10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2020

or

__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission File No. 0-26841

1-800-FLOWERS.COM, Inc.

(Exact name of registrant as specified in its charter)

​DELAWARE	11-3117311
(State of incorporation)	(I.R.S. Employer Identification No.)

One Old Country Road, Carle Place, New York, 11514	(516) 237-6000
(Address of principal executive offices) (Zip code)	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A common stock	FLWS	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☑   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

☐ Large accelerated filer	☑ Accelerated filer
☐ Non-accelerated filer	☐ Smaller reporting company
	☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☑

The number of shares outstanding of each of the Registrant’s classes of common stock as of May 1, 2020:

Class A common stock:	35,739,913
Class B common stock:	28,542,823

1-800-FLOWERS.COM, Inc.

FORM 10-Q

For the quarterly period ended March 29, 2020

TABLE OF CONTENTS

		Page
Part I.	Financial Information
Item 1.	Condensed Consolidated Financial Statements		1
	Condensed Consolidated Balance Sheets – March 29, 2020 (Unaudited) and June 30, 2019		1
	Condensed Consolidated Statements of Income (Loss) (Unaudited) – Three and Nine Months Ended March 29, 2020 and March 31, 2019		2
	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three and Nine Months Ended March 29, 2020 and March 31, 2019		3
	Condensed Consolidated Statements of Stockholder’s Equity (Unaudited) – Three and Nine Months Ended March 29, 2020 and March 31, 2019		4
	Condensed Consolidated Statements of Cash Flows (Unaudited) – Nine Months Ended March 29, 2020 and March 31, 2019		5
	Notes to Condensed Consolidated Financial Statements (Unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		24
Item 4.	Controls and Procedures		25
Part II.	Other Information
Item 1.	Legal Proceedings		25
Item 1A.	Risk Factors		25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 3.	Defaults upon Senior Securities		26
Item 4.	Mine Safety Disclosures		26
Item 5.	Other Information		26
Item 6.	Exhibits		27
Signatures			28

PART I. – FINANCIAL INFORMATION

ITEM 1. – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except for share data)

	March 29, 2020			June 30, 2019
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	232,115		$	172,923
Trade receivables, net		26,217			12,374
Inventories		74,037			92,361
Prepaid and other		21,312			25,580
Total current assets		353,681			303,238
Property, plant and equipment, net		166,399			166,681
Operating lease right-of-use assets		70,284			-
Goodwill		74,711			62,590
Other intangibles, net		66,500			59,615
Other assets		17,054			14,316
Total assets	$	748,629		$	606,440
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	37,314		$	25,704
Accrued expenses		116,815			96,793
Current maturities of long-term debt		5,000			5,000
Current portion of long-term operating lease liabilities		9,524			-
Total current liabilities		168,653			127,497
Long-term debt		88,648			91,973
Long-term operating lease liabilities		64,251			-
Deferred tax liabilities		27,300			28,898
Other liabilities		11,766			15,361
Total liabilities		360,618			263,729
Commitments and contingencies (See Note 13 and Note 14)
Stockholders’ equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued		-			-
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 53,702,810 and 53,084,127 shares issued at March 29, 2020 and June 30, 2019, respectively		537			530
Class B common stock, $0.01 par value, 200,000,000 shares authorized, 33,822,823 shares issued at March 29, 2020 and June 30, 2019		338			338
Additional paid-in-capital		356,038			349,319
Retained earnings		157,749			108,525
Accumulated other comprehensive loss		(252	)		(269	)
Treasury stock, at cost, 17,962,897 and 17,209,093 Class A shares at March 29, 2020 and June 30, 2019, respectively, and 5,280,000 Class B shares at March 29, 2020 and June 30, 2019		(126,399	)		(115,732	)
Total stockholders’ equity		388,011			342,711
Total liabilities and stockholders’ equity	$	748,629		$	606,440

1

1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Loss)

(in thousands, except for per share data)

(unaudited)

	Three Months Ended						Nine Months Ended
	March 29, 2020			March 31, 2019			March 29, 2020		March 31, 2019
Net revenues	$	278,776		$	248,413		$	1,071,681	$	989,225
Cost of revenues		171,324			150,893			618,911		568,338
Gross profit		107,452			97,520			452,770		420,887
Operating expenses:
Marketing and sales		78,606			71,163			262,849		243,781
Technology and development		11,900			11,511			34,436		32,696
General and administrative		20,031			22,447			64,187		64,480
Depreciation and amortization		7,803			7,028			23,268		22,840
Total operating expenses		118,340			112,149			384,740		363,797
Operating income (loss)		(10,888	)		(14,629	)		68,030		57,090
Interest (income) expense, net		147			(30	)		1,727		2,390
Other (income) expense, net		2,605			(1,285	)		1,714		(293	)
Income (loss) before income taxes		(13,640	)		(13,314	)		64,589		54,993
Income tax expense (benefit)		(3,983	)		(5,073	)		15,365		11,922
Net income (loss)	$	(9,657	)	$	(8,241	)	$	49,224	$	43,071
Basic net income (loss) per common share	$	(0.15	)	$	(0.13	)	$	0.76	$	0.67
Diluted net income (loss) per common share	$	(0.15	)	$	(0.13	)	$	0.74	$	0.65
Weighted average shares used in the calculation of net income (loss) per common share:
Basic		64,348			64,194			64,517		64,383
Diluted		64,348			64,194			66,378		66,456

2

1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

	Three Months Ended						Nine Months Ended
	March 29, 2020			March 31, 2019			March 29, 2020		March 31, 2019
Net income (loss)	$	(9,657	)	$	(8,241	)	$	49,224	$	43,071
Other comprehensive income (loss) (currency translation & other miscellaneous items)		1			3			17		(58	)
Comprehensive income (loss)	$	(9,656	)	$	(8,238	)	$	49,241	$	43,013

3

1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share data)

(unaudited)

	Three Months Ended March 29, 2020 and March 31, 2019
	Common Stock								Additional		Retained			Accumulated								Total
	Class A				Class B				Paid-in		Earnings			Other			Treasury Stock					Stockholders’
	Shares		Amount		Shares		Amount		Capital		(Deficit)			Comprehensive Loss			Shares		Amount			Equity
Balance at December 29, 2019		53,678,919	$	536		33,822,823	$	338	$	353,643	$	167,406		$	(253	)		22,859,956	$	(120,762	)	$	400,908
Net loss		-		-		-		-		-		(9,657	)		-			-		-			(9,657	)
Translation adjustment		-		-		-		-		-		-			1			-		-			1
Stock-based compensation		23,891		1		-		-		2,395		-			-			-		-			2,396
Acquisition of Class A treasury stock		-		-		-		-		-		-			-			382,941		(5,637	)		(5,637	)
Balance at March 29, 2020		53,702,810	$	537		33,822,823	$	338	$	356,038	$	157,749		$	(252	)		23,242,897	$	(126,399	)	$	388,011
Balance at December 30, 2018		52,749,203	$	527		33,822,823	$	338	$	344,769	$	125,071		$	(261	)		22,383,738	$	(114,371	)	$	356,073
Net loss		-		-		-		-		-		(8,241	)		-			-		-			(8,241	)
Translation adjustment		-		-		-		-		-		-			3			-		-			3
Stock-based compensation		1,924		-		-		-		1,903		-			-			-		-			1,903
Exercise of stock options		180,000		1		-		-		563		-			-			-		-			564
Acquisition of Class A treasury stock		-		-		-		-		-		-			-			105,355		(1,360	)		(1,360	)
Balance at March 31, 2019		52,931,127	$	528		33,822,823	$	338	$	347,235	$	116,830		$	(258	)		22,489,093	$	(115,731	)	$	348,942
	Nine Months Ended March 29, 2020 and March 31, 2019
	Common Stock								Additional		Retained			Accumulated								Total
	Class A				Class B				Paid-in		Earnings			Other			Treasury Stock					Stockholders’
	Shares		Amount		Shares		Amount		Capital		(Deficit)			Comprehensive Loss			Shares		Amount			Equity
Balance at June 30, 2019		53,084,127	$	530		33,822,823	$	338	$	349,319	$	108,525		$	(269	)		22,489,093	$	(115,732	)	$	342,711
Net income		-		-		-		-		-		49,224			-			-		-			49,224
Translation adjustment		-		-		-		-		-		-			17			-		-			17
Stock-based compensation		468,683		5		-		-		6,436		-			-			-		-			6,441
Exercise of stock options		150,000		2		-		-		283		-			-			-		-			285
Acquisition of Class A treasury stock		-		-		-		-		-		-			-			753,804		(10,667	)		(10,667	)
Balance at March 29, 2020		53,702,810	$	537		33,822,823	$	338	$	356,038	$	157,749		$	(252	)		23,242,897	$	(126,399	)	$	388,011
Balance at July 1, 2018		52,071,293	$	520		33,822,823	$	338	$	341,783	$	73,429		$	(200	)		21,258,790	$	(100,966	)	$	314,904
Net income		-		-		-		-		-		43,071			-			-		-			43,071
Translation adjustment		-		-		-		-		-		-			(58	)		-		-			(58	)
Stock-based compensation		411,600		4		-		-		4,527		-			-			-		-			4,531
Exercise of stock options		448,234		4		-		-		925		-			-			-		-			929
Other		-		-		-		-		-		330			-			-		-			330
Acquisition of Class A treasury stock		-		-		-		-		-		-			-			1,230,303		(14,765	)		(14,765	)
Balance at March 31, 2019		52,931,127	$	528		33,822,823	$	338	$	347,235	$	116,830		$	(258	)		22,489,093	$	(115,731	)	$	348,942

4

1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Nine months ended
	March 29, 2020			March 31, 2019
Operating activities:
Net income	$	49,224		$	43,071
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		23,268			22,840
Amortization of deferred financing costs		486			671
Deferred income taxes		(1,597	)		811
Bad debt expense		1,201			1,018
Stock-based compensation		6,441			4,531
Other non-cash items		(23	)		(301	)
Changes in operating items:
Trade receivables		(15,044	)		(7,249	)
Inventories		19,353			14,448
Prepaid and other		3,148			2,675
Accounts payable and accrued expenses		31,442			14,741
Other assets and liabilities		(557	)		(251	)
Net cash provided by operating activities		117,342			97,005
Investing activities:
Acquisitions, net of cash acquired		(20,500	)		-
Capital expenditures, net of non-cash expenditures		(22,282	)		(16,845	)
Purchase of equity investments		(1,176	)		-
Net cash used in investing activities		(43,958	)		(16,845	)
Financing activities:
Acquisition of treasury stock		(10,667	)		(14,765	)
Proceeds from exercise of employee stock options		285			929
Proceeds from bank borrowings		20,000			30,000
Repayment of notes payable and bank borrowings		(23,750	)		(37,187	)
Debt issuance cost		(60	)		-
Net cash used in financing activities		(14,192	)		(21,023	)
Net change in cash and cash equivalents		59,192			59,137
Cash and cash equivalents:
Beginning of period		172,923			147,240
End of period	$	232,115		$	206,377

5

1-800-FLOWERS.COM, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1 – Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by 1-800-FLOWERS.COM, Inc. and Subsidiaries (the “Company”) in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended March 29, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending June 28, 2020. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 30, 2019, which provides a more complete understanding of our accounting policies, financial position, operating results and other matters.

The Company’s quarterly results may experience seasonal fluctuations. Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s second fiscal quarter, generates nearly 50% of the Company’s annual revenues, and all of its earnings. As a result of the number of major floral gifting occasions, including Mother's Day, Valentine’s Day, Easter and Administrative Professionals Week, revenues also rise during the Company’s fiscal third and fourth quarters compared to its fiscal first quarter.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

COVID-19

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law. The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments. The CARES Act did not have a material impact on the Company’s consolidated financial statements during the three months and nine months ended March 29, 2020.

The Company is closely monitoring the impact of the pandemic of the novel strain of coronavirus ("COVID-19") on its business, including how it will affect its customers, workforce, suppliers, vendors, franchisees, florists, and production and distribution channels, as well as its financial statements. The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it will impact macroeconomic conditions including interest rates, employment rates and consumer confidence, the speed of the anticipated recovery, and governmental, business and individual consumer reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of March 29, 2020 and through the date of this report. The accounting matters assessed included, but were not limited to, the Company’s allowance for doubtful accounts and credit losses, inventory and related reserves and the carrying value of goodwill and other long-lived assets. While there was not a material impact to the Company’s consolidated financial statements as of and for the quarter ended March 29, 2020, the Company’s future assessment of these factors and the evolving factors described above, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Revenue Recognition

Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Service and outbound shipping charged to customers are recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers.

A description of our principal revenue generating activities is as follows:

● E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due prior to the date of shipment.

● Retail revenues - consumer products sold through our retail stores. Revenue is recognized when control of the goods is transferred to the customer, at the point of sale, at which time payment is received.

● Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer.

● BloomNet Services - membership fees as well as other service offerings to florists. Membership and other subscription-based fees are recognized monthly as earned. Services revenues related to orders sent through the floral network are variable, based on either the number of orders or the value of orders, and are recognized in the period in which the orders are delivered. The contracts within BloomNet Services are typically month-to-month and as a result no consideration allocation is necessary across multiple reporting periods. Payment is typically due less than 30 days from the date the services were performed. 

Deferred Revenues

Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. As such, customer orders are recorded as deferred revenue prior to shipment or rendering of product or services. Deferred revenues primarily relate to e-commerce orders placed, but not shipped, prior to the end of the fiscal period, as well as for monthly subscription programs, including our Fruit of the Month Club and Celebrations Passport program.

