Executive Summary

FLWS’s Q4 FY2025 delivered a revenue beat but deeper losses: revenue $336.6M vs consensus ~~$330.0M; adjusted EPS ($0.69) missed consensus (~~$0.565), and EBITDA was weaker than consensus as promotional activity and deleveraging weighed on gross margins .
Gross margin fell 290 bps YoY to 35.5% due to a highly promotional environment and lower volume; adjusted EBITDA loss widened to ($24.2M) vs ($8.8M) last year .
Management emphasized a pivot to variable contribution margin, marketing efficiency, and a multi-channel strategy (marketplaces, on-demand delivery, and physical retail tests), with FY2026 framed as a foundation-setting year rather than providing numeric guidance .
Notable estimate context: revenue beat but EPS and EBITDA missed; earlier FY2025 guidance set in Q2 was withdrawn in Q3, and no formal FY2026 targets were provided, keeping focus on execution of cost savings (~$40M annualized) and strategic transformation .

What Went Well and What Went Wrong

What Went Well

Revenue beat: Q4 revenue $336.6M vs consensus ~$330.0M; benefited modestly from Easter shift from Q3 into Q4 .
Strategic clarity: New CEO laid out a customer-centric, data-driven plan focusing on variable contribution margin, loyalty improvements, algorithmic merchandising, and channel expansion beyond e-commerce (marketplaces, on-demand, pop-ups, permanent stores) .
Operational stabilization: Management indicated the OMS performance issues seen over the holidays have been addressed, with system now performing better than the prior platform and customer care redundancies in place .

What Went Wrong

Profitability deterioration: Gross margin down 290 bps YoY to 35.5%; adjusted EBITDA loss widened to ($24.2M) vs ($8.8M) last year; adjusted net loss was ($43.8M) vs ($21.8M) a year ago .
Segment pressures: Consumer Floral & Gifts revenue down 8.8% and segment contribution down (despite non-recurring add-backs); Gourmet Foods revenue down 3.6% and contribution loss widened; BloomNet revenue down 0.6% with margin pressure .
Marketing inefficiency: Bottom-of-funnel spend underperformed as SEO declines and paid placements reduced efficiency; transactions fell 5.6% and AOV fell 1.6% in Q4 .

Financial Results

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($USD Millions)	$775.5	$331.5*	$336.6
Adjusted EPS ($USD)	$1.08	($0.71)*	($0.69)
Gross Profit Margin %	43.3%	33.1%	35.5%
Adjusted EBITDA ($USD Millions)	$116.3	($34.9)	($24.2)

Values marked with * retrieved from S&P Global.

Segment breakdown – Q4 FY2025:

Segment	Revenue ($USD Millions)	Gross Margin %	Segment Contribution Margin (Adj., $USD Millions)
Consumer Floral & Gifts	$211.2	38.5%	$17.4
Gourmet Foods & Gift Baskets	$101.4	26.0%	($19.0)
BloomNet	$24.2	46.9%	$6.5

KPIs (FY2025 context):

KPI	Value
Customers (end of FY2025)	9.5M
Passport Members	>900k
Revenue from Existing Customers	74%
Multi-branded customers	13% of customers; 29% of revenue
Passport members share	9% of customers; 19% of revenue
Q4 Transactions / AOV	Transactions down 5.6%; AOV down 1.6%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenues	FY2025	Mid-single-digit decline YoY	Withdrawn (Q3 call)	Withdrawn
Adjusted EBITDA	FY2025	$65M–$75M	Withdrawn (Q3 call)	Withdrawn
Free Cash Flow	FY2025	$25M–$35M	Withdrawn (Q3 call)	Withdrawn
CapEx	FY2026	N/A	“Slightly down vs last year; includes physical retail investments”	New qualitative color
FY2026 Outlook	FY2026	N/A	Foundation-setting year; customer-centric/data-driven focus; no numeric guidance	Narrative only

Earnings Call Themes & Trends

Topic	Q2 2025 (Jan)	Q3 2025 (May)	Q4 2025 (Sep)	Trend
AI/Technology initiatives	Plan to leverage AI to personalize marketing and reduce CAC	Talent additions (Chief AI & Transformation Officer); Celebrations Wave strategy	Algorithm-driven merchandising; modernize search/recommendations	Increasing emphasis
OMS / Operations	OMS issues escalated, ~$20M revenue impact; ~20 bps gross impact; fix underway	Implementation issues acknowledged; expect resolution by end of FY2025	System performing better than prior; care redundancies built	Improving/stabilizing
Marketing efficiency	Lower-funnel/SEO changes hurt efficiency	Shift to variable contribution margin; broaden funnel	Continued focus on profitability over top-line	Refocus toward profitability
Channel expansion	Considering broader reach	Holiday stores; Huntington store pilot	Pop-ups at Macy’s, malls; marketplaces; on-demand delivery	Expanding channels
Tariffs/Commodities	China COGS exposure outlined; Colombia tariff risk scenario	Tariff headwind discussed; macro caution	Tariff headwind ~$15M now vs ~$55M initially; cocoa elevated, others normalizing	Headwind easing

