1-800-FLOWERS.COM, Inc.

Good day and welcome to the 1-800-Flowers.com, Inc. 2023 First Quarter Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. 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 Andy Millivoy, Senior Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us on 1-800-Flowers.com's fiscal 2023 first quarter earnings call. For those of you who have not received a copy of our press release issued this morning, the release can be accessed at the investor section of our corporate website at www.1800flowersinc.com. We will begin today's call with brief formal remarks, and then we will open the call to your questions. Joining us today are Chris McCann, CEO, Tom Hartnett, President, and Bill Shea, CFO. Before we begin, I need to remind everyone that some of the statements we will make on today's call 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 Form 10-K and Form 10-Q reports. In addition, 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 as may be otherwise stated by the company. And now, I'll turn the call over to Chris McCann.

Chris McCann Thank you, everyone, and good morning. Before I begin my formal remarks on the quarter, I wanted to take this opportunity to congratulate Joe Petito on his upcoming retirement this December and to thank him for his more than two decades of tireless commitment to our company during a period of our company's tremendous growth and transformation. Joe's been a tremendous asset to our company, and his drive and passion for telling our growth story have been invaluable to us. We wish Joe all the best upon his retirement, and good luck, Joseph. I also wanted to take this opportunity to introduce Andy Millivoy, who joined our company as SVP of Investor Relations in September. So thank you again, Joe, and welcome, Andy. Thank you. And now let's review our results. As we noted in this morning's press release, our first quarter results were slightly better than our expectations. Overall, consumer behavior continues to reflect the significant inflationary pressures in the macroeconomy that are affecting both discretionary and non-discretionary spending. This reflects a continuation of the trends that we saw beginning last December. Our first quarter revenues declined 1.9% as we saw consumers purchasing fewer everyday gifts. We experienced softness in our consumer floral and gift business, which was somewhat offset by the growth of our gourmet foods and gift baskets business. By adding value and choice to our higher price point gift baskets, we encouraged customers to trade up in assortments and we strategically managed pricing. This resulted in an increase in average order value in our gourmet food and gift basket business. We were also encouraged by the year-over-year rebound in our wholesale business. By getting ahead of the supply chain challenges from last year, our team was able to build and deliver gift assortments to our wholesale customers earlier than a year ago. This enabled our wholesale business to increase market share. During the quarter, we added more than 775,000 new customers and existing customers represented 70% of total revenue. Now let's turn to what we see ahead. As we look forward to the holiday season and the balance of our fiscal year, we are cautiously optimistic that consumers will continue to spend on the major gift-giving holiday occasions, but we anticipate that they will remain cautious in their spending otherwise. During last year's holiday season, consumers were urged to shop much earlier in the period in response to supply chain constraints, which led to an unprecedented pull forward of business. This year we expect the consumers will shop later in the holiday and that it will be promotional. We're already seeing an extremely competitive and promotional environment with many companies promoting Black Friday-like events in early October. And in contrast to a year ago when most retailers struggled to get inventory on containers and through shipping ports, today many companies are flush with excess inventory and are being highly promotional to sell through that inventory. Not surprisingly, as we look at our customer base, customers in the lower income tier appear to be most affected. As consumers continue to respond to these macro pressures, our platform provides us the ability to offer customers a wide range of attractive price points for gifts to help them build better relationships in their lives. This includes our good, better, best offerings from 1-800-Flowers, our attractive entry price points from the personalization mall, and adding additional value offerings at Harry and David. Recognizing the strong consumer response to our bundled offerings, we've launched additional bundles this year that combine some of our best products, like our famous Royal Riviera pears and Cheryl's Holiday Cookie Collection. We are pairing our award-winning Harry and David wines with flowers from 1-800-Flowers, cookies from Cheryl's Cookies, and wild-caught seafood from Vital Choice. And at Personalization Mall, following the success of our Easter bundles, we've developed food products to bundle with our personalized Halloween trick-or-treat bags and Christmas mailbox tins. Additionally, we're always looking to expand our reach into new categories where we have identified customer trends. One of our goals as we grow our better-for-you selections is to have more options available for a wide variety of customers with dietary preferences or restrictions, such as our expanded organic and gluten-free selections. This includes our new line of Cheryl's vegan cookies. From a marketing perspective, our efforts are focused on developing and growing our multi-category customer cohort to increase purchase frequency and define our company as to the preferred destination for all of our customers' gifting needs. As could be expected, Net sales per customer are highest among our multi-category customers, followed by our celebrations passport members. We're utilizing innovative social and mobile technology to engage with our customers, including the use of video and engaging creative content, and we have expanded our content and influencer partnerships. As a result of these efforts, we are much better positioned to engage with our customers and be top of mind for the holiday season. This also enables us to reduce our reliance on more expensive forms of advertising and allocate more of our marketing dollars to the other areas of the funnel that provide a higher return on investment. Speaking of cost containment efforts, in addition to reducing our marketing spend on a dollar basis, we also expect ocean freight and commodities costs to decline throughout the year. In fact, ocean freight rates are already significantly lower today than they were during the second half of fiscal 22. We have also taken strategic actions to partially offset our labor and shipping costs. First, we increased the automation of our distribution facilities in Medford, Oregon, Hebron, Ohio, and more recently Atlanta, Georgia, which increases throughput at those facilities while reducing our reliance on seasonal labor. Second, as part of our efforts to optimize logistics, we've also strategically reduced shipping zones by shipping products to facilities that are closer to recipients enabling us to use a lower cost shipping method without impacting the speed at which we can deliver those smiles. We have also strategically built inventories of non-perishable items to get ahead of the global supply chain disruptions, ensuring that we have the products that are needed for the holiday season. As we sell through that inventory this fiscal year, we expect free cash flow to improve more than $135 million this year compared with last year, benefiting in large part from the working capital reduction as well as lower capital expenditures. While the current macro environment remains uncertain, I'm extremely proud of our team's efforts to address and influence the areas within our control. As we look ahead, our entire organization is focused on executing our key strategic priorities that position us as a leading gift-giving e-commerce platform. We have made significant strides in transitioning our company and our all-star family of brands into a platform that is focused on inspiring our customer community to give more, connect more, and build more and better relationships. We have proven our ability to identify, execute, and integrate accretive acquisitions that benefit from being on our platform, which drives accelerated revenue growth and enhanced profit contributions from those businesses. And in turn, we have created a highly scalable platform that enables solid top and bottom line long-term growth and expanding market share positions. We expect our margins to begin to improve in the second half of this year and even more so next year. As these costs continue to decline and our margins return to their historical levels over the next few years, we expect to see a substantial increase in EBITDAF. Looking beyond the current horizon, we are confident that we are positioned to emerge a bigger, better, and stronger company and in turn build shareholder value over the long term. Now let me turn the call over to Bill to his review of some of the key financial metrics for the quarter. Bill?