Our total deferred revenue as of June 30, 2019 was $17.3 million (included in “Accrued expenses” on our consolidated balance sheets), of which, $0.5 million and $16.4 million was recognized as revenue during the three and nine months ended March 29, 2020. The deferred revenue balance as of March 29, 2020 was $28.6 million.

6

Recently Issued Accounting Pronouncements - Adopted

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASC 842”). Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. We adopted the new standard effective July 1, 2019 and elected the optional transition method and therefore, we will not apply the standard to the comparative periods presented in our financial statements. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, that did not require us to reassess, under the new standard, our prior conclusions about lease identification, lease classification and initial direct costs. Further, we elected a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The adoption of the new standard had a material impact to the Company’s Consolidated Balance Sheets, but no impact to the Consolidated Statements of Income (Operations) or Consolidated Statements of Cash Flows. As such, we recorded operating lease liabilities of $80.7 million, based on the present value of the remaining minimum rental payments using discount rates as of the effective date, and a corresponding right-of-use assets of $78.7 million based on the operating lease liabilities adjusted for deferred rent and lease incentives received. See Note 13 - Leases for further information about our transition to ASC 842 and the newly required disclosures.

Recently Issued Accounting Pronouncements – Not Yet Adopted

Financial Instruments – Measurement of Credit Losses. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces a new forward-looking “expected loss” approach, to estimate credit losses on most financial assets and certain other instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. ASU 2016-13 is effective for the Company’s fiscal 2021, and the guidance is to be applied using the modified-retrospective approach. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

Goodwill – Impairment Test. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance is effective for the Company’s fiscal 2021, with early adoption permitted, and should be applied prospectively. We do not expect the standard to have a material impact on our consolidated financial statements.

Note 2 – Net Income (Loss) Per Common Share

The following table sets forth the computation of basic and diluted net income (loss) per common share:

	Three Months Ended						Nine Months Ended
	March 29, 2020			March 31, 2019			March 29, 2020		March 31, 2019
	(in thousands, except per share data)
Numerator:
Net income (loss)	$	(9,657	)	$	(8,241	)	$	49,224	$	43,071
Denominator:
Weighted average shares outstanding		64,348			64,194			64,517		64,383
Effect of dilutive securities:
Employee stock options		-			-			1,035		1,444
Employee restricted stock awards		-			-			826		629
		-			-			1,861		2,073
Adjusted weighted-average shares and assumed conversions		64,348			64,194			66,378		66,456
Net income (loss) per common share
Basic	$	(0.15	)	$	(0.13	)	$	0.76	$	0.67
Diluted	$	(0.15	)	$	(0.13	)	$	0.74	$	0.65

Note 3 – Stock-Based Compensation

The Company has a Long Term Incentive and Share Award Plan, which is more fully described in Note 12 and Note 13 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, that provides for the grant to eligible employees, consultants and directors of stock options, restricted shares, and other stock-based awards.

The amounts of stock-based compensation expense recognized in the periods presented are as follows:

	Three Months Ended				Nine Months Ended
	March 29, 2020		March 31, 2019		March 29, 2020		March 31, 2019
	(in thousands)
Stock options	$	6	$	67	$	99	$	250
Restricted stock		2,390		1,836		6,342		4,281
Total		2,396		1,903		6,441		4,531
Deferred income tax benefit		594		328		1,597		982
Stock-based compensation expense, net	$	1,802	$	1,575	$	4,844	$	3,549

7

Stock-based compensation is recorded within the following line items of operating expenses:

	Three Months Ended				Nine Months Ended
	March 29, 2020		March 31, 2019		March 29, 2020		March 31, 2019
	(in thousands)
Marketing and sales	$	1,097	$	830	$	2,960	$	1,816
Technology and development		181		118		473		274
General and administrative		1,118		955		3,008		2,441
Total	$	2,396	$	1,903	$	6,441	$	4,531

Stock based compensation expense has not been allocated between business segments, but is reflected as part of Corporate overhead (see Note 12 - Business Segments).

Stock Options

The following table summarizes stock option activity during the nine months ended March 29, 2020:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding at June 30, 2019		1,365,000		$	2.48
Granted		-		$	-
Exercised		(150,000	)	$	1.90
Forfeited		-		$	-
Outstanding at March 29, 2020		1,215,000		$	2.55		1.5	$	12,550
Exercisable at March 29, 2020		1,215,000		$	2.55		1.5	$	12,550

As of March 29, 2020, the total future compensation cost related to non-vested options, not yet recognized in the statement of income, was $0.0 million and the weighted average period over which these awards are expected to be recognized was 0.0 years.

Restricted Stock

The Company grants shares of Common Stock to its employees that are subject to restrictions on transfer and risk of forfeiture until fulfillment of applicable service and performance conditions and, in certain cases, holding periods (Restricted Stock). The following table summarizes the activity of non-vested restricted stock awards during the nine months ended March 29, 2020:

	Shares			Weighted Average Grant Date Fair Value
Non-vested at June 30, 2019		1,438,592		$	10.81
Granted		736,555		$	13.09
Vested		(468,683	)	$	10.37
Forfeited		(59,816	)	$	12.54
Non-vested at March 29, 2020		1,646,648		$	11.89

The fair value of non-vested shares is determined based on the closing stock price on the grant date. As of March 29, 2020, there was $12.2 million of total unrecognized compensation cost related to non-vested restricted stock-based compensation to be recognized over the weighted-average remaining period of 1.9 years.  

8

Note 4 – Acquisition

Acquisition of Shari’s Berries

On August 14, 2019, the Company completed its acquisition of the Shari’s Berries business ("Shari's Berries"), a leading provider of dipped berries and other specialty treats, through a bankruptcy proceeding of certain assets of the gourmet food business of the FTD Companies, Inc. The transaction, for a purchase price of $20.5 million, included the Shari’s Berries domain names, copyrights, trademarks, customer data, phone numbers and other intellectual property, as well as certain raw material inventory and the assumption of specified liabilities.

The total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on our preliminary estimates of their fair values on the acquisition date. The Company is in the process of finalizing its allocation and this may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain additional intangible assets, revisions of useful lives of intangible assets, and the determination of any residual amount that will be allocated to goodwill. Of the acquired intangible assets, $0.6 million was assigned to customer lists, which is being amortized over the estimated remaining life of 2 years, $6.9 million was assigned to tradenames, and $12.1 million was assigned to goodwill, which is expected to be deductible for tax purposes. The goodwill recognized in conjunction with our acquisition of Shari’s Berries is primarily related to synergistic value created in terms of both operating costs and revenue growth opportunities, enhanced financial and operational scale, and other strategic benefits.

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of assets acquired and liabilities assumed at the date of the acquisition:

	Shari’s Berries Preliminary Purchase Price Allocation
	(in thousands)
Current assets	$	1,029
Intangible assets		7,540
Goodwill		12,121
Total assets acquired		20,690
Current liabilities		190
Net assets acquired	$	20,500

Raw materials inventory was valued at book value, as there have not been any significant price fluctuations or other events that would materially change the cost to replace the raw materials.

The estimated fair value of the acquired tradenames was determined using the relief from royalty method, which is a risk-adjusted discounted cash flow approach. The relief from royalty method values an intangible asset by estimating the royalties saved through ownership of the asset. The relief from royalty method requires identifying the future revenue that would be generated by the trademark, multiplying it by a royalty rate deemed to be avoided through ownership of the asset and discounting the projected royalty savings amounts back to the acquisition date. The royalty rate used in the valuation was based on a consideration of market rates for similar categories of assets. The discount rate used in the valuation was based on the Company’s weighted average cost of capital, the riskiness of the earnings stream associated with the trademarks and the overall composition of the acquired assets.

The estimated fair value of the acquired customer lists was determined using the excess earnings method under the income approach. This method requires identifying the future revenue that would be generated by existing customers at the time of the acquisition, considering an appropriate attrition rate based on the historical experience of the Company. Appropriate expenses are then deducted from the revenues and economic rents are charged for the return on contributory assets. The after-tax cash flows attributable to the asset are discounted back to their net present value at an appropriate intangible asset rate of return and summed to calculate the value of the customer lists.

Operating results of the Shari’s Berries brand are reflected in the Company’s consolidated financial statements from the date of acquisition, within the Gourmet Foods & Gift Baskets segment. Pro forma results of operations have not been presented, as the impact on the Company’s consolidated financial results would not have been material.

Note 5 – Inventory

The Company’s inventory, stated at cost, which is not in excess of market, includes purchased and manufactured finished goods for sale, packaging supplies, crops, raw material ingredients for manufactured products and associated manufacturing labor and is classified as follows:

	March 29, 2020		June 30, 2019
	(in thousands)
Finished goods	$	32,361	$	36,820
Work-in-process		10,332		17,535
Raw materials		31,344		38,006
Total inventory	$	74,037	$	92,361

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Note 6 – Goodwill and Intangible Assets

The following table presents goodwill by segment and the related change in the net carrying amount:

	1-800-Flowers.com Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Total
	(in thousands)
Balance at June 30, 2019	$	17,441	$	-	$	45,149	$	62,590
Acquisition of Shari’s Berries		-		-		12,121		12,121
Balance at March 29, 2020	$	17,441	$	-	$	57,270	$	74,711

The Company’s other intangible assets consist of the following:

			March 29, 2020						June 30, 2019
	Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in years)		(in thousands)
Intangible assets with determinable lives
Investment in licenses		14-16	$	7,420	$	6,227	$	1,193	$	7,420	$	6,148	$	1,272
Customer lists		2-10		12,825		10,299		2,526		12,184		9,798		2,386
Other		5-14		2,946		2,356		590		2,946		2,280		666
Total intangible assets with determinable lives				23,191		18,882		4,309		22,550		18,226		4,324
Trademarks with indefinite lives				62,191		-		62,191		55,291		-		55,291
Total identifiable intangible assets			$	85,382	$	18,882	$	66,500	$	77,841	$	18,226	$	59,615

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Future estimated amortization expense is as follows: remainder of fiscal 2020 - $0.3 million, fiscal 2021 - $0.9 million, fiscal 2022 - $0.6 million, fiscal 2023 - $0.5 million, fiscal 2024 - $0.5 million and thereafter - $1.5 million.

Note 7 – Investments

Equity investments without a readily determinable fair value

Investments in non-marketable equity instruments of private companies, where the Company does not possess the ability to exercise significant influence, are accounted for at cost, less impairment (assessed qualitatively at each reporting period), adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. These investments are included within “Other assets” in the Company’s consolidated balance sheets. The aggregate carrying amount of the Company’s cost method investments was $2.8 million as of March 29, 2020 and $1.6 million as of June 30, 2019. 

Equity investments with a readily determinable fair value

The Company also holds certain trading securities associated with its Non-Qualified Deferred Compensation Plan (“NQDC Plan”). These investments are measured using quoted market prices at the reporting date and are included within the “Other assets” line item in the consolidated balance sheets (see Note 10 - Fair Value Measurements).

Note 8 –Debt

The Company’s current and long-term debt consists of the following:

	March 29, 2020			June 30, 2019
	(in thousands)
Revolver (1)	$	-		$	-
Term Loan (1)		96,250			100,000
Deferred financing costs		(2,602	)		(3,027	)
Total debt		93,648			96,973
Less: current debt		5,000			5,000
Long-term debt	$	88,648		$	91,973

(1) On May 31, 2019, the Company entered into a Second Amended and Restated Credit Agreement (the “2019 Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent, and a group of lenders. The 2019 Credit Agreement amended and restated the Company’s existing amended and restated credit agreement dated as of December 23, 2016 (the “2016 Credit Agreement”) to, among other modifications: (i) increase the amount of the outstanding term loan (“Term Loan”) from approximately $97 million to $100 million, (ii) extend the maturity date of the outstanding Term Loan and the revolving credit facility (“Revolver”) by approximately 29 months to May 31, 2024, and (iii) decrease the applicable interest rate margins for LIBOR and base rate loans by 25 basis points. The Term Loan is payable in 19 quarterly installments of principal and interest beginning on September 29, 2019, with escalating principal payments, at the rate of 5.0% per annum for the first eight payments, and 10.0% per annum for the remaining 11 payments, with the remaining balance of $62.5 million due upon maturity. The Revolver, in the aggregate amount of $200 million, subject to seasonal reduction to an aggregate amount of $100 million for the period from January 1 through August 1, may be used for working capital and general corporate purposes, subject to certain restrictions.

For each borrowing under the 2019 Credit Agreement, the Company may elect that such borrowing bear interest at an annual rate equal to either: (1) a base rate plus an applicable margin varying based on the Company’s consolidated leverage ratio, where the base rate is the highest of (a) the prime rate, (b) the New York fed bank rate plus 0.5% and (c) a LIBOR rate plus 1% or (2) an adjusted LIBOR rate plus an applicable margin varying based on the Company’s consolidated leverage ratio. The 2019 Credit Agreement requires that while any borrowings or commitments are outstanding the Company comply with certain financial covenants and affirmative covenants as well as certain negative covenants that, subject to certain exceptions, limit the Company’s ability to, among other things, incur additional indebtedness, make certain investments and make certain restricted payments. The Company was in compliance with these covenants as of March 29, 2020. The 2019 Credit Agreement is secured by substantially all of the assets of the Company.

Future principal payments under the Term Loan are as follows: $1.25 million – remainder of fiscal 2020, $5.0 million – fiscal 2021, $10.0 million - fiscal 2022, $10.0 million – fiscal 2023 and $70.0 million – fiscal 2024. 

