1-800-FLOWERS.COM, Inc. Reports Results for Its Fiscal 2017 Third Quarter

• Total revenues were $233.7 million compared with $234.2 million in
  the prior year period. Strong growth of 10.2 percent and 7.0 percent
  in the Company’s Consumer Floral and BloomNet segments, respectively,
  was offset by lower year-over-year revenues in its Gourmet Food and
  Gift Baskets segment due primarily to the shift of the Easter holiday
  into the Company’s fiscal fourth quarter.
• EBITDA, excluding stock-based compensation expense, was a loss of
  $6.5 million, compared with a loss of $4.0 million in the prior year
  period, primarily reflecting the impact of the Easter holiday shift.
• GAAP EPS loss for the quarter was $0.17, compared with a GAAP EPS
  loss of $0.14 per share in the prior year period, also primarily
  reflecting the impact of the Easter holiday shift.

CARLE PLACE, N.Y.–(BUSINESS WIRE)–1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), the leading gourmet food and
floral gift provider for all occasions, today reported results for its
Fiscal 2017 third quarter ended April 2, 2017.

Chris McCann, CEO of 1-800-FLOWERS.COM, Inc., said, “During the fiscal
third quarter, we achieved strong performance in our Consumer Floral and
BloomNet segments. Revenues for the 1-800-Flowers.com brand increased
more than 10 percent and contribution margin increased more than 15
percent. BloomNet also achieved solid revenue growth, up 7 percent for
the period, along with 6 percent growth in its bottom-line contribution.
These results illustrate the leverage in our business model as well as
our focus on efficient marketing and merchandising programs combined
with truly original product offerings.”

McCann said that both the Consumer Floral and BloomNet segments
benefited from the shift of the Valentine holiday to a Tuesday day
placement this year. “In our floral businesses, we more than offset the
impact of the Easter shift by continuing to drive strong growth in our
everyday gifting business and maximizing the benefit of the weekday
placement for the Valentine holiday. However, the later Easter date this
year moved significant revenues out of the third quarter in our Gourmet
Food and Gift Baskets segment. Combined with the timing of some Harry &
David revenues, this impacted both top and bottom line results for the
quarter.”

McCann noted that the impact of the Easter shift was anticipated and
said the Company has already recaptured the revenues associated with the
date shift in its current fiscal fourth quarter. “In addition to
recapturing the Easter revenues, during the fourth quarter our Gourmet
Foods and Gift Baskets segment will benefit from the timing of some
Harry & David Fruit-Of-The-Month Club™ shipments. Combined
with the continuing positive trends in Consumer Floral and BloomNet, we
anticipate achieving solid top and bottom-line growth across all three
of our business segments for the fiscal fourth quarter.”

Third Quarter 2017 Financial Results

For the third quarter of 2017, revenues were essentially unchanged at
$233.7 million, compared with total revenues of $234.2 million in the
prior year period. This reflects lower year-over-year revenues in the
Company’s Gourmet Food and Gift Baskets segment due primarily to the
impact of the Easter holiday shifting into the Company’s fiscal fourth
quarter this year. This impact was largely offset by strong revenue
growth in the Company’s Consumer Floral and BloomNet segments which grew
10.2 percent and 7.0 percent, respectively, compared with the prior year
period.

Gross profit margin for the quarter was 40.0 percent, a decrease of 130
basis points compared with 41.3 percent in the prior year period. This
primarily reflects lower gross margin in the Company’s Gourmet Food and
Gift Baskets segments, due largely to the shift of the Easter holiday.
Operating expenses, excluding depreciation and amortization, as a
percent of total revenues improved 30 basis points to 43.4 percent,
compared with 43.7 percent in the prior year period.

The combination of these factors resulted in an EBITDA loss (excluding
stock-based compensation expense) of $6.5 million compared with an
EBITDA loss of $4.0 million in the prior year period. Net loss was $11.1
million, or $0.17 per share, compared with a net loss of $9.1 million,
or $0.14 per share, in the prior year period.

Regarding customer metrics for the quarter, the Company attracted
881,000 new customers. Approximately 1.9 million customers placed orders
during the quarter, of which 53.4 percent were repeat customers. This
reflects the Company’s effective marketing and merchandising programs,
including initiatives in social and mobile communication channels and
its Celebrations suite of services – Celebrations Passport, Celebrations
Rewards and Celebrations Reminders – all designed to engage and deepen
its relationships with its customers.

