10-K: 1-800-Flowers.com Reports FY26 Results, Faces Revenue Decline

1-800-Flowers.com, Inc. filed its Form 10-K for the fiscal year ended June 28, 2026, detailing a 10.8% decrease in net revenues to $1.5 billion and a net loss of $134.8 million.

Summary

• 1-800-Flowers.com, Inc. reported its fiscal year 2026 results, showing a 10.8% decrease in net revenues to $1,503.5 million compared to fiscal year 2025.
• The company experienced a net loss of $134.8 million for fiscal year 2026, an improvement from the $199.9 million net loss in fiscal year 2025.
• Adjusted EBITDA for fiscal year 2026 was $2.9 million, a significant decrease from $29.2 million in fiscal year 2025.
• The company recorded a non-cash goodwill and intangible impairment charge of $45.2 million in fiscal year 2026, primarily related to its Consumer Floral & Gifts reporting unit.
• Acquisitions of Card Isle and Scharffen Berger were completed in fiscal year 2024, with their financial impact deemed immaterial to the consolidated statements.
• The company's strategy in fiscal year 2026 focused on marketing effectiveness and profitability over near-term revenue growth.
• Free cash flow was negative $13.0 million for fiscal year 2026, an improvement from negative $67.8 million in fiscal year 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to significant revenue declines, substantial net losses, and considerable goodwill and intangible asset impairments, despite efforts to streamline operations.

Positives

• Net loss improved to $134.8 million in fiscal year 2026 from $199.9 million in fiscal year 2025.
• Free cash flow improved significantly to negative $13.0 million in fiscal year 2026 from negative $67.8 million in fiscal year 2025.
• The company completed acquisitions of Card Isle and Scharffen Berger, expanding its product offerings.
• Focus on marketing effectiveness and profitability over near-term revenue growth aims to strengthen the business foundation for sustainable growth.
• The company's technology infrastructure and fulfillment capabilities are considered competitive advantages.

Negatives

• Net revenues decreased by 10.8% to $1,503.5 million in fiscal year 2026 compared to fiscal year 2025.
• Gross margins declined by 70 basis points to 38.0% in fiscal year 2026.
• Adjusted EBITDA decreased substantially to $2.9 million in fiscal year 2026 from $29.2 million in fiscal year 2025.
• A significant non-cash goodwill and intangible impairment charge of $45.2 million was recorded in fiscal year 2026.
• The company reported a net loss of $134.8 million for fiscal year 2026.
• Negative free cash flow of $13.0 million was reported for fiscal year 2026.
• Working capital was negative $17.8 million at June 28, 2026.

Risks

• Macroeconomic conditions and consumer sentiment volatility can adversely affect spending patterns and business operations.
• Dependence on international vendors for supply exposes the company to regulatory, economic, and political risks.
• Increased shipping costs and supply chain disruptions may adversely affect sales and gross margins.
• Limited supply or price increases for flowers can negatively impact revenues and gross margins.
• Fluctuations in operating results due to seasonality and other factors can lead to performance below expectations.
• Failure to develop and maintain brands, or negative publicity, could damage reputation and reduce revenues.
• Cybersecurity threats and data breaches pose risks to customer trust, reputation, and financial condition.
• Failure to comply with privacy, data protection, and consumer protection laws could adversely affect business and financial condition.

Future Outlook

The company is focused on strengthening its foundation to drive sustainable, profitable growth. This includes modernizing digital and marketing capabilities, simplifying operations, and becoming a more customer-first, data-driven organization. The company expects to borrow under its revolving credit facility to fund pre-holiday manufacturing and inventory purchases in fiscal year 2027 and expects to repay these borrowings before the end of the second quarter of fiscal 2027. The company is also evaluating potential sale of non-strategic assets and other capital raising options to optimize its capital structure and support investments in its transformation.

Management Comments

• Fiscal 2026 was a year of meaningful progress as the Company strengthened the foundation of the business and positioned the Company for its next phase of transformation.
• Throughout the year, the Company strengthened the leadership team, began to modernize its digital and marketing capabilities, simplified its operations, and became a more customer-first, data driven organization.
• These actions strengthened the foundation of the business and better positioned the Company to drive sustainable, profitable growth over the long term.

Industry Context

StockSavvy.ai notes that the decline in revenue and profitability for 1-800-Flowers.com aligns with broader trends in the e-commerce and retail sectors, which have faced increased competition, shifting consumer spending habits, and inflationary pressures. The company's focus on profitability over revenue growth is a common strategy adopted by many companies in challenging economic environments.

Comparison to Industry Standards

• The company's revenue decline of 10.8% in fiscal year 2026 is steeper than the general e-commerce sector's performance, which has seen more moderate growth or stabilization after pandemic-driven surges.
• The significant goodwill and intangible asset impairments ($45.2 million in FY26, $143.8 million in FY25) suggest potential overvaluation of past acquisitions or a more severe downturn in specific business segments compared to industry peers who may have managed integration or valuation risks more effectively.
• The gross margin of 38.0% is within the typical range for online retail, but the decline indicates pressure from rising costs or inability to pass them on, a challenge faced across the industry.
• The net loss of $134.8 million and negative Adjusted EBITDA of $2.9 million indicate a more challenging financial performance compared to many established e-commerce players who have achieved profitability or positive EBITDA.

Legal Proceedings

• Various claims, lawsuits, and pending actions incident to the operations of its businesses are ongoing, but management believes their resolution will not have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity.

Stakeholder Impact

• Shareholders may experience continued stock price volatility due to the company's financial performance and market conditions.
• Employees may be impacted by workforce reductions and changes in company strategy.
• Customers may be affected by potential changes in product offerings or service levels, though the company aims to maintain customer relationships.
• Creditors may be impacted by the company's liquidity position and ongoing efforts to optimize its capital structure.

Next Steps

• Continue to modernize digital and marketing capabilities.
• Simplify operations.
• Focus on becoming a more customer-first, data-driven organization.
• Evaluate potential sale of non-strategic assets.
• Explore public or private debt or equity financings.
• Continue to borrow under the revolving credit facility for seasonal inventory needs and repay prior to end of Q2 fiscal 2027.

Key Dates

Recommendation

The company's persistent revenue declines, significant net losses, substantial asset impairments, and negative free cash flow, despite strategic initiatives, indicate ongoing financial distress. The need to explore capital raises and asset sales suggests a challenging path forward. While there are efforts to improve profitability, the current trajectory and market position warrant a cautious approach, leading to a sell recommendation.

Keywords

floral gifts, gourmet foods, gift baskets, e-commerce, online retail, customer relationships, brand management, supply chain