10

 Note 9 - Property, Plant and Equipment

The Company’s property, plant and equipment consists of the following:

	March 29, 2020			June 30, 2019
	(in thousands)
Land	$	30,789		$	30,789
Orchards in production and land improvements		11,701			11,339
Building and building improvements		60,512			59,236
Leasehold improvements		14,182			13,861
Production equipment and furniture and fixtures		64,461			61,415
Computer and telecommunication equipment		54,664			53,694
Software		144,746			132,078
Capital projects in progress - orchards		12,489			9,902
Property, plant and equipment, gross		393,544			372,314
Accumulated depreciation and amortization		(227,145	)		(205,633	)
Property, plant and equipment, net	$	166,399		$	166,681

Note 10 - Fair Value Measurements

Cash and cash equivalents, trade and other receivables, prepaids, accounts payable and accrued expenses are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Although no trading market exists, the Company believes that the carrying amount of its debt approximates fair value due to its variable nature. The Company’s investments in non-marketable equity instruments of private companies are carried at cost and are periodically assessed for other-than-temporary impairment, when an event or circumstances indicate that an other-than-temporary decline in value may have occurred. The Company’s remaining financial assets and liabilities are measured and recorded at fair value (see table below). The Company’s non-financial assets, such as definite lived intangible assets and property, plant and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Goodwill and indefinite lived intangibles are tested for impairment annually, or more frequently, if events occur or circumstances change such that it is more likely than not that an impairment may exist, as required under the accounting standards.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the guidance are described below:

Level 1	Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2	Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3	Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents by level, within the fair value hierarchy, financial assets and liabilities measured at fair value on a recurring basis:

	Carrying Value		Fair Value Measurements Assets (Liabilities)
			Level 1		Level 2		Level 3
	(in thousands)
As of March 29, 2020:
Trading securities held in a “rabbi trust” (1)	$	11,360	$	11,360	$	-	$	-
Total assets (liabilities) at fair value	$	11,360	$	11,360	$	-	$	-
As of June 30, 2019:
Trading securities held in a “rabbi trust” (1)	$	11,816	$	11,816	$	-	$	-
Total assets (liabilities) at fair value	$	11,816	$	11,816	$	-	$	-

(1) The Company has established an NQDC Plan for certain members of senior management. Deferred compensation plan assets are invested in mutual funds held in a “rabbi trust,” which is restricted for payment to participants of the NQDC Plan. Trading securities held in a rabbi trust are measured using quoted market prices at the reporting date and are included in the “Other assets” line item, with the corresponding liability included in the “Other liabilities” line item in the consolidated balance sheets. 

Note 11 – Income Taxes

At the end of each interim reporting period, the Company estimates its effective income tax rate expected to be applicable for the full year. This estimate is used in providing for income taxes on a year-to-date basis and may change in subsequent interim periods. The Company’s effective tax rate from operations for the three and nine months ended March 29, 2020 was 29.2% and 23.8% respectively, compared to 38.1% and 21.7% in the same periods of the prior year. The effective tax rates for fiscal 2020 and fiscal 2019 differed from the U.S. federal statutory rate of 21% due to state income taxes and nondeductible expenses for executive compensation, partially offset by various permanent differences and tax credits, including excess tax benefits from stock-based compensation.

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various foreign countries. The Company is currently undergoing its U.S. federal examination for fiscal 2017, however, fiscal year 2018 remains subject to U.S. federal examination. Due to ongoing state examinations and nonconformity with the U.S. federal statute of limitations for assessment, certain states remain open from fiscal 2015. The Company's foreign income tax filings from fiscal 2014 are open for examination by its respective foreign tax authorities, mainly Canada, Brazil, and the United Kingdom.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At March 29, 2020, the Company has an unrecognized tax benefit, including accrued interest and penalties, of approximately $0.9 million. The Company believes that $0.2 million of unrecognized tax positions will be resolved over the next twelve months. 

11

Note 12 – Business Segments

The Company’s management reviews the results of its operations by the following three business segments:

•     1-800-Flowers.com Consumer Floral,

•     BloomNet Wire Service, and

•     Gourmet Foods & Gift Baskets

Segment performance is measured based on contribution margin, which includes only the direct controllable revenue and operating expenses of the segments. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead (see (a) below), nor does it include depreciation and amortization, other (income) expense, net and income taxes, or stock-based compensation. Assets and liabilities are reviewed at the consolidated level by management and not accounted for by segment.

	Three Months Ended						Nine Months Ended
	March 29, 2020			March 31, 2019			March 29, 2020			March 31, 2019
Net Revenues:	(in thousands)
Segment Net Revenues:
1-800-Flowers.com Consumer Floral	$	152,620		$	144,821		$	359,104		$	338,003
BloomNet Wire Service		30,414			28,185			81,576			75,613
Gourmet Foods & Gift Baskets		95,906			75,445			631,705			575,966
Corporate		112			263			472			845
Intercompany eliminations		(276	)		(301	)		(1,176	)		(1,202	)
Total net revenues	$	278,776		$	248,413		$	1,071,681		$	989,225
Operating Income (Loss):
Segment Contribution Margin:
1-800-Flowers.com Consumer Floral	$	15,439		$	15,364		$	34,853		$	32,667
BloomNet Wire Service		10,025			9,480			27,516			25,375
Gourmet Foods & Gift Baskets		(6,275	)		(7,202	)		100,512			89,191
Segment Contribution Margin Subtotal		19,189			17,642			162,881			147,233
Corporate (a)		(22,274	)		(25,243	)		(71,583	)		(67,303	)
Depreciation and amortization		(7,803	)		(7,028	)		(23,268	)		(22,840	)
Operating income (loss)	$	(10,888	)	$	(14,629	)	$	68,030		$	57,090

(a) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, as well as Stock-Based Compensation. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.

The following tables represent a disaggregation of revenue from contracts with customers, by channel: 

	Three Months Ended									Three Months Ended
	March 29, 2020									March 31, 2019
	Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated			Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated
	(in thousands)
Net revenues
E-commerce	$	150,491	$	-	$	81,360	$	231,851		$	142,552	$	-	$	61,810	$	204,362
Retail		1,166		-		5,030		6,196			1,189		-		5,727		6,916
Wholesale		-		10,801		9,516		20,317			-		9,321		7,908		17,229
BloomNet services		-		19,613		-		19,613			-		18,864		-		18,864
Other		963		-		-		963			1,080		-		-		1,080
Corporate		-		-		-		112			-		-		-		263
Eliminations		-		-		-		(276	)		-		-		-		(301	)
Net revenues	$	152,620	$	30,414	$	95,906	$	278,776		$	144,821	$	28,185	$	75,445	$	248,413

	Nine months ended									Nine months ended
	March 29, 2020									March 31, 2019
	Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated			Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated
	(in thousands)
Net revenues
E-commerce	$	353,436	$	-	$	494,549	$	847,985		$	332,302	$	-	$	448,581	$	780,883
Retail		3,187		-		35,640		38,827			3,113		-		38,477		41,590
Wholesale		-		26,819		101,516		128,335			-		23,247		88,908		112,155
BloomNet services		-		54,757		-		54,757			-		52,366		-		52,366
Other		2,481		-		-		2,481			2,588		-		-		2,588
Corporate		-		-		-		472			-		-		-		845
Eliminations		-		-		-		(1,176	)		-		-		-		(1,202	)
Net revenues	$	359,104	$	81,576	$	631,705	$	1,071,681		$	338,003	$	75,613	$	575,966	$	989,225

12

Note 13 – Leases

The Company currently leases plants, warehouses, offices, store facilities, and equipment under various leases through fiscal 2034. Most lease agreements are of a long-term nature (over a year), although the Company does also enter into short-term leases, primarily for seasonal needs. Lease agreements may contain renewal options and rent escalation clauses and require the Company to pay real estate taxes, insurance, common area maintenance and operating expenses applicable to the leased properties. The Company accounts for its leases in accordance with ASC 842. At contract inception, we determine whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time, by assessing whether we have the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset.

At the lease commencement date, we determine if a lease should be classified as an operating or a finance lease (we currently have no finance leases) and recognize a corresponding lease liability and a right-of-use asset on our Balance Sheet. The lease liability is initially and subsequently measured as the present value of the remaining fixed minimum rental payments (including base rent and fixed common area maintenance) using discount rates as of the commencement date. Variable payments (including most utilities, real estate taxes, insurance and variable common area maintenance) are expensed as incurred. The right-of-use asset is initially and subsequently measured at the carrying amount of the lease liability adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use asset. Right-of-use assets are assessed for impairment using the long-lived assets impairment guidance. The discount rate used to determine the present value of lease payments is our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as we generally cannot determine the interest rate implicit in the lease.

We recognize expense for our operating leases on a straight-line basis over the lease term. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Renewal option periods are included in the measurement of lease liability, where the exercise is reasonably certain to occur. Key estimates and judgments in accounting for leases include how we determine: (1) lease payments, (2) lease term and (3) the discount rate used in calculating the lease liability.

Additional information related to our leases is as follows:

	Three Months Ended			Nine Months Ended
	March 29, 2020			March 29, 2020
	(in thousands)
Lease costs:
Operating lease costs	$	3,384		$	10,690
Variable lease costs		3,679			11,565
Short-term lease cost		1,013			5,983
Sublease income		(243	)		(721	)
Total lease costs	$	7,833		$	27,517

	Nine Months Ended
	March 29, 2020
	(in thousands)
Cash paid for amounts included in measurement of operating lease liabilities	$	9,014
Right-of-use assets obtained in exchange for new operating lease liabilities	$	178

	March 29, 2020
	(in thousands)
Weighted-average remaining lease term - operating leases	9.5 years
Weighted-discount rate - operating leases		3.8	%

Maturities of lease liabilities in accordance with ASC 842 as of March 29, 2020 are as follows (in thousands):

Remainder of 2020	$	3,195
2021		11,683
2022		10,313
2023		9,905
2024		9,455
Thereafter		44,897
Total Future Minimum Lease Payments		89,448
Less Imputed Remaining Interest		15,673
Total	$	73,775

At June 30, 2019, in accordance with ASC 840, future minimum rental payments under non-cancelable operating leases with initial terms of one year or more consisted of the following (in thousands):

2020	$	16,588
2021		13,490
2022		12,081
2023		9,957
2024		9,498
Thereafter		44,953
Total Future Minimum Lease Payments	$	106,567

13

Note 14 – Commitments and Contingencies

Litigation

Bed Bath & Beyond:

On April 1, 2020, Bed Bath & Beyond Inc. (“Bed Bath”) commenced an action against the Company in the Court of Chancery for the State of Delaware, which is captioned Bed Bath & Beyond Inc. v. 1-800-Flowers.com, et ano., C.A. (the “Complaint”), alleging a breach of the Equity Purchase Agreement (the “Agreement”), dated February 14, 2020, between Bed Bath, PersonalizationMall.com, LLC (“Personalization Mall”), the Company and a subsidiary of the Company (the “Purchaser”) pursuant to which Bed Bath agreed to sell to Purchaser, and the Purchaser agreed to purchase from Bed Bath, all of the issued and outstanding membership interests of Personalization Mall.  The action was initiated after the Company requested a reasonable delay in the closing under the Agreement due to the unprecedented circumstances created by the COVID-19 pandemic.  The Complaint requests an order of specific performance to consummate the transaction under the Agreement plus attorney’s fees and costs in connection with the action. The Company filed its answer to the Complaint on April 17, 2020 and an order governing expedited proceedings was approved on April 9, 2020 that sets a trial date for late September.  The Company intends to vigorously defend itself against this lawsuit and no assurance can be given as to the ultimate outcome of this matter. At this time the proceedings are in the very early stages, and we are unable to determine or estimate the amount of possible loss or range of loss.

In addition, there are various claims, lawsuits, and pending actions against the Company and its subsidiaries incident to the operations of its businesses. It is the opinion of management, after consultation with counsel, that the final resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

Note 15 – Subsequent Event-Closure of Harry & David Retail Stores

On April 14, 2020, the Company made the strategic decision to permanently close 38 of its 39 Harry & David branded stores, which had previously been closed on a temporary basis due to COVID-19, in accordance with state and local regulations. This will result in a charge within the range of $4.0 - $5.0 million in our fourth quarter for lease obligations, employee costs and other store closure costs.

14

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (MD&A) is intended to provide an understanding of our financial condition, change in financial condition, cash flow, liquidity and results of operations. The following MD&A discussion should be read in conjunction with the consolidated financial statements and notes to those statements that appear elsewhere in this Form 10-Q and in the Company’s Annual Report on Form 10-K, for the year ended June 30, 2019. The following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed or referred to in the forward-looking statements. Factors that could cause or contribute to any differences include, but are not limited to, those discussed under the caption “Forward-Looking Information and Factors That May Affect Future Results,” under Part I, Item 1A, of the Company’s Annual Report on Form 10-K, for the year ended June 30, 2019 under the heading “Risk Factors” and Part II-Other Information, Item 1A in this Form 10-Q.

Overview

1-800-FLOWERS.COM, Inc. and its subsidiaries (collectively, the “Company”) is a leading provider of gifts designed to help customers express, connect and celebrate. For more than 40 years, 1-800-Flowers.com® has been delivering smiles to customers with gifts for every occasion, including fresh flowers and the best selection of plants, gift baskets, gourmet foods, confections, jewelry, candles, balloons and plush stuffed animals. As always, our 100% Smile Guarantee® backs every gift.