Segment Results From Continuing Operations:

The Company provides selected financial results for its Consumer Floral,
BloomNet and Gourmet Foods and Gift Baskets segments in the tables
attached to this release and as follows:

• Gourmet Foods and Gift Baskets: Revenues
  for the quarter declined 13.6 percent to $85.6 million, compared with
  $99.1 million in the prior year period. Gross margin declined 360
  basis points to 34.8 percent, compared with 38.4 percent in the prior
  year period. Contribution margin loss was $10.8 million compared with
  $6.8 million in the prior year period. The revenue, gross margin and
  contribution margin declines primarily reflect the impact of the shift
  of the Easter holiday as well as the timing of some revenues in the
  Company’s Harry & David business.
• Consumer Floral: Fiscal third
  quarter revenues in this segment increased 10.2 percent to $124.7
  million, compared with $113.2 million in the prior year period. Gross
  margin was 40.6 percent, unchanged compared with the prior year
  period. Because of these factors, category contribution margin
  increased for the eleventh consecutive quarter, up 15.4 percent to
  $15.9 million, compared with $13.7 million in the prior year period.
• BloomNet Wire Service: Revenues for the
  quarter increased 7.0 percent to $24.1 million, compared with $22.5
  million in the prior year period. Gross profit margin was 53.6
  percent, a decrease of 140 basis points compared with 55.0 percent in
  the prior year period, primarily reflecting product mix. Contribution
  margin increased 6.4 percent to $8.2 million compared with $7.7
  million in the prior year period.

Company Guidance:

The Company is reiterating its guidance for fiscal 2017 as follows:

• Consolidated revenue growth for the year in a range of 3-to-4 percent,
  compared with revenues of $1.17 billion reported for fiscal 2016.
• EBITDA growth in a range of 8-to-10 percent compared with Adjusted
  EBITDA of $85.8 million reported for fiscal 2016.
• EPS growth in a range of 5-to-10 percent compared with Adjusted EPS of
  $0.43 reported for fiscal 2016.
• Free Cash Flow for the year of approximately $40 million compared with
  $24 million in fiscal 2016.

Note: On March 15, 2017, the Company announced the signing of a
definitive agreement to sell its Fannie May Confections Brands business
to Ferrero International for $115.0 million. Closing for this
transaction is anticipated to be at the end of May. The Company’s
current guidance for fiscal 2017 does not reflect the pending sale.

Definitions:

EBITDA: Net income (loss) before interest, taxes, depreciation,
amortization. Free Cash Flow: net cash provided by operating activities
less capital expenditures. Category contribution margin: earnings before
interest, taxes, depreciation and amortization, before the allocation of
corporate overhead expenses. The Company presents EBITDA, Comparable EPS
and Free Cash Flow 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 also uses EBITDA and Adjusted
EBITDA as factors used 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 to measure compliance with covenants such as interest coverage
and debt incurrence. EBITDA and Adjusted EBITDA are also used by the
Company to evaluate and price potential acquisition candidates. EBITDA,
Adjusted EBITDA and Free Cash Flow 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 of EBITDA and Adjusted EBITDA 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 significant 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 Free Cash Flow should only be
used on a supplemental basis combined with GAAP results when evaluating
the Company’s performance.

About 1-800-FLOWERS.COM,
Inc.

