1-800-FLOWERS.COM, Inc.

Good day and welcome to the 10008000flowers.com Inc. 4 Year Q1 Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on a touch-tone phone. To answer your question, please press star then 2. Please note that this event is being recorded. I would like to turn the conference over to Joseph Petito. Please go ahead.

Good morning, and thank you for joining us today to discuss 1800flowers.com's financial results for our fiscal 2022 first quarter. For those of you who have not received a copy of our press release issued earlier this morning, the release can be accessed at the investor relations section of our corporate website at 1800flowersinc.com. Our call today will begin with brief formal remarks, and then we will open the call to your questions. Presenting today will be Chris McCann, CEO, and Bill Shea, CFO. Before we begin, I need to remind everyone that some of the statements we will make today may be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. For a detailed description of these risks and uncertainties, please refer to our press release issued this morning, as well as our SEC filings, including the company's annual report on Form 10-K and quarterly reports on Form 10-Q. In addition, this morning we will discuss certain supplemental financial measures that were not prepared in accordance with generally accepted accounting principles. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in the tables accompanying the company's press release issued this morning. The company expressly disclaims any intent or obligation to update any of the forward-looking statements made in today's call, any recordings of today's call, the press release issued earlier today, or any of its SEC filings, except as may be otherwise stated by the company. I'll now turn the call over to Chris McCann.

Thank you, Joe, and thank you to everyone for joining our call this morning. We are very pleased to kick off our fiscal 22-year with strong revenue growth in our first quarter. As we mentioned back in our August call, the first quarter this year represented one of our most challenging year-over-year comparisons. This reflects the year-ago period surge in overall e-commerce demand and Combined with the steep drop in marketing rates, as much of the country was still in lockdown during the early stages of the pandemic. It's important to note that our 9% revenue growth in the quarter was on top of the 51.5% growth we reported in last year's first quarter and represents growth of more than 65% compared with our fiscal 21st quarter. This illustrates the strong growth momentum that we have been building over the past several years as we have essentially doubled the size of our company, transforming from a collection of specialty brands into a unique e-commerce platform that inspires and enables our customers to express, connect, and to celebrate. As we had anticipated, the first quarter this year started out somewhat slowly in July and August, as people across the country took advantage of the warm summer weather to act on their long, pent-up desire to get out and about. As a result, we saw demand gradually ramp up as we headed toward back-to-school season, culminating in solid double-digit revenue growth throughout the month of September. This positive growth trend reflects the significantly increased recognition and relevance of our brands and our expanded product offerings for everyday gifting. For example, in our Harry & David brand, we saw double-digit revenue growth during the quarter in our sympathy, Thank You, and our new Encouragements collections, as well as continued strong growth for the award-winning Harry and David wines. In our consumer floral and gift segments, the double-digit revenue growth in the quarter was driven by the strong performance of Personalization Mall, along with continued growth in the 1-800-Flowers brand, including additional bundling of our best-selling floral arrangements with Shari's Berries products that are already proving to be customer favorites. In the expansion of our floral subscription programs, including additional frequency and duration options, along with a new self-service portal that allows customers to self-manage their subscriptions. In personalization mall, we further expanded our already broad product offering, adding more than 2,500 new items, including a new licensed personalized sports collection. During the quarter, Personalization Mall saw strong revenue growth for Halloween, back-to-school, travel gifts, and weddings, reflecting a strong rebound in those collections after being down last year due to the pandemic. We anticipate personalized gifts for travel and weddings to show strong growth throughout Fiscal 22. As we head toward the key holiday season, it's worth noting that Personalization Mall is in a uniquely strong position to meet growing demand from customers for the upcoming holiday season. We were able to stock up on our inventory items for personalization prior to the widely reported challenges that we see in the supply chain. In addition, we further expanded Personalization Mall's highly automated production and distribution facility to increase fulfillment. Another area where we've stepped up our efforts ahead of the holiday season is in corporate gifting, where we have further expanded our capabilities with the launch of our new Hero platform powered by SmartGift. We continue to see strong growth across our brands in corporate gifting as companies across the country look for ways to stay connected with their employees and their clients in the new hybrid workplace. The HERO platform is now embedded in our existing corporate gifting portal, providing an engagement as a service offering that helps companies achieve their rewards and recognition goals and gives them the ability to track their campaigns to measure their success and provide recommendations for future efforts. With the innovative Hero platform and our expanded product offering, we anticipate continued strong growth in our corporate gifting business for the holiday season. During the first quarter, we also continued to see strong growth in our customer file. We added 900,000 new customers while continuing to see strong demand from existing customers who represented more than 65% of our revenue during the quarter. We also saw continued strong growth in our Celebrations Passport loyalty program. This helps, as you know, to drive increased purchase frequency, retention, and lifetime value. Along with solid growth in new members, we saw a more than 50% year-over-year increase in customers, new and existing, using the Celebrations Passport program during the quarter. Celebrations Passport also continues to be one of the key drivers of strong growth in our best-performing customer cohort of multi-category, multi-brand customers, which increased more than 15% year-over-year during the quarter. In terms of customer engagement, we continue to see great engagement in our e-commerce channels worldwide. where we are doing more to allow our customers to watch and learn and not just shop. During the quarter, we reached nearly 20 million engagements, an increase of 75% over the prior year period and more than our entire fiscal 2020. We're doing this by creating more helpful content, social videos and events, recipes, cooking demonstrations, to name just a few examples. We're also providing tips of how people can better express themselves when sending a gift. This is a valuable role that we play to enhance the gifting process and cement relationships. Our opportunity as we go forward is to continue to take this great content and weave it into our experiences to better engage with our customers. And you'll see us do more and more of this throughout the fiscal year. Regarding our current fiscal second quarter, which includes the upcoming holiday season, we are cognizant of several significant headwinds impacting the overall retail landscape. I'll ask Bill to cover these and our initiatives to address them in his remarks in just a moment. With that said, we believe the combination of the positive trends in our business that I've just described, along with our unique business platform with our expanded product offering And the tremendous momentum that we've built over the past several years positions us well as our customers' destination for the solutions they need to connect, express, and celebrate with the important people in their lives. We are confident that this will enable us to drive strong growth in the current fiscal second quarter and achieve our guidance of double-digit revenue growth for the full fiscal year, on top of the tremendous growth that we saw in the prior year. Now, before I turn the call over to Bill, I'd really like to take a moment to welcome the team from Vital Choice to the 1-800-Flowers family. As we announced yesterday, we are excited to have acquired Vital Choice, a trusted provider of exceptional quality, premium, wild-caught seafood, and hundreds of other great Better For You products. This acquisition illustrates our focus on further expanding our offerings in the highly on-trend, better-for-you food and gifting category. We look forward to integrating Vital Choice into our great family of brands and using the strength of our business platform to accelerate its growth going forward. I'd now like to turn the call over to Bill.