The Company’s Celebrations Ecosystem includes the following brands: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, Shari's Berries®, FruitBouquets.com^SM, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Personalization Universe®, Simply Chocolate®, Goodsey®, DesignPac® and Stock Yards®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge across our portfolio of brands, the Company strives to deepen its relationships with its customers. The Company also operates BloomNet®, an international floral wire service providing a broad range of products and services designed to help professional florists grow their businesses profitably; as well as Napco^SM, a resource for floral gifts and seasonal décor.

1-800-FLOWERS.COM, Inc. was recognized as the 2019 Mid-Market Company of the Year by CEO Connection.

Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS.

For additional information, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” of our Annual Report on Form 10-K for the year ended June 30, 2019. 

COVID-19 Impact

In response to the global pandemic, the Company has taken actions to ensure employee safety and business continuity, informed by the guidelines set forth by local, state and federal government and health officials. These initiatives include developing a “Pandemic Preparedness and Response Plan,” establishing an internal “nerve center” to allow for communication and coordination throughout the business, designing workstream teams to promote workforce protection and supply chain management, and dedicating resources to support customers, vendors, franchisees, and our BloomNet member florists.

The COVID-19 pandemic has affected, and will continue to affect, our operations and financial results for the foreseeable future. While there is significant uncertainty in the overall consumer environment due to the COVID-19 crisis, we are seeing strong e-commerce demand for gourmet foods and gift baskets and our floral products for holidays and every-day gifting occasions, as well as for self-consumption. As we entered the Company’s fiscal fourth quarter, we saw an acceleration of demand during the Easter Holiday period, and this continued throughout the month of April. As we look ahead, our expectation is that demand trends will remain strong through the balance of the fourth quarter. With that said, there are headwinds (and resulting increased costs) that have been, and will continue to impact our operations during the foreseeable future, including the following:

● Retail store closures – on March 20, 2020, in response to government actions, and for the safety of its employees, the Company temporarily closed its Cheryl’s and Harry & David retail stores. Affected employees were provided with Company paid special COVID leave pay through April 3^rd, as the nation and the Company worked to understand the extent and potential length of the crisis. On April 14^th, the difficult decision was made to permanently close 38 of our 39 Harry & David retail stores. Plans to wind-down store operations in an orderly manner are currently in development. As a result, the Company expects to incur a charge within the range of $4.0 - $5.0 million in our fourth quarter for lease obligations, employee costs and other store closure costs. Annual revenues attributable to the closed locations was approximately $33.0 million.

● Wholesale volume reductions - we have seen a reduction in our wholesale business as a result of COVID-19, which will impact our fourth quarter results within our BloomNet and Gourmet Foods and Gift Baskets segments. Additionally, we anticipate reduced wholesale orders through the fiscal second quarter of fiscal 2021, as our large wholesale customers are taking a cautious approach due to the uncertainty surrounding the impact of COVID-19 on the overall consumer economy.

● Bloomnet membership fee reductions - we have waived certain fees to our BloomNet members for the month of April to help them weather the COVID-19 crisis.

● Increased operating costs - we are seeing some increased costs associated with the changes we have made, and continue to make, to our manufacturing, warehouse and distribution facilities to provide for the safety and wellbeing of our associates, including: required social distancing, enhanced facility cleaning and sanitizing schedules, and staggered production shifts.

● PersonalizationMall.com - Due to the unprecedented circumstances created by the COVID-19 pandemic, the Company requested a reasonable delay in the closing of the previously announced acquisition of PersonalizationMall.com, LLC until April 30, 2020.  Bed Bath & Beyond Inc., the parent company of PersonalizationMall.com, responded to this request by filing a lawsuit in the Court of Chancery in the state of Delaware on April 1, 2020. The Company intends to vigorously defend itself against this lawsuit.

The scale and overall economic impact of the COVID-19 crisis is still very difficult to assess. However, the strong e-commerce demand that we are seeing across our brands, is expected to offset both the reductions in revenues and increases in costs noted above. The Company believes that the operating platform it has built over the years, combined with its diversified product line, and ability to engage with its customers will allow it to successfully navigate this challenging environment. We remain focused on three key elements of our business strategy:

● Taking care of the health and safety of our associates, our BloomNet florists, our vendors and our customers,

● Maintaining our financial strength and flexibility, and

● Continuing to invest in areas of our business that can help drive future growth.

The Company believes that it is in a strong financial position and has already begun to plan and take the necessary steps to ensure its continued financial health. See Part II, Item 1A. Risk Factors for further discussion of the possible impact of the COVID-19 pandemic on our business.

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Definitions of non-GAAP Financial Measures:

We sometimes use financial measures derived from consolidated financial information, but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. See below for definitions and the reasons why we use these non-GAAP financial measures. Where applicable, see the Segment Information and Results of Operations sections below for reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. These non-GAAP financial measures are referred to as “adjusted" or “on a comparable basis” below.

EBITDA and adjusted EBITDA

We define EBITDA as net income (loss) before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of stock-based compensation, NQDC Plan investment appreciation/depreciation, and for certain items affecting period to period comparability. See Segment Information for details on how EBITDA and adjusted EBITDA were calculated for each period presented.

The Company presents EBITDA and adjusted EBITDA 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 uses EBITDA and adjusted EBITDA as factors 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 and adjusted EBITDA 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 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 should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

Segment contribution margin

We define segment contribution margin as earnings before interest, taxes, depreciation and amortization, before the allocation of corporate overhead expenses. See Segment Information for details on how segment contribution margin was calculated for each period presented.

When viewed together with our GAAP results, we believe segment contribution margin provides management and users of the financial statements meaningful information about the performance of our business segments.

Segment contribution margin is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of the segment contribution margin is that it is an incomplete measure of profitability as it does not include all operating expenses or non-operating income and expenses. Management compensates for these limitations when using this measure by looking at other GAAP measures, such as operating income and net income.

Adjusted net income (loss) and adjusted net income (loss) per common share

We define adjusted net income (loss) and adjusted net income (loss) per common share as net income (loss) and net income (loss) per common share adjusted for certain items affecting period to period comparability. See Segment Information below for details on how adjusted net income (loss) and adjusted net income (loss) per common share were calculated for each period presented.

We believe that adjusted net income (loss) and adjusted net income (loss) per common share are meaningful measures because they increase the comparability of period to period results.

Since these are not measures of performance calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, GAAP net income (loss) and net income (loss) per common share, as indicators of operating performance and they may not be comparable to similarly titled measures employed by other companies.

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Segment Information

The following table presents the net revenues, gross profit and segment contribution margin from each of the Company’s business segments, as well as consolidated EBITDA, and adjusted EBITDA.

	Three Months Ended
	March 29, 2020			Transaction Costs		As Adjusted (non-GAAP) March 29, 2020			March 31, 2019			% Change
		(dollars in thousands)
Net revenues:
1-800-Flowers.com Consumer Floral	$	152,620		$	-	$	152,620		$	144,821			5.4	%
BloomNet Wire Service		30,414			-		30,414			28,185			7.9	%
Gourmet Foods & Gift Baskets		95,906			-		95,906			75,445			27.1	%
Corporate		112			-		112			263			-57.4	%
Intercompany eliminations		(276	)		-		(276	)		(301	)		8.3	%
Total net revenues	$	278,776		$	-	$	278,776		$	248,413			12.2	%
Gross profit:
1-800-Flowers.com Consumer Floral	$	59,943		$	-	$	59,943		$	56,334			6.4	%
		39.3	%				39.3	%		38.9	%
BloomNet Wire Service		14,401			-		14,401			14,071			2.3	%
		47.3	%				47.3	%		49.9	%
Gourmet Foods & Gift Baskets		32,956			-		32,956			26,848			22.8	%
		34.4	%				34.4	%		35.6	%
Corporate		152			-		152			267			-43.1	%
		135.7	%				135.5	%		101.5	%
Total gross profit	$	107,452		$	-	$	107,452		$	97,520			10.2	%
		38.5	%		-		38.5	%		39.3	%
EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
1-800-Flowers.com Consumer Floral	$	15,439		$	-	$	15,439		$	15,364			0.5	%
BloomNet Wire Service		10,025			-		10,025			9,480			5.7	%
Gourmet Foods & Gift Baskets		(6,275	)		-		(6,275	)		(7,202	)		12.9	%
Segment Contribution Margin Subtotal		19,189			-		19,189			17,642			8.8	%
Corporate (b)		(22,274	)		911		(21,363	)		(25,243	)		15.4	%
EBITDA (non-GAAP)		(3,085	)		911		(2,174	)		(7,601	)		71.4	%
Add: Stock-based compensation		2,396					2,396			1,903			25.9	%
Add: Comp charge related to NQ Plan Investment Appreciation/(Depreciation)		(2,611	)		-		(2,611	)		1,294			-301.8	%
Adjusted EBITDA (non-GAAP)	$	(3,300	)	$	911	$	(2,389	)	$	(4,404	)		-45.8	%

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	Nine Months Ended
	March 29, 2020			Transaction Costs		As Adjusted (non-GAAP) March 29, 2020			March 31, 2019			% Change
	(dollars in thousands)
Net revenues:
1-800-Flowers.com Consumer Floral	$	359,104		$	-	$	359,104		$	338,003			6.2	%
BloomNet Wire Service		81,576			-		81,576			75,613			7.9	%
Gourmet Foods & Gift Baskets		631,705			-		631,705			575,966			9.7	%
Corporate		472			-		472			845			-44.1	%
Intercompany eliminations		(1,176	)		-		(1,176	)		(1,202	)		2.2	%
Total net revenues	$	1,071,681		$	-	$	1,071,681		$	989,225			8.3	%
Gross profit:
1-800-Flowers.com Consumer Floral	$	140,537		$	-	$	140,537		$	131,254			7.1	%
		39.1	%				39.1	%		38.8	%
BloomNet Wire Service		40,520			-		40,520			38,306			5.8	%
		49.7	%				49.7	%		50.7	%
Gourmet Foods & Gift Baskets		271,360			-		271,360			250,550			8.3	%
		43.0	%				43.0	%		43.5	%
Corporate		353			-		353			777			-54.6	%
		74.8	%				74.8	%		92.0	%
Total gross profit	$	452,770		$	-	$	452,770		$	420,887			7.6	%
		42.2	%		-		42.2	%		42.5	%
EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
1-800-Flowers.com Consumer Floral	$	34,853		$	-	$	34,853		$	32,667			6.7	%
BloomNet Wire Service		27,516			-		27,516			25,375			8.4	%
Gourmet Foods & Gift Baskets		100,512			-		100,512			89,191			12.7	%
Segment Contribution Margin Subtotal		162,881			-		162,881			147,233			10.6	%
Corporate (b)		(71,583	)		911		(70,672	)		(67,303	)		-5.0	%
EBITDA (non-GAAP)		91,298			911		92,209			79,930			15.4	%
Add: Stock-based compensation		6,441					6,441			4,531			42.2	%
Add: Comp charge related to NQ Plan Investment Appreciation/(Depreciation)		(1,653	)		-		(1,653	)		327			-605.5	%
Adjusted EBITDA (non-GAAP)	$	96,086		$	911	$	96,997		$	84,788			14.4	%

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Reconciliation of net income (loss) to adjusted net income (loss) (non-GAAP):	Three Months Ended						Nine Months Ended
	March 29, 2020			March 31, 2019			March 29, 2020			March 31, 2019
	(in thousands, except per share data)
Net income (loss)	$	(9,657	)	$	(8,241	)	$	49,224		$	43,071
Adjustments to reconcile net income (loss) to adjusted net income (loss) (non-GAAP)
Add: Personalization Mall transaction costs		911			-			911			-
Deduct: Income tax (benefit) on transaction costs		(217	)		-			(217	)		-
Adjusted net income (loss) (non-GAAP)	$	(8,963	)	$	(8,241	)	$	49,918		$	43,071
Basic and diluted net income (loss) per common share
Basic	$	(0.15	)	$	(0.13	)	$	0.76		$	0.67
Diluted	$	(0.15	)	$	(0.13	)	$	0.74		$	0.65
Basic and diluted adjusted net income (loss) per common share (non-GAAP)
Basic	$	(0.14	)	$	(0.13	)	$	0.77		$	0.67
Diluted	$	(0.14	)	$	(0.13	)	$	0.75		$	0.65
Weighted average shares used in the calculation of net income (loss) and adjusted net income (loss) per common share
Basic		64,348			64,194			64,517			64,383
Diluted		64,348			64,194			66,378			66,456

Reconciliation of net income (loss) to adjusted EBITDA (non-GAAP):	Three Months Ended						Nine Months Ended
	March 29, 2020			March 31, 2019			March 29, 2020			March 31, 2019
	(in thousands, except per share data)
Net income (loss)	$	(9,657	)	$	(8,241	)	$	49,224		$	43,071
Add:
Interest expense, net		2,752			(1,315	)		3,441			2,097
Depreciation and amortization		7,803			7,028			23,268			22,840
Income tax expense		-			-			15,365			11,922
Less:
Income tax benefit		3,983			5,073			-			-
EBITDA		(3,085	)		(7,601	)		91,298			79,930
Add: Transaction costs		911			-			911			-
Add: Stock-based compensation		2,396			1,903			6,441			4,531
Add: Compensation charge related to NQ plan investment appreciation/(depreciation)		(2,611	)		1,294			(1,653	)		327
Adjusted EBITDA	$	(2,389	)	$	(4,404	)	$	96,997		$	84,788
(a) Segment performance is measured based on segment contribution margin or segment Adjusted EBITDA, reflecting only the direct controllable revenue and operating expenses of the segments, both of which are non-GAAP measurements. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead, described above, depreciation and amortization, other income (net), and other items that we do not consider indicative of our core operating performance.
(b) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, as well as Stock-Based Compensation. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.