1-800-FLOWERS.COM,
Inc. is a leading provider of gourmet food and floral gifts for all
occasions. For the past 40 years, 1-800-FLOWERS® (1-800-356-9377 or www.1800flowers.com) has
been helping deliver smiles for our customers with gifts for every
occasion, including fresh flowers and the finest selection of plants,
gift baskets, gourmet foods, confections, candles, balloons and plush
stuffed animals. As always, our 100% Smile Guarantee® backs every
gift. The company’s Celebrations suite of services including
Celebrations Passport Free Shipping Program, Celebrations Rewards and
Celebrations Reminders, are all designed to engage with customers and
deepen relationships as a one-stop destination for all celebratory and
gifting occasions. In 2016, 1-800-Flowers.com was awarded Silver Stevie
“e-Commerce Customer Service” Award, recognizing the company’s
innovative use of online technologies and social media to service the
needs of customers. In addition, 1-800-FLOWERS.COM, Inc. was recognized
as one of Internet Retailer’s Top 300 B2B e-commerce companies and was
also recently named in Internet Retailer’s 2016 Top Mobile 500 as one of
the world’s leading mobile commerce sites. The company was included in
Internet Retailer’s 2015 Top 500 for fast growing e-commerce companies.
In 2015, 1-800-Flowers.com was named a winner of the “Best Companies to
Work for in New York State” Award by The New York Society for Human
Resource Management (NYS-SHRM). The Company’s BloomNet® international
floral wire service (www.mybloomnet.net) provides
a broad range of quality products and value-added services designed to
help professional florists grow their businesses profitably. The 1-800-FLOWERS.COM,
Inc. “Gift Shop” also includes gourmet gifts such as premium,
gift-quality fruits and other gourmet items from Harry & David®
(1-877-322-1200) or www.harryanddavid.com), popcorn
and specialty treats from The Popcorn Factory® (1-800-541-2676 or www.thepopcornfactory.com); cookies
and baked gifts from Cheryl’s® (1-800-443-8124 or www.cheryls.com); premium
chocolates and confections from Fannie May® (www.fanniemay.com and www.harrylondon.com); gift
baskets and towers from 1-800- Baskets.com® (www.1800baskets.com); premium
English muffins and other breakfast treats from Wolferman’s
(1-800-999-1910 or www.wolfermans.com);
carved fresh fruit arrangements from FruitBouquets.com (www.fruitbouquets.com); and
top quality steaks and chops from Stock Yards® (www.stockyards.com).
Shares in 1-800-FLOWERS.COM, Inc.
are traded on the NASDAQ Global Select Market, ticker symbol: FLWS.

Special Note Regarding Forward-Looking
Statements:

This press release contains 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 beliefs concerning future events and can generally be identified by
the use of statements that include words such as “estimate,” “expects,”
“project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,”
“likely,” “will,” “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 which could
cause actual results to differ materially from the results expressed or
implied in the forward- looking statements, including, but are not
limited to, statements regarding the Company’s expectations for:
enhanced performance in its Fannie May business; its ability to continue
to generate solid top and bottom-line growth in its 1-800-Flowers.com
Consumer Floral business; its ability to generate strong revenue growth
in its Cheryl’s, Harry & David, The Popcorn Factory and 1800Baskets
businesses; its ability to continue to grow bottom-line contribution in
its 1-800-Flowers and BloomNet businesses; its ability to leverage its
consolidated customer database and new multi-brand website to attract
and retain customers and help grow revenues; its ability to achieve its
guidance for consolidated revenue growth for the full year in a range of
4-to-5 percent; its ability to achieve EBITDA growth in a range of
8-to-10 percent and EPS in a range of 5-to-10 percent; its ability to
generate Free Cash Flow for the year of approximately $40 million; its
ability to leverage its operating platform and reduce operating expense
ratio; its ability to cost effectively acquire and retain customers; the
outcome of contingencies, including legal proceedings in the normal
course of business; its ability to compete against existing and new
competitors; its ability to manage expenses associated with sales and
marketing and necessary general and administrative and technology
investments; its ability to reduce promotional activities and achieve
more efficient marketing programs; and general consumer sentiment and
economic conditions that may affect levels of discretionary customer
purchases of the Company’s products. The Company undertakes no
obligation to publicly update any of the forward-looking statements,
whether as a result of new information, future events or otherwise, made
in this release or in any of its SEC filings except as may be otherwise
stated by the Company. For a more detailed description of these and
other risk factors, please refer to the Company’s SEC filings including
the Company’s Annual Reports on Form 10-K and its Quarterly Reports on
Form 10-Q. Consequently, you should not consider any such list to be a
complete set of all potential risks and uncertainties.

Conference Call

The Company will conduct a conference call to discuss the above details
and attached financial results today, Tuesday, May 2, 2017 at 11:00 a.m.
(EDT). The call will be “web cast” live via the Internet and can be
accessed from the Investor Relations section of the 1-800-FLOWERS.COM
web site at www.1800flowersinc.com
A recording of the call will be posted on the Investor Relations section
of the Company’s web site within two hours of the call’s completion. A
telephonic replay of the call can be accessed beginning at 2:00 p.m. EDT
on the day of the call through May 9, 2017 at: 1-877-344-7529 or
1-412-317-0088 (international) or 1-855-669-9658 (Canada); Conference
ID: 10105202.

Note: Attached tables are an integral part of this press release
without which the information presented in this press release should be
considered incomplete.

Contacts

1-800-FLOWERS.COM, Inc.
Investors:
Joseph
D. Pititto, 516-237-6131
invest@1800flowers.com
or
Media:
Yanique
Woodall, 516-237-6028
ywoodall@1800flowers.com

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