1-800-FLOWERS.COM, Inc.

Good morning and welcome to the 1-800-Flowers.com fiscal 2022 second quarter conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Joe Petitto, Senior Vice President, Investor Relations and Corporate Communications. Please go ahead.

Good morning and thank you for joining us today to discuss 1800flowers.com's financial results for our fiscal 2022 second 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 www.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 in any of its SEC filings, except this may be otherwise stated by the company. I will now turn the call over to Chris McCann.

Chris McCann Thank you to everyone for joining our call this morning. As we reported in this morning's press release, we achieved solid revenue growth of 7.5 percent for our fiscal second quarter. This was on top of the 45 percent growth we reported in last year's fiscal second quarter and represents growth of more than 55% compared with the fiscal 2020 second quarter. For the quarter, we achieved top-line growth across our three business segments, highlighted by an increase of approximately 10% in our gourmet food and gift basket segment, driven by double-digit growth in our Harry and David brand. As we noted in our press release and comments at the end of October, we saw solid double-digit growth in September that carried through October. This continued into mid-November, driven by the success of our initiatives to drive everyday gifting, as well as early ordering by customers for the holiday season. Consumer demand slowed, however, after the Thanksgiving holiday and did not pick up again until late in the quarter. As a result, our total revenue growth for the quarter was below the double-digit pace that we had anticipated heading into the period. Nonetheless, our solid revenue growth on top of last year's tremendous increase reflects our continued focus on engaging with our customers to deepen our relationships with them, the continued expansion of our product offering, our ability to attract a significant number of new customers, the growth of our Celebrations Passport loyalty program, and our increasing ability to personalize our customers' experience using AI and machine learning. I'll come back to these topics in just a moment. But first, turning to our bottom line results for the quarter, Bill will provide more detail in his remarks in a few minutes. But as an overview, the macroeconomy headwinds that we had discussed back in October persisted and escalated significantly throughout the quarter. These headwinds include an unprecedented disruption to the global supply chain, limited availability and higher costs for labor, and increased costs from third-party shippers. As a result, our gross margins were impacted and our bottom line results came in below our expectations. While we anticipate that these headwinds will moderate over time, we expect they will not disappear in the quarters ahead. So, we will continue to invest in initiatives to mitigate their impact, such as the further automation of our warehouse and distribution facilities, bringing in inventory of products and components that we import earlier, pre-building inventory of non-perishable items, and implementing programs that can help us optimize our outbound shipping. Over the longer term, we anticipate these initiatives will enable us to improve our gross margins and drive enhanced bottom-line performance. Jumping back to a few of the customer-centric and top-line growth initiatives that I touched on earlier, we continue to lean into our initiatives focused on engaging with our customers to deepen our relationships and create a true community. As I've said in the past, we are a company that aims to inspire people to express themselves, connect with each other, and celebrate life's most important moments. One way we measure engagement is with the specific touch points that we have with customers through social channels, content, influencers, and video. Through the first half of fiscal 22, such programs created more than 55 million engagements. two times the number that we created in the same period last year. Throughout the holiday season, we work to integrate content into our shopping experiences, launching programs like What I Love About the Season and Our Favorite Holiday Memories that use video and storytelling to reinforce the importance of the holidays as a time to connect, express, and celebrate. We also launched a fun holiday recipe series featuring both celebrity chefs and influencers culminating with our holiday bake-off program that attracted more than a million views on Facebook. And as we announced earlier this month, we added Alice's Table to our platform, featuring fully digital interactive classes for designing floral arrangements, creating charcuterie boards, hosting wine tastings, and other unique experiences. Since we began offering these classes, more than 80,000 people have enjoyed the opportunity to celebrate their creative capabilities and have some fun doing so, perfectly illustrating our engagement strategy. During the second quarter, we also continued to expand our product offerings with our newest acquisition, Vital Choice, further expanding our offerings in our highly on-trend, better-for-you gourmet food category. With the holiday behind us now, we will work to fully integrate Vital Choice into our platform. We continue to expand our collection of bundled products, putting together some of our great brands to create truly unique gifts such as Harry and David's signature Royal Riviera pears with Cheryl's Cookies and Sherry's Berries with beautiful holiday bouquets from 1-800-Flowers. And we expanded our 1-800-Flowers and Sherry's Berries subscription programs providing the ability for customers to tailor their subscription to their needs. Now, the combination of these initiatives in engagement and product expansion helped us add more than 1.8 million new customers during the quarter. And importantly, existing customers represented more than 66 percent of total revenues in the quarter, up more than 400 basis points compared with the prior year period. And we saw double-digit growth in our best-performing customer cohort, those that buy from multiple product categories and multiple brands. This reflects the benefits of our cross-merchandising programs and our initiatives using AI and machine learning to provide more personalized experience for customers when they shop on our platform. We also continue to see strong growth in our Celebrations Passport loyalty program, which added more than 350,000 new members during the quarter, and continues to be a key driver of purchase frequency retention and lifetime value. As we recently announced, we've significantly enhanced the Celebrations Passport program, adding a tiered points-based system that enables members to unlock additional perks and benefits beyond standard free shipping. Some of these perks include invitations to exclusive special events, early access to new products and collections, complimentary birthday gifts and order upgrades, and discounted membership renewal. These enhancements are designed to reward our best customers with our thoughtfulness, develop a sense of community among Passport members, and capture more first-party data to help us offer our customers a more personalized experience. In addition to these enhancements, we have also launched the Celebrations Passport app, our first multi-brand app that is designed as a destination for members to manage membership details, as well as access trending products, engaging content, helpful tools, and much more. The Celebrations app will serve as a single entryway to our brands, and we are very excited about its ability to significantly enhance customer experience. Now I'd like to turn the call to Bill.