate, plus an applicable margin, and therefore expose the Company to market risk for changes in interest rates. The effect of a 50 basis point increase in current interest rates on the Company’s interest expense would have been approximately $0.4 million and $0.7 million during the three and six months ended December 28, 2025, respectively.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of December 28, 2025. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have each concluded that the Company’s disclosure controls and procedures were effective as of December 28, 2025.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the Company’s evaluation required by Rules 13a-15(d) or 15d-15(d) of the Securities Exchange Act of 1934 during the quarter ended December 28, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, as specified above. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.

PART II. – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Litigation

ITEM 1A. RISK FACTORS

There were no material changes to the Company’s risk factors as discussed in Part 1, Item 1A - Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2025.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company has a stock repurchase plan through which purchases can be made from time to time in the open market and through privately negotiated transactions, subject to general market conditions. The repurchase program is financed utilizing available cash. On April 22, 2021, the Company’s Board of Directors authorized an increase to its stock repurchase plan of up to $40.0 million. In addition, on February 3, 2022, the Company’s Board of Directors authorized an increase to its stock repurchase plan of up to $40.0 million. As of December 28, 2025, $10.6 million remained authorized under the plan.

The following table sets forth, for the months indicated, the Company’s purchase of common stock during the three months ended December 28, 2025:


Period	Total Number of Shares Purchased	Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

	(in thousands, except shares and average price paid per share)

09/29/25 - 10/26/25	-	$	-	-	$	11,268
10/27/25 - 11/23/25	119,090	$	3.42	119,090	$	10,860
11/24/25 - 12/28/25	57,600	$	4.31	57,600	$	10,612
Total	176,690	$	3.71	176,690

(1)Average price per share excludes commissions and other transaction fees.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Plans

During the three months ended December 28, 2025, none of the directors or executive officers adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-rule 10b5-1 trading arrangement", as defined in Item 408 of Regulation S-K.

1 800 FLOWERS COM INC 10-Q