Results of Operations

Net revenues

	Three Months Ended							Nine Months Ended
	March 29, 2020		March 31, 2019		% Change			March 29, 2020		March 31, 2019		% Change
	(dollars in thousands)
Net revenues:
E-Commerce	$	231,851	$	204,362		13.5	%	$	847,985	$	780,883		8.6	%
Other		46,925		44,051		6.5	%		223,696		208,342		7.4	%
Total net revenues	$	278,776	$	248,413		12.2	%	$	1,071,681	$	989,225		8.3	%

Net revenues consist primarily of the selling price of the merchandise, service or outbound shipping charges, less discounts, returns and credits.

Net revenues increased 12.2% and 8.3% during the three and nine months ended March 29, 2020, respectively, compared to the same periods of the prior year, due to growth across all three of the Company’s business segments, reflecting the strategic marketing and merchandising investments across the Company’s brands, the continuing positive trends in everyday gifting occasions, and increased self-consumption within the Gourmet Foods and Gift Baskets segment, as well as incremental revenues from Shari’s Berries, which was acquired on August 14, 2019, and contributed approximately 4.1% of consolidated revenue growth.

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Disaggregated revenue by channel follows:

	Three Months Ended									Three Months Ended
	March 29, 2020									March 31, 2019
	Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated			Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated
	(in thousands)
Net revenues
E-commerce	$	150,491	$	-	$	81,360	$	231,851		$	142,552	$	-	$	61,810	$	204,362
Retail		1,166		-		5,030		6,196			1,189		-		5,727		6,916
Wholesale		-		10,801		9,516		20,317			-		9,321		7,908		17,229
BloomNet services		-		19,613		-		19,613			-		18,864		-		18,864
Other		963		-		-		963			1,080		-		-		1,080
Corporate		-		-		-		112			-		-		-		263
Eliminations		-		-		-		(276	)		-		-		-		(301	)
Net revenues	$	152,620	$	30,414	$	95,906	$	278,776		$	144,821	$	28,185	$	75,445	$	248,413

	Nine months ended									Nine months ended
	March 29, 2020									March 31, 2019
	Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated			Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated
	(in thousands)
Net revenues
E-commerce	$	353,436	$	-	$	494,549	$	847,985		$	332,302	$	-	$	448,581	$	780,883
Retail		3,187		-		35,640		38,827			3,113		-		38,477		41,590
Wholesale		-		26,819		101,516		128,335			-		23,247		88,908		112,155
BloomNet services		-		54,757		-		54,757			-		52,366		-		52,366
Other		2,481		-		-		2,481			2,588		-		-		2,588
Corporate		-		-		-		472			-		-		-		845
Eliminations		-		-		-		(1,176	)		-		-		-		(1,202	)
Net revenues	$	359,104	$	81,576	$	631,705	$	1,071,681		$	338,003	$	75,613	$	575,966	$	989,225

Revenue by sales channel:

E-commerce revenues (combined online and telephonic) increased by 13.5% during the three months ended March 29, 2020, compared to the same period of the prior year, primarily as a result of growth within the Gourmet Foods & Gift Baskets segment of 31.6%, complemented by growth within the 1-800-Flowers.com Consumer Floral segment of 5.6%. During the three months ended March 29, 2020, the Company fulfilled approximately 3.5 million orders through its e-commerce sales channels (online and telephonic sales), an increase of 13.6% compared to the same period of the prior year, while average order value decreased 0.1% to $66.98.

E-commerce revenues (combined online and telephonic) increased by 8.6% during the nine months ended March 29, 2020, compared to the same period of the prior year, as a result of growth within the Gourmet Foods & Gift Baskets and 1-800-Flowers.com Consumer Floral segments of 10.2% and 6.4%, respectively. During the nine months ended March 29, 2020, the Company fulfilled approximately 10.9 million orders through its e-commerce sales channels (online and telephonic sales), an increase of 7.8% compared to the same period of the prior year, while average order value increased 0.7%, to $77.62, during the nine months ended March 29, 2020, compared to the same period of the prior year.

Other revenues are comprised of the Company’s BloomNet Wire Service segment, as well as the wholesale and retail channels of its 1-800-Flowers.com Consumer Floral and Gourmet Foods & Gift Baskets segments. Other revenues increased by 6.5% during the three months ended March 29, 2020, compared to the same period of the prior year, due to growth within the Gourmet Foods & Gift Baskets segment of 6.7% and BloomNet Wire Service segment of 7.9%.

Other revenues increased by 7.4% during the nine months ended March 29, 2020, compared to the same period of the prior year, driven primarily by growth within the Gourmet Foods & Gift Baskets segment of 7.7% and BloomNet Wire Service segment of 7.9%.

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Revenue by segment:

1-800-Flowers.com Consumer Floral – this segment, which consists primarily of the operations of the 1-800-Flowers.com brand, derives revenue from the sale of consumer floral products through its e-commerce sales channels (telephonic and online sales), retail stores, and royalties from its franchise operations. Net revenues increased 5.4% and 6.2% during the three and nine months ended March 29, 2020, compared to the same periods of the prior year, reflecting the strategic marketing and merchandising investments that we have been making in the Company’s flagship brand, resulting in strong growth during the Valentine’s Day holiday period, partially offset by softer demand in the last few weeks of the quarter due to the impact of the COVID-19 crisis.

BloomNet Wire Service - revenues in this segment are derived from membership fees, as well as other product and service offerings to florists. Net revenues increased 7.9% during both the three and nine months ended March 29, 2020, compared to the same periods of the prior year, primarily due to increasing demand for our expanded line of wholesale products, as well as higher services revenue, including digital directory and transaction fees (driven primarily by increased 1-800-Flowers and Shari’s Berries order volume sent through the network), partially offset by softer demand in the last few weeks of the quarter due to the impact of the COVID-19 crisis.

Gourmet Foods & Gift Baskets – this segment includes the operations of Harry & David, Wolferman’s, Stock Yards, Cheryl’s Cookies, The Popcorn Factory, 1-800-Baskets/DesignPac, and Shari’s Berries (acquired on August 14, 2019). Revenue is derived from the sale of gourmet fruits, cookies, baked gifts, premium chocolates and confections, gourmet popcorn, gift baskets, dipped berries, and prime steaks and chops through the Company’s e-commerce sales channels (telephonic and online sales) and company-owned and operated retail stores under the Harry & David and Cheryl’s brand names, as well as wholesale operations. Net revenues increased 27.1% and 9.7% during the three and nine months ended March 29, 2020, compared to the same periods of the prior year primarily due to: (i) Harry & David growth which continues to benefit from the digital transformation of its marketing programs as well as its expanded product offerings of unique, shareable gifts for both holiday (seasonal fruits and bakery) and everyday occasions, as well as Harry & David’s Gourmet line, which includes prepared meals and wines for both gifting and entertaining, which is enabling the brand to attract new customers while also deepening engagement with existing customers, (ii) strong growth in the DesignPac wholesale business due to increased demand fueled by new product designs and an expanded customer list, and (iii) the acquisition of Shari’s Berries on August 14, 2019. Revenues for the three months ended March 29, 2020 also benefitted slightly from favorable e-commerce buying patterns late in the quarter due to COVID-19, although the impact will primarily be reflected in Q4 when product is shipped. Results for the nine months ended March 29, 2020 were negatively impacted by the shortened holiday shopping season caused by the late Thanksgiving/Cyber Monday, which resulted in 6 fewer shopping days between Thanksgiving and Christmas in the second quarter of fiscal 2020 in comparison to the prior year.

Gross profit

	Three Months Ended									Nine Months Ended
	March 29, 2020			March 31, 2019			% Change			March 29, 2020			March 31, 2019			% Change
	(dollars in thousands)
Gross profit	$	107,452		$	97,520			10.2	%	$	452,770		$	420,887			7.6	%
Gross profit %		38.5	%		39.3	%					42.2	%		42.5	%

Gross profit consists of net revenues less cost of revenues, which is comprised primarily of florist fulfillment costs (fees paid directly to florists), the cost of floral and non-floral merchandise sold from inventory or through third parties, and associated costs, including inbound and outbound shipping charges. Additionally, cost of revenues includes labor and facility costs related to direct-to-consumer and wholesale production operations, as well as payments made to sending florists related to order volume sent through the Company’s BloomNet network. 

Gross profit increased 10.2% and 7.6% during the three and nine months ended March 29, 2020, compared to the same periods of the prior year, as a result of the increase in revenues noted above, partially offset by a decrease in gross profit percentage. Gross profit percentage declined 80 and 30 basis points, to 38.5% and 42.2%, during the respective three and nine months ended March 29, 2020, compared to the same periods of the prior year, as a result of product mix, combined with macro-economic headwinds including: (i) rising labor and transportation costs, (ii) tariffs, and (iii) increased costs associated with the changes we have made, and continue to make, to our manufacturing, warehouse and distribution facilities to provide for the safety and wellbeing of our associates in light of COVID-19, including: required social distancing, enhanced facility cleaning and sanitizing schedules, and staggered production shifts. These headwinds have been partially offset by the Company’s strategic pricing initiatives and operational productivity improvements.

1-800-Flowers.com Consumer Floral segment - Gross profit increased by 6.4% and 7.1% during the three and nine months ended March 29, 2020, compared to the same periods of the prior year, as a result of the revenue increases noted above. Gross profit percentage increased 40 basis points and 30 basis points, to 39.3% and 39.1%, during the respective three and nine months ended March 29, 2020, compared to the same periods of the prior year, primarily due to efficient use of promotional pricing programs, partially offset by increased product and transportation costs.

BloomNet Wire Service segment - Gross profit increased by 2.3% and 5.8% during the three and nine months ended March 29, 2020, compared to the same periods of the prior year, due to the increase in revenues noted above, partially offset by a decline in gross margin percentage of 260 and 100 basis points, to 47.3% and 49.7%, respectively, due to product sales mix associated with the impact of COVID-19 on membership and transaction fees, combined with the significant increase in wholesale product revenues and the impact of tariffs on product cost.

Gourmet Foods & Gift Baskets segment - Gross profit increased by 22.8% and 8.3% during the three and nine months ended March 29, 2020, compared to the same periods of the prior year, due to the revenue increase noted above, partially offset by gross profit percentage which decreased 120 basis points to 34.4%, and 50 basis points to 43.0% during the three months ended and nine months ended March 29, 2020 compared to the same periods of the prior year, primarily as a result of product mix and the input cost increases described above.

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Marketing and sales expense

	Three Months Ended									Nine months Ended
	March 29, 2020			March 31, 2019			% Change			March 29, 2020			March 31, 2019			% Change
	(dollars in thousands)
Marketing and sales	$	78,606		$	71,163			10.5	%	$	262,849		$	243,781			7.8	%
Percentage of net revenues		28.2	%		28.6	%					24.5	%		24.6	%

Marketing and sales expense consists primarily of advertising and promotional expenditures, catalog costs, online portal and search costs, retail store and fulfillment operations (other than costs included in cost of revenues) and customer service center expenses, as well as the operating expenses of the Company’s departments engaged in marketing, selling and merchandising activities. 

Marketing and sales expense increased 10.5% and 7.8% during the three and nine months ended March 29, 2020, compared to the same periods of the prior year, primarily due to increased advertising spend within the Gourmet Foods & Gift Baskets and 1-800-Flowers.com Consumer Floral segments, due to the Company’s incremental marketing efforts designed to accelerate revenue growth and capture market share, partially offset by operational efficiencies and platform leverage attributable to the revenue growth. As a result, marketing and sales as a percentage of net revenues decreased 40 basis points, to 28.2% for the three months ended March 29, 2020, and decreased 10 basis points, to 24.5%, for the nine months ended March 29, 2020, in comparison to the same periods of the prior year. 

Technology and development expense

	Three Months Ended									Nine months Ended
	March 29, 2020			March 31, 2019			% Change			March 29, 2020			March 31, 2019			% Change
	(dollars in thousands)
Technology and development	$	11,900		$	11,511			3.4	%	$	34,436		$	32,696			5.3	%
Percentage of net revenues		4.3	%		4.6	%					3.2	%		3.3	%

Technology and development expense consists primarily of payroll and operating expenses of the Company’s information technology group, costs associated with its websites, including hosting, design, content development and maintenance and support costs related to the Company’s order entry, customer service, fulfillment and database systems.

Technology and development expenses increased 3.4% and 5.3% during the three and nine months ended March 29, 2020, compared to the same periods of the prior year, primarily due to increased license and maintenance costs required to support the Company’s technology platform as well as increased hosting costs due to higher usage of cloud storage applications.

General and administrative expense

	Three Months Ended									Nine months Ended
	March 29, 2020			March 31, 2019			% Change			March 29, 2020			March 31, 2019			% Change
	(dollars in thousands)
General and administrative	$	20,031		$	22,447			(10.8	%)	$	64,187		$	64,480			(0.5	%)
Percentage of net revenues		7.2	%		9.0	%					6.0	%		6.5	%

General and administrative expense consists of payroll and other expenses in support of the Company’s executive, finance and accounting, legal, human resources and other administrative functions, as well as professional fees and other general corporate expenses.

