1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) Q2 2023 Earnings Call Transcript

Bill Shea: So, our average order was about $90, up around 6%. Probably half of that was due to the strategic pricing initiatives that we put in place, and about half of it is due to kind of mix. And seeing the more affluent consumer buying up and some of our bundles and higher priced items being very attractive.

Dan Kurnos: Got it. That’s really helpful. Funny isn’t it how we’re going into recession and consumers now willing to pay for shipping and returns, whereas those were the things they wanted most free when things were better. Alternatively, you guys talked about record for Harry & David. And I think that, that is really important. Obviously, it’s been a great brand for you guys. And the vast majority of the upside in order came from GFGB. So, Bill, just any incremental color on sort of Harry & David outperformance relative to the rest of GFGB? And then, you guys did this kind of exercise before, and Bill you touched on it a little bit in your prepared remarks, but it’d be really helpful to kind understand how much of the early action you guys took to avoid sort of the repeat of last year drove the margin upside versus how much was sort of your organic improvement from whether it’s optimization or (ph) versus kind of the lower input costs that are out of your control like shipping?

Like, if you kind of parse that out for us, I think that would be super helpful.

Bill Shea: Well, first off, what drove the quarter certainly was the performance of our food brands, relatively flat from a top-line perspective. Harry & David is the biggest brand, and Harry & David performed the best of all from — certainly from a top-line perspective, and kind of low single-digit growth year-over-year. We did make the investments in inventory to offset the supply chain challenges that we experienced last year. It’s certainly made for more operational efficiencies that we had, because both having the inventory on hand and having access to labor, labor availability was there, allowed us to a much more efficient operation. So, that helped — certainly helped — was a component of the 170 basis point improvement in gross margins that we saw on the food brands.

Dan Kurnos: Okay. I’ll follow-up with you more on that offline. The last one for me and I’ll step away. I always ask you this, Chris, just kind of looking out ahead understanding that there’s consumer uncertainty, but the way that you’ve oriented everything, the pricing initiatives, like good to get confidence on the margin side just from a revenue perspective. If things were more stable, I mean, how would you kind of view potential for top-line progress? And if you want to parse it out between sort of Consumer Floral versus Food, that would be helpful too. Thanks.

Chris McCann: Sure, Dan. I think, we have a lot of confidence as we look forward with our business, as I mentioned in our remarks. With the platform that we build, providing the operating leverage that we’re showing, the benefits and the improvement we’re seeing in OpEx spend, coupled with the gross margin improvement, really gives us some confidence as we go forward. And what we’re doing is we’re building off of the strength that we’ve built over the last couple of years. Bill mentioned in his comments that over the last two or three years, we’ve grown like 77%. We’ve doubled the size of our customer base. So, we’re leveraging that capability to product catalog that we continue to expand and certainly with our newest acquisition moving deeper into the personalization category.