Management Commentary

CEO (Adolfo Villagomez): “We’re making the company leaner and more agile, putting the customer at the center… sharpening how we attract and retain customers… modernizing the customer experience… driving operational discipline, efficiency, and accountability.”
Strategic priorities: “Driving cost savings… building a customer-centric and data-driven organization… broadening our reach beyond our e-commerce sites… strengthening our team…”
CFO (James Langrock): “Traditional SEO continued to decline… bottom-of-the-funnel marketing investments did not yield expected results… transactions decreased 5.6% and AOV decreased 1.6%.”
Marketing pivot: “Focus on variable contribution margin… expanding marketing strategy from bottom of the funnel into a full funnel approach.”
OMS resolution: “We are quite confident that we solved all of the systems performance issues… system today is performing better than before… building redundancies in customer care.”

Q&A Highlights

Marketing efficiency and technology shifts: Management highlighted a pivot to variable contribution margin and full-funnel marketing amid SEO declines and AI-driven shifts in consumer search behavior .
Competitive dynamics: No single “bad actor”; need greater agility and presence across customer channels (delivery platforms, marketplaces, physical retail) .
Tariffs/commodities: Cocoa remains elevated; broader commodities reverting toward mean; tariff headwind now ~$15M (down from ~$55M earlier); ongoing vendor concessions and assortment changes to mitigate .
Holiday performance: Mother’s Day tracked as expected but down YoY; emphasis on profitable sales over unprofitable revenue .
CapEx and retail tests: CapEx expected slightly down YoY with investments in Harry & David and Things Remembered locations; pop-ups at Macy’s and mall stores to test assortments; Huntington store performing well and informing rollout .

Estimates Context

Actuals vs Wall Street consensus (S&P Global) – Q2 to Q4 FY2025:

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($USD)	$775.5M actual vs $802.5M consensus*	$331.5M actual vs $364.2M consensus*	$336.6M actual vs $330.0M consensus*
Primary EPS ($USD)	$1.00 actual vs $1.19 consensus*	($0.71) actual vs ($0.34) consensus*	($0.69) actual vs ($0.565) consensus*
EBITDA ($USD)	$105.2M actual vs $124.4M consensus*	($43.9M) actual vs ($12.4M) consensus*	($32.2M) actual vs ($22.0M) consensus*

Values retrieved from S&P Global.
Note: Company-reported adjusted EBITDA in Q4 was ($24.2M) (non-GAAP), which differs from S&P’s EBITDA actual figure (likely GAAP) .

Key implications:

Q4 revenue beat consensus by ~$6.7M, but adjusted EPS and EBITDA missed materially.*
Q3 and Q2 saw broad misses across revenue, EPS, and EBITDA as marketing efficiency and OMS issues weighed.*

Key Takeaways for Investors

Near-term trading: Expect sensitivity to profitability signals; Q4 featured a revenue beat but EPS/EBITDA miss—headlines likely focus on margin pressure and promotional intensity.*
Medium-term thesis: The pivot to variable contribution margin and full-funnel marketing, combined with OMS stabilization and cost actions (~$40M annualized), offers a path to margin repair through FY2026 foundation setting .
Channel diversification: Expanding beyond owned e-commerce (marketplaces, on-demand, retail pop-ups/permanent) can broaden reach and reduce reliance on bottom-of-funnel search .
Loyalty and LTV: Enhancements to Celebrations Passport and multi-brand engagement aim to increase frequency and lifetime value; current mix shows strong existing-customer contribution (74% of revenue) .
Tariff/commodity backdrop: Tariff headwind easing to ~$15M and commodity normalization (ex-cocoa) could modestly support margins, but promotional environment remains the key swing factor .
Watch KPIs: Transactions vs AOV, gross margin trajectory, adjusted EBITDA progression, and traction in new channels/retail tests should guide estimate revisions and sentiment .
Valuation drivers: Execution on cost reductions, marketing efficiency, and retail expansion are catalysts; lack of formal FY2026 guidance keeps focus on quarterly progress and qualitative milestones .

Appendix: Non-GAAP Adjustments (Q4/FY2025 highlights)

Q4 adjustments included goodwill and intangible impairment ($5.6M in quarter; $143.8M FY), restructuring/severance, NQDC-related charges; adjusted net loss per share ($0.69) and adjusted EBITDA ($24.2M) reconcile to GAAP in release tables .
FY2025 free cash flow was ($67.8M) vs $56.4M last year, reflecting weaker operating cash flow and higher capex .

*All consensus and “actual” figures in the Estimates tables are from S&P Global. Document-based financials and commentary are cited accordingly: .

1 800 FLOWERS COM INC (FLWS)·Q4 2025 Earnings Summary