General and administrative expense decreased 10.8% and 0.5% during the three and nine months ended March 29, 2020, compared to the same periods of the prior year, primarily due to lower labor costs, attributable to a decrease in the value of Non-Qualified Deferred Compensation Plan (NQ Plan) investments (offset by an equal decrease in other income on the financials statement – see below), and lower insurance costs due to favorable claims experience, partially offset by higher transaction costs associated with the planned acquisition of PersonalizationMall.com. Adjusted to exclude the impact of the decrease in the value of the NQ Plan investments and the PersonalizationMall.com transaction costs, general and administrative expenses would have been $21.7 million and $64.9 million during the three and nine months ended March 29, 2020, representing increases of 2.7% and 1.2% over the respective prior year periods.

Depreciation and amortization expense

	Three Months Ended									Nine months Ended
	March 29, 2020			March 31, 2019			% Change			March 29, 2020			March 31, 2019			% Change
	(dollars in thousands)
Depreciation and amortization	$	7,803		$	7,028			11.0	%	$	23,268		$	22,840			1.9	%
Percentage of net revenues		2.8	%		2.8	%					2.2	%		2.3	%

Depreciation and amortization expense during the three and nine months ended March 29, 2020 increased 11.0% and 1.9%, respectively, compared to the same periods of the prior year, primarily as result of short-lived capital expenditures to support the Company’s IT infrastructure, but was consistent as a percentage of revenues.

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Interest (income) expense, net

	Three Months Ended								Nine months Ended
	March 29, 2020		March 31, 2019			% Change			March 29, 2020		March 31, 2019		% Change
	(dollars in thousands)
Interest (income) expense, net	$	147	$	(30	)		590.0	%	$	1,727	$	2,390		(27.7	%)

Interest (income) expense, net consists primarily of interest expense and amortization of deferred financing costs attributable to the Company’s credit facility (See Note 8 - Debt, in Item 1. for details), net of income earned on the Company’s available cash balances.

Interest (income) expense, net increased during the three months ended March 29, 2020, compared to the same period of the prior year, due to lower interest income on available cash balance, as a result of the Federal Reserve’s March 2020 rate reduction to counteract the impact of COVID-19. Interest (income) expense, net decreased 27.7% during the nine months ended March 29, 2020, compared to the same period of the prior year, due to lower borrowings outstanding, and a lower interest rate resulting from the 2019 Credit Agreement amendment, partially offset by lower rates earned on outstanding cash balances.

Other (income) expense, net

	Three Months Ended								Nine months Ended
	March 29, 2020		March 31, 2019			% Change			March 29, 2020		March 31, 2019			% Change
	(dollars in thousands)
Other (income) expense, net	$	2,605	$	(1,285	)		302.7	%	$	1,714	$	(293	)		685.0	%

Other expense, net for the three and nine months ended March 29, 2020 consists primarily of investment loss on the Company’s Non-Qualified Deferred Compensation Plan assets of approximately $2.6 million and $1.7 million, respectively, whereas in the prior year there was investment income of $1.3 million and $0.3 million, respectively. 

Income Taxes

The Company recorded income tax benefit of $4.0 million and expense of $15.4 million, during the three and nine months ended March 29, 2020, respectively, and income tax benefit of $5.1 million and income tax expense of $11.9 million, during the three and nine months ended March 31, 2019, respectively. The Company’s effective tax rate from operations for the three and nine months ended March 29, 2020 was 29.2% and 23.8% respectively, compared to 38.1% and 21.7% in the same periods of the prior year. The effective tax rates for fiscal 2020 and fiscal 2019 differed from the U.S. federal statutory rate of 21% due to state income taxes and nondeductible expenses for executive compensation, partially offset by various permanent differences and tax credits, including excess tax benefits from stock-based compensation. At March 29, 2020, the Company has an unrecognized tax benefit, including accrued interest and penalties, of approximately $0.9 million. The Company believes that $0.2 million of unrecognized tax positions will be resolved over the next twelve months.

Liquidity and Capital Resources

Liquidity and borrowings

The Company's principal sources of liquidity are cash on hand, cash flows generated from operations and borrowings available under the 2019 Credit Agreement (see Note 8 - Debt in Item 1 for details). At March 29, 2020, the Company had working capital of $185.0 million, including cash and cash equivalents of $232.1 million, compared to working capital of $175.7 million, including cash and cash equivalents of $172.9 million, at June 30, 2019. The March 29, 2020 working capital was negatively impacted by $9.5 million due the establishment of an operating lease liability (current portion) on the balance sheet in the first quarter of fiscal 2020 as a result of the adoption of ASC 842.

Due to the seasonal nature of the Company’s business, the Thanksgiving through Christmas holiday season, which falls within its second fiscal quarter, generates nearly 50% of the Company’s annual revenues, and all of its earnings. The Company utilized cash on hand to fund operations through September 2019. In October 2019, the Company borrowed under its Revolver to fund short-term working capital needs, with borrowings peaking at $20.0 million in November 2019. Cash generated from operations during the Christmas holiday shopping season enabled the Company to repay the Revolver prior to the end of December 2019. Based on current projected cashflows, the Company believes that available cash balances are expected to be sufficient to provide for the Company’s operating needs through fiscal 2021.

While we believe that our sources of funding will be sufficient to meet our anticipated operating cash needs for at least the next twelve months, any projections of future cash needs and cash flows are subject to substantial uncertainty. We continually evaluate, and will, from time to time, consider the acquisition of, or investment in, complementary businesses, products, services, capital infrastructure, and technologies, which might affect our liquidity requirements or cause us to require additional financing. 

Our sources and uses of cash were not materially impacted by COVID-19 for the quarter ended March 29, 2020 and, to date, we have not identified any material liquidity deficiencies as a result of the COVID-19 pandemic. Based on the information currently available to us, we do not expect the impact of COVID-19 to have a material impact on our liquidity. We will continue to monitor and assess the impact COVID-19 may have on our business and financial results. See Part II. Item 1A. “Risk Factors” and Part I. Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further information.

Cash Flows

Net cash provided by operating activities of $117.3 million, for the nine months ended March 29, 2020, was primarily attributable to the Company’s net income during the period, adjusted by non-cash charges for depreciation/amortization and stock based compensation, combined with seasonal changes in working capital, including increases in accounts payable and accrued expenses, and reductions in inventory, partially offset by increases in receivables.

Net cash used in investing activities of $44.0 million, for the nine months ended March 29, 2020, was primarily attributable to the acquisition of Shari’s Berries for $20.5 million, capital expenditures of $22.3 million related to the Company's technology initiatives and Gourmet Foods & Gift Baskets segment manufacturing production and warehousing equipment, and the purchase of equity investments of $1.2 million.

Net cash used in financing activities of $14.2 million, for the nine months ended March 29, 2020, was primarily due to net bank repayments of $3.8 million and the acquisition of $10.7 million of treasury stock.

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Stock Repurchase Program

See Item 2 in Part II below for details.

Contractual Obligations

At March 29, 2020, the Company’s contractual obligations consist of:

● Long-term debt obligations - payments due under the Company's 2019 Credit Agreement (see Note 8 - Debt in Item 1 for details).

● Operating lease obligations – payments due under the Company’s long-term operating leases (see Note 13 - Leases in Item 1 for details).

● Purchase commitments - consisting primarily of inventory and IT related equipment purchase orders and license agreements made in the ordinary course of business – see below for the contractual payments due by period.

	Payments due by period
	(in thousands)
	Remaining Fiscal 2020		Fiscal 2021		Fiscal 2022		Fiscal 2023		Fiscal 2024		Thereafter		Total
Purchase commitments	$	37,722	$	24,163	$	6,845	$	4,725	$	1,170	$	-	$	74,625

Critical Accounting Policies and Estimates

As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, the discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements of 1-800-FLOWERS.COM, Inc., which have been prepared in conformity with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances, and management evaluates its estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. The Company’s most critical accounting policies relate to goodwill, other intangible assets and income taxes. There have been no significant changes to the assumptions and estimates related to the Company’s critical accounting policies, since June 30, 2019, except for the adoption of ASC 842 (see Note 1 - Accounting Policies in Item 1 above for details). 

Recently Issued Accounting Pronouncements 

See Note 1 - Accounting Policies in Item 1 for details regarding the impact of accounting standards that were recently issued on our consolidated financial statements.

Forward Looking Information and Factors that May Affect Future Results

Our disclosure and analysis in this report contain 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,” “project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “goal,” “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 that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements, including:

●	the Company’s ability:
	o   to achieve revenue and profitability;
	o   to leverage its operating platform and reduce operating expenses;
	o   to manage the increased seasonality of its business;
	o   to cost effectively acquire and retain customers;
	o   to effectively integrate and grow acquired companies;
	o   to reduce working capital requirements and capital expenditures;
	o   to compete against existing and new competitors;
	o   to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; and
	o   to cost effectively manage inventories;
●	the outcome of contingencies, including legal proceedings in the normal course of business; and
●	general consumer sentiment and economic conditions that may affect levels of discretionary customer purchases of the Company’s products; and
●	the impact of COVID-19 on our business and financial statements.

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Forms 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission. Our Annual Report on Form 10-K filing for the fiscal year ended June 30, 2019 listed various important factors that could cause actual results to differ materially from expected and historic results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. Readers can find them in Part I, Item 1A, of that filing under the heading “Cautionary Statements Under the Private Securities Litigation Reform Act of 1995”. We incorporate that section of that Form 10-K in this filing and investors should refer to it. In addition, please refer to additional risk factors in Part II, Item 1A in this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from the effect of interest rate changes.

Interest Rate Risk

The Company’s exposure to market risk for changes in interest rates relates primarily to the Company’s investment of available cash balances and its long-term debt. The Company generally invests its cash and cash equivalents in investment grade corporate and U.S. government securities. Due to the currently low rates of return the Company is receiving on its cash equivalents, the potential for a significant decrease in short-term interest rates is low and, therefore, a further decrease would not have a material impact on the Company’s interest income. Borrowings under the Company’s 2019 Credit Agreement bear interest at a variable rate, plus an applicable margin, and therefore expose the Company to market risk for changes in interest rates. The effect of a 50 basis point increase in current interest rates on the Company’s interest expense would be approximately $0.1 million and $0.4 million during the three and nine months ended March 29, 2020.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures 

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of March 29, 2020. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 29, 2020.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the Company’s evaluation required by Rules 13a-15(d) or 15d-15(d) of the Securities Exchange Act of 1934 during the quarter ended March 29, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. To the extent our normal procedures and controls related to our financial close or other reporting processes were adversely impacted by the COVID-19 outbreak, we took appropriate actions and safeguards to reasonably ensure the fair presentation of the financial statements in accordance with GAAP.

PART II. – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Litigation

Bed Bath & Beyond:

On April 1, 2020, Bed Bath & Beyond Inc. (“Bed Bath”) commenced an action against the Company in the Court of Chancery for the State of Delaware, which is captioned Bed Bath & Beyond Inc. v. 1-800-Flowers.com, et ano., C.A. (the “Complaint”), alleging a breach of the Equity Purchase Agreement (the “Agreement”), dated February 14, 2020, between Bed Bath, PersonalizationMall.com, LLC (“Personalization Mall”), the Company and a subsidiary of the Company (the “Purchaser”) pursuant to which Bed Bath agreed to sell to Purchaser, and the Purchaser agreed to purchase from Bed Bath, all of the issued and outstanding membership interests of Personalization Mall.  The action was initiated after the Company requested a reasonable delay in the closing under the Agreement due to the unprecedented circumstances created by the COVID-19 pandemic.  The Complaint requests an order of specific performance to consummate the transaction under the Agreement plus attorney’s fees and costs in connection with the action. The Company filed its answer to the Complaint on April 17, 2020 and an order governing expedited proceedings was approved on April 9, 2020 that sets a trial date for late September.  The Company intends to vigorously defend itself against this lawsuit and no assurance can be given as to the ultimate outcome of this matter. At this time the proceedings are in the very early stages, and we are unable to determine or estimate the amount of possible loss or range of loss.

In addition, there are various claims, lawsuits, and pending actions against the Company and its subsidiaries incident to the operations of its businesses. It is the opinion of management, after consultation with counsel, that the final resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

ITEM 1A. RISK FACTORS.

The following additional risk factor related to COVID-19 should be read in conjunction with the Company’s risk factors as discussed in Part 1, Item 1A-Risk Factors in the Company’s Annual Report on Form 10-K for the year ended June 30, 2019. The developments described in this additional risk factor have heightened, or in some cases manifested, certain of the risks disclosed in the risk factor section of our previously filed Form 10-K, and such risk factors are further qualified by the information relating to COVID-19 that is described in this Form 10-Q, including in the additional risk factor below. Except as described herein, there have been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the year ended June 30, 2019.

The impact of the spread of COVID-19 is creating significant uncertainty for our business, financial condition and results of operations and for the prices of our publicly traded securities.

The extent of the impact of the COVID-19 pandemic on our business and financial results will depend on numerous evolving factors that we are not able to accurately predict and which will vary by market, including the duration and scope of the pandemic, global economic conditions during and after the pandemic, governmental actions that have been taken, or may be taken in the future, in response to the pandemic, and changes in consumer behavior in response to the pandemic, some of which may be more than just temporary.

Our operations expose us to risks associated with the COVID-19 pandemic, which has resulted in challenging operating environments. COVID-19 has spread across the globe to the countries and states in which we do business. Authorities in many of these markets have implemented numerous measures to stall the spread of COVID-19, including travel bans and restrictions, quarantines, curfews, shelter in place orders, and business shutdowns. These measures have impacted and will further impact us and our business partners (such as customers, employees, suppliers, franchisees, florists and other third parties with whom we do business). There is considerable uncertainty regarding how these measures and future measures in response to the pandemic will impact our business, including whether they will result in further changes in demand for our products, further increases in operating costs (whether as a result of changes to our supply chain or increases in employee costs or otherwise), how they will further impact our supply chain and whether they will result in further reduced availability of air or other commercial transport, port closures or border restrictions, each or all of which can impact our ability to make, manufacture, distribute and sell our products. In addition, measures that impact our ability to access our offices, plants, warehouses, distribution centers or other facilities, or that impact the ability of our business partners to do the same, may impact the availability of our and their employees, many of whom are not able to perform their job functions remotely. If a significant percentage of our or our business partners’ workforce is unable to work, our operations will be negatively impacted. Any sustained interruption in our or our business partners’ operations, distribution network or supply chain or any significant continuous shortage of raw materials or other supplies as a result of these measures, restrictions or disruptions can impair our ability to make, manufacture, distribute or sell our products.

Compliance with governmental measures imposed in response to COVID-19 has caused and may continue to cause us to incur additional costs, and any inability to comply with such measures can subject us to restrictions on our business activities, fines, and other penalties, any of which can adversely affect our business. The continuation of the COVID-19 pandemic and various governmental responses may continue to restrict our ability to carry on business development activities and business-related travel, and our sales activity may be adversely affected. In addition, the increase in certain of our employees working remotely has amplified certain risks to our business, including increased demand on our information technology resources and systems, increased phishing and other cybersecurity attacks as cybercriminals try to exploit the uncertainty surrounding the COVID-19 pandemic, and an increase in the number of points of potential attack, such as laptops and mobile devices (both of which are now being used in increased numbers), to be secured, and any failure to effectively manage these risks, including to timely identify and appropriately respond to any cyberattacks, may adversely affect our business.

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Public concern regarding the risk of contracting COVID-19 impacts demand from customers, including due to customers not leaving their homes or otherwise shopping in a different manner than they historically have or because some of our customers have lower discretionary income due to unemployment or reduced or limited work as a result of measures taken in response to the pandemic. As we sell a wide variety of products, the profile of the products we sell and the amount of revenue attributable to such products varies by jurisdiction and changes in demand as a result of COVID-19 will vary in scope and timing across these markets. In addition, changes in consumer purchasing and consumption patterns may result in changes in demand for our products, thereby impacting our earnings. Any reduced demand for our products or change in customers purchasing and consumption patterns, as well as continued economic uncertainty, can adversely affect our customers’ and business partners’ financial condition, resulting in an inability to pay for our products, reduced or canceled orders of our products, closing of florist or franchise locations, stores, or our business partners’ inability to supply us with ingredients or other items necessary for us to make, manufacture, distribute or sell our products. Such adverse changes in our customers’ or business partners’ financial condition may also result in our recording impairment charges for our inability to recover or collect any accounts receivable, owned or leased assets, or prepaid expenses. In addition, economic uncertainty associated with the COVID-19 pandemic has resulted in volatility in the global capital and credit markets, and in foreign currency exchange rates, commodity prices, and interest rates, which can impair our ability to access these markets on terms commercially acceptable to us, or at all. Even after the COVID-19 global pandemic has subsided, we may experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.

While we have developed and implemented and continue to develop and implement health and safety protocols, business continuity plans and crisis management protocols in an effort to try to mitigate the negative impact of COVID-19 on our employees and our business, there can be no assurance that we will be successful in our efforts, and as a result, our business, financial condition and results of operations and the prices of our publicly traded securities may be adversely affected.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company has a stock repurchase plan through which purchases can be made from time to time in the open market and through privately negotiated transactions, subject to general market conditions. The repurchase program is financed utilizing available cash. On June 27, 2019, the Company’s Board of Directors authorized an increase to its stock repurchase plan of up to $30.0 million. As of March 29, 2020, $19.3 million remained authorized under the plan.

The following table sets forth, for the months indicated, the Company’s purchase of common stock during the nine months of fiscal 2020, which includes the period July 1, 2019 through March 29, 2020:

Period	Total Number of Shares Purchased		Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
	(in thousands, except average price paid per share)
07/01/19 - 07/28/19		-	$	-		-	$	30,000
07/29/19 - 08/25/19		-	$	-		-	$	30,000
08/26/19 - 09/29/19		2,113	$	14.85		2,113	$	29,969
09/30/19 - 10/27/19		-	$	-		-	$	29,969
10/28/19 - 11/24/19		158,750	$	13.24		158,750	$	27,867
11/25/19 - 12/29/19		210,000	$	13.76		210,000	$	24,970
12/30/19 - 01/26/20		270,000	$	14.43		270,000	$	21,065
01/27/20 - 02/23/20		112,941	$	15.30		112,941	$	19,333
02/24/20 - 03/29/20		-	$	-		-	$	19,333
Total		753,804	$	14.13		753,804

(1) Average price per share excludes commissions and other transaction fees.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable. 

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

2.1	Equity Purchase Agreement dated as of February 14, 2020, by an among 1-800-Flowers.com, Inc., 800-Flowers, Inc. PersonalizationMall.com, LLC, and Bed Bath & Beyond Inc. (Current Report on Form 8-K filed on February 18, 2020, Exhibit 2.1).
31.1	Certification of the principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
31.2	Certification of the principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
32.1	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Document
101.PRE	XBRL Taxonomy Definition Presentation Document

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	1-800-FLOWERS.COM, Inc.  (Registrant)
Date:      May 8, 2020	/s/ Christopher G. McCann       Christopher G. McCann Chief Executive Officer,  Director and President (Principal Executive Officer)
Date:      May 8, 2020	/s/ William E. Shea       William E. Shea Senior Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(RULE 13a-14 (a))

I, Christopher G. McCann, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of 1-800-FLOWERS.COM, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2020	/s/ Christopher G. McCann
	Christopher G. McCann
	Chief Executive Officer,
	Director and President

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(RULE 13a-14(a))

I, William E. Shea, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of 1-800-FLOWERS.COM, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2020	/s/ William E. Shea
	William E. Shea
	Senior Vice President, Treasurer and
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of 1-800-FLOWERS.COM, Inc. (the “Company”) hereby certifies, to the best of such officer's knowledge, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended March 29, 2020, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934; as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 8, 2020	/s/ Christopher G. McCann
	Christopher G. McCann Chief Executive Officer, Director and President
Dated: May 8, 2020	/s/ William E. Shea
	William E. Shea Senior Vice President, Treasurer and Chief Financial Officer

These certifications are furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certifications will not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates them by reference.

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Note 5 - Inventory

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note

5

– Inventory

The Company’s inventory, stated at cost, which is

not

in excess of market, includes purchased and manufactured finished goods for sale, packaging supplies, crops, raw material ingredients for manufactured products and associated manufacturing labor and is classified as follows:

	March 29, 2020		June 30, 2019
	(in thousands)
Finished goods	$	32,361	$	36,820
Work-in-process		10,332		17,535
Raw materials		31,344		38,006
Total inventory	$	74,037	$	92,361

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Note 9 - Property, Plant and Equipment

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

 

Note

9

- Property, Plant and Equipment

The Company’s property, plant and equipment consists of the following:

	March 29, 2020			June 30, 2019
	(in thousands)
Land	$	30,789		$	30,789
Orchards in production and land improvements		11,701			11,339
Building and building improvements		60,512			59,236
Leasehold improvements		14,182			13,861
Production equipment and furniture and fixtures		64,461			61,415
Computer and telecommunication equipment		54,664			53,694
Software		144,746			132,078
Capital projects in progress - orchards		12,489			9,902
Property, plant and equipment, gross		393,544			372,314
Accumulated depreciation and amortization		(227,145	)		(205,633	)
Property, plant and equipment, net	$	166,399		$	166,681

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Note 3 - Stock-based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Mar. 29, 2020 USD ($) $ / shares shares
Outstanding, options (in shares) | shares	1,365,000
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 2.48
Granted, options (in shares) | shares
Granted, weighted average exercise price (in dollars per share) | $ / shares
Exercised, options (in shares) | shares	(150,000)
Exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 1.90
Forfeited, options (in shares) | shares
Forfeited, weighted average exercise price (in dollars per share) | $ / shares
Outstanding, options (in shares) | shares	1,215,000
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 2.55
Outstanding, weighted average remaining contractual term (Year)	1 year 182 days
Outstanding, aggregate intrinsic value | $	$ 12,550
Exercisable, options (in shares) | shares	1,215,000
Exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 2.55
Exercisable, weighted average remaining contractual term (Year)	1 year 182 days
Exercisable, aggregate intrinsic value | $	$ 12,550

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Note 2 - Net Income (Loss) Per Common Share - Basic and Diluted Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 29, 2020	Mar. 31, 2019	Mar. 29, 2020	Mar. 31, 2019
Net income (loss)	$ (9,657)	$ (8,241)	$ 49,224	$ 43,071
Basic (in shares)	64,348	64,194	64,517	64,383
Effect of dilutive securities (in shares)			1,861	2,073
Adjusted weighted-average shares and assumed conversions (in shares)	64,348	64,194	66,378	66,456
Net income (loss) per common share
Basic net income (loss) per common share (in dollars per share)	$ (0.15)	$ (0.13)	$ 0.76	$ 0.67
Diluted net income (loss) per common share (in dollars per share)	$ (0.15)	$ (0.13)	$ 0.74	$ 0.65
Share-based Payment Arrangement, Option [Member]
Effect of dilutive securities (in shares)			1,035	1,444
Restricted Stock [Member]
Effect of dilutive securities (in shares)			826	629

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Note 10 - Fair Value Measurements (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Carrying Value		Fair Value Measurements Assets (Liabilities)
			Level 1		Level 2		Level 3
	(in thousands)
As of March 29, 2020:
Trading securities held in a “rabbi trust” (1)	$	11,360	$	11,360	$	-	$	-
Total assets (liabilities) at fair value	$	11,360	$	11,360	$	-	$	-
As of June 30, 2019:
Trading securities held in a “rabbi trust” (1)	$	11,816	$	11,816	$	-	$	-
Total assets (liabilities) at fair value	$	11,816	$	11,816	$	-	$	-

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Note 9 - Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Mar. 29, 2020	Jun. 30, 2019
Property, plant, and equipment, gross	$ 393,544	$ 372,314
Accumulated depreciation and amortization	(227,145)	(205,633)
Property, plant and equipment, net	166,399	166,681
Land [Member]
Property, plant, and equipment, gross	30,789	30,789
Orchards in Production and Land Improvements [Member]
Property, plant, and equipment, gross	11,701	11,339
Building and Building Improvements [Member]
Property, plant, and equipment, gross	60,512	59,236
Leasehold Improvements [Member]
Property, plant, and equipment, gross	14,182	13,861
Furniture and Fixtures [Member]
Property, plant, and equipment, gross	64,461	61,415
Computer and Telecommunication Equipment [Member]
Property, plant, and equipment, gross	54,664	53,694
Software and Software Development Costs [Member]
Property, plant, and equipment, gross	144,746	132,078
Capital Projects in Progress [Member]
Property, plant, and equipment, gross	$ 12,489	$ 9,902

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Note 2 - Net Income (Loss) Per Common Share

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

2

– Net Income 

(Loss)

Per Common Share

The following table sets forth the computation of basic and diluted net income (loss) per common share:

	Three Months Ended						Nine Months Ended
	March 29, 2020			March 3 1 , 201 9			March 29, 2020		March 31 , 201 9
	(in thousands, except per share data)
Numerator:
Net income (loss)	$	(9,657	)	$	(8,241	)	$	49,224	$	43,071
Denominator:
Weighted average shares outstanding		64,348			64,194			64,517		64,383
Effect of dilutive securities:
Employee stock options		-			-			1,035		1,444
Employee restricted stock awards		-			-			826		629
		-			-			1,861		2,073
Adjusted weighted-average shares and assumed conversions		64,348			64,194			66,378		66,456
Net income (loss) per common share
Basic	$	(0.15	)	$	(0.13	)	$	0.76	$	0.67
Diluted	$	(0.15	)	$	(0.13	)	$	0.74	$	0.65

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Note 12 - Business Segments - Segment Performance (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Mar. 29, 2020	Mar. 31, 2019	Mar. 29, 2020	Mar. 31, 2019
Net revenues		$ 278,776	$ 248,413	$ 1,071,681	$ 989,225
Depreciation and amortization		(7,803)	(7,028)	(23,268)	(22,840)
Operating income (loss)		(10,888)	(14,629)	68,030	57,090
Operating Segments [Member]
Contribution margin		19,189	17,642	162,881	147,233
Corporate, Non-Segment [Member]
Net revenues		112	263	472	845
Corporate	[1]	(22,274)	(25,243)	(71,583)	(67,303)
Intersegment Eliminations [Member]
Net revenues		(276)	(301)	(1,176)	(1,202)
Consumer Floral [Member]
Net revenues		152,620	144,821	359,104	338,003
Consumer Floral [Member] | Operating Segments [Member]
Net revenues		152,620	144,821	359,104	338,003
Contribution margin		15,439	15,364	34,853	32,667
Consumer Floral [Member] | Corporate, Non-Segment [Member]
Net revenues
Consumer Floral [Member] | Intersegment Eliminations [Member]
Net revenues
BloomNet Wire Service [Member]
Net revenues		30,414	28,185	81,576	75,613
BloomNet Wire Service [Member] | Operating Segments [Member]
Net revenues		30,414	28,185	81,576	75,613
Contribution margin		10,025	9,480	27,516	25,375
BloomNet Wire Service [Member] | Corporate, Non-Segment [Member]
Net revenues
BloomNet Wire Service [Member] | Intersegment Eliminations [Member]
Net revenues
Gourmet Food and Gift Baskets [Member]
Net revenues		95,906	75,445	631,705	575,966
Gourmet Food and Gift Baskets [Member] | Operating Segments [Member]
Net revenues		95,906	75,445	631,705	575,966
Contribution margin		(6,275)	(7,202)	100,512	89,191
Gourmet Food and Gift Baskets [Member] | Corporate, Non-Segment [Member]
Net revenues
Gourmet Food and Gift Baskets [Member] | Intersegment Eliminations [Member]
Net revenues

[1] Corporate expenses consist of the Company's enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, as well as Stock-Based Compensation. In order to leverage the Company's infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 29, 2020	Mar. 31, 2019	Mar. 29, 2020	Mar. 31, 2019
Net income (loss)	$ (9,657)	$ (8,241)	$ 49,224	$ 43,071
Other comprehensive income (loss) (currency translation & other miscellaneous items)	1	3	17	(58)
Comprehensive income (loss)	$ (9,656)	$ (8,238)	$ 49,241	$ 43,013

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Note 13 - Leases - Future Minimum Payments Under Non-cancelable Operating Leases (Details) $ in Thousands	Jun. 30, 2019 USD ($)
2020	$ 16,588
2021	13,490
2022	12,081
2023	9,957
2024	9,498
Thereafter	44,953
Total Future Minimum Lease Payments	$ 106,567

XML

Document And Entity Information - shares	9 Months Ended
	Mar. 29, 2020	May 01, 2020
Document Information [Line Items]
Entity Registrant Name	1 800 FLOWERS COM INC
Entity Central Index Key	0001084869
Trading Symbol	flws
Current Fiscal Year End Date	--06-28
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Interactive Data Current	Yes
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Mar. 29, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false
Title of 12(b) Security	Class A common stock
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		28,542,823
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		35,739,913

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Note 8 - Debt - Summary of Current and Long-term Debt (Details) - USD ($) $ in Thousands		Mar. 29, 2020	Jun. 30, 2019
Deferred financing costs		$ (2,602)	$ (3,027)
Debt instrument, carrying amount		93,648	96,973
Less: current debt		5,000	5,000
Long-term debt		88,648	91,973
Line of Credit [Member]
Revolver	[1]
Term Loan [Member]
Term Loan	[1]	$ 96,250	$ 100,000

[1] On May 31, 2019, the Company entered into a Second Amended and Restated Credit Agreement (the 2019 Credit Agreement) with JPMorgan Chase Bank, N.A. as administrative agent, and a group of lenders. The 2019 Credit Agreement amended and restated the Companys existing amended and restated credit agreement dated as of December 23, 2016 (the 2016 Credit Agreement) to, among other modifications: (i) increase the amount of the outstanding term loan (Term Loan) from approximately $97 million to $100 million, (ii) extend the maturity date of the outstanding Term Loan and the revolving credit facility (Revolver) by approximately 29 months to May 31, 2024, and (iii) decrease the applicable interest rate margins for LIBOR and base rate loans by 25 basis points. The Term Loan is payable in 19 quarterly installments of principal and interest beginning on September 29, 2019, with escalating principal payments, at the rate of 5.0% per annum for the first eight payments, and 10.0% per annum for the remaining 11 payments, with the remaining balance of $62.5 million due upon maturity. The Revolver, in the aggregate amount of $200 million, subject to seasonal reduction to an aggregate amount of $100 million for the period from January 1 through August 1, may be used for working capital and general corporate purposes, subject to certain restrictions.

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Note 6 - Goodwill and Intangible Assets - Goodwill by Segment (Details) $ in Thousands	9 Months Ended
	Mar. 29, 2020 USD ($)
Goodwill	$ 62,590
Acquisition of Shari’s Berries	12,121
Goodwill	74,711
Consumer Floral [Member]
Goodwill	17,441
Acquisition of Shari’s Berries
Goodwill	17,441
BloomNet Wire Service [Member]
Goodwill
Acquisition of Shari’s Berries
Goodwill
Gourmet Food and Gift Baskets [Member]
Goodwill	45,149
Acquisition of Shari’s Berries	12,121
Goodwill	$ 57,270

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Note 4 - Acquisition (Details Textual) - USD ($) $ in Thousands	Aug. 14, 2019	Mar. 29, 2020	Jun. 30, 2019
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	$ 7,540
Goodwill, Ending Balance	12,121	$ 74,711	$ 62,590
Shari's Berries [Member]
Business Combination, Consideration Transferred, Total	20,500
Goodwill, Ending Balance	12,100
Shari's Berries [Member] | Customer Lists [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	$ 600
Finite-Lived Intangible Asset, Useful Life (Year)	2 years
Shari's Berries [Member] | Trade Names [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	$ 6,900

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Note 13 - Leases

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note

13

– Leases

The Company currently leases plants, warehouses, offices, store facilities, and equipment under various leases through fiscal

2034.

Most lease agreements are of a long-term nature (over a year), although the Company does also enter into short-term leases, primarily for seasonal needs. Lease agreements

may

contain renewal options and rent escalation clauses and require the Company to pay real estate taxes, insurance, common area maintenance and operating expenses applicable to the leased properties. The Company accounts for its leases in accordance with ASC

842.

At contract inception, we determine whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time, by assessing whether we have the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset.

At the lease commencement date, we determine if a lease should be classified as an operating or a finance lease (we currently have

no

finance leases) and recognize a corresponding lease liability and a right-of-use asset on our Balance Sheet. The lease liability is initially and subsequently measured as the present value of the remaining fixed minimum rental payments (including base rent and fixed common area maintenance) using discount rates as of the commencement date. Variable payments (including most utilities, real estate taxes, insurance and variable common area maintenance) are expensed as incurred. The right-of-use asset is initially and subsequently measured at the carrying amount of the lease liability adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use asset. Right-of-use assets are assessed for impairment using the long-lived assets impairment guidance. The discount rate used to determine the present value of lease payments is our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as we generally cannot determine the interest rate implicit in the lease.

We recognize expense for our operating leases on a straight-line basis over the lease term. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Renewal option periods are included in the measurement of lease liability, where the exercise is reasonably certain to occur. Key estimates and judgments in accounting for leases include how we determine: (

1

) lease payments, (

2

) lease term and (

3

) the discount rate used in calculating the lease liability.

Additional information related to our leases is as follows:

	Three Months Ended			Nine Months Ended
	March 29, 2020			March 29, 2020
	(in thousands)
Lease costs:
Operating lease costs	$	3,384		$	10,690
Variable lease costs		3,679			11,565
Short-term lease cost		1,013			5,983
Sublease income		(243	)		(721	)
Total lease costs	$	7,833		$	27,517

	Nine Months Ended
	March 29, 2020
	(in thousands)
Cash paid for amounts included in measurement of operating lease liabilities	$	9,014
Right-of-use assets obtained in exchange for new operating lease liabilities	$	178

	March 29, 2020
	(in thousands)
Weighted-average remaining lease term - operating leases	9.5 years
Weighted-discount rate - operating leases		3.8	%

Maturities of lease liabilities in accordance with ASC

842

as of

March 29, 2020

are as follows (in thousands):

Remainder of 2020	$	3,195
2021		11,683
2022		10,313
2023		9,905
2024		9,455
Thereafter		44,897
Total Future Minimum Lease Payments		89,448
Less Imputed Remaining Interest		15,673
Total	$	73,775

At

June 30, 2019,

in accordance with ASC

840,

future minimum rental payments under non-cancelable operating leases with initial terms of

one

year or more consisted of the following (in thousands):

2020	$	16,588
2021		13,490
2022		12,081
2023		9,957
2024		9,498
Thereafter		44,953
Total Future Minimum Lease Payments	$	106,567

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Note 2 - Net Income (Loss) Per Common Share (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended						Nine Months Ended
	March 29, 2020			March 3 1 , 201 9			March 29, 2020		March 31 , 201 9
	(in thousands, except per share data)
Numerator:
Net income (loss)	$	(9,657	)	$	(8,241	)	$	49,224	$	43,071
Denominator:
Weighted average shares outstanding		64,348			64,194			64,517		64,383
Effect of dilutive securities:
Employee stock options		-			-			1,035		1,444
Employee restricted stock awards		-			-			826		629
		-			-			1,861		2,073
Adjusted weighted-average shares and assumed conversions		64,348			64,194			66,378		66,456
Net income (loss) per common share
Basic	$	(0.15	)	$	(0.13	)	$	0.76	$	0.67
Diluted	$	(0.15	)	$	(0.13	)	$	0.74	$	0.65

XML

Note 6 - Goodwill and Intangible Assets (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Schedule of Goodwill [Table Text Block]

	1-800-Flowers.com Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Total
	(in thousands)
Balance at June 30, 2019	$	17,441	$	-	$	45,149	$	62,590
Acquisition of Shari’s Berries		-		-		12,121		12,121
Balance at March 29, 2020	$	17,441	$	-	$	57,270	$	74,711

The Company’s other intangible assets consist of the following:

Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Table Text Block]

			March 29, 2020						June 30, 2019
	Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in years)		(in thousands)
Intangible assets with determinable lives
Investment in licenses		14-16	$	7,420	$	6,227	$	1,193	$	7,420	$	6,148	$	1,272
Customer lists		2-10		12,825		10,299		2,526		12,184		9,798		2,386
Other		5-14		2,946		2,356		590		2,946		2,280		666
Total intangible assets with determinable lives				23,191		18,882		4,309		22,550		18,226		4,324
Trademarks with indefinite lives				62,191		-		62,191		55,291		-		55,291
Total identifiable intangible assets			$	85,382	$	18,882	$	66,500	$	77,841	$	18,226	$	59,615

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Note 6 - Goodwill and Intangible Assets (Details Textual) $ in Millions	Mar. 29, 2020 USD ($)
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year	$ 0.3
Finite-Lived Intangible Assets, Amortization Expense, Year Two	0.9
Finite-Lived Intangible Assets, Amortization Expense, Year Three	0.6
Finite-Lived Intangible Assets, Amortization Expense, Year Four	0.5
Finite-Lived Intangible Assets, Amortization Expense, Year Five	0.5
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	$ 1.5

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Note 3 - Stock-based Compensation - Non-vested Restricted Stock Activity (Details) - Restricted Stock [Member]	9 Months Ended
	Mar. 29, 2020 $ / shares shares
Non-vested (in shares) | shares	1,438,592
Non-vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 10.81
Granted (in shares) | shares	736,555
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 13.09
Vested (in shares) | shares	(468,683)
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 10.37
Forfeited (in shares) | shares	(59,816)
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 12.54
Non-vested (in shares) | shares	1,646,648
Non-vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 11.89

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Note 8 - Debt (Details Textual) - USD ($) $ in Thousands		May 31, 2019	Mar. 29, 2020	Jun. 30, 2019	May 30, 2019
Credit Facility 2014 [Member] | Revolving Credit Facility [Member]
Proceeds from Lines of Credit, Total		$ 200,000
Line of Credit Facility, Maximum Borrowing Capacity		100,000
Term Loan [Member]
Long-term Debt, Total	[1]		$ 96,250	$ 100,000
Long-Term Debt, Maturity, Remainder of Fiscal Year			1,250
Long-term Debt, Maturities, Repayments of Principal in Year Two			5,000
Long-term Debt, Maturities, Repayments of Principal in Year Three			10,000
Long-term Debt, Maturities, Repayments of Principal in Year Four			10,000
Long-term Debt, Maturities, Repayments of Principal in Year Five			$ 70,000
Term Loan [Member] | Credit Facility 2014 [Member]
Long-term Debt, Total		$ 100,000			$ 97,000
Debt Instrument, Number of Installment Payments		19
Debt Instrument, Principal Payment Percentage In First Eight Payments		5.00%
Debt Instrument, Principal Payment Percentage In Remaining Eleven Payments		10.00%
Debt Instrument, Principal Payment Due Upon Maturity		$ 62,500
Term Loan [Member] | Credit Facility 2014 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate, Increase (Decrease)		(0.25%)
Line of Credit and Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Base Rate, Basis Spread on Variable Rate		1.00%
Line of Credit and Term Loan [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member]
Debt Instrument, Base Rate, Basis Spread on Variable Rate		0.50%

[1] On May 31, 2019, the Company entered into a Second Amended and Restated Credit Agreement (the 2019 Credit Agreement) with JPMorgan Chase Bank, N.A. as administrative agent, and a group of lenders. The 2019 Credit Agreement amended and restated the Companys existing amended and restated credit agreement dated as of December 23, 2016 (the 2016 Credit Agreement) to, among other modifications: (i) increase the amount of the outstanding term loan (Term Loan) from approximately $97 million to $100 million, (ii) extend the maturity date of the outstanding Term Loan and the revolving credit facility (Revolver) by approximately 29 months to May 31, 2024, and (iii) decrease the applicable interest rate margins for LIBOR and base rate loans by 25 basis points. The Term Loan is payable in 19 quarterly installments of principal and interest beginning on September 29, 2019, with escalating principal payments, at the rate of 5.0% per annum for the first eight payments, and 10.0% per annum for the remaining 11 payments, with the remaining balance of $62.5 million due upon maturity. The Revolver, in the aggregate amount of $200 million, subject to seasonal reduction to an aggregate amount of $100 million for the period from January 1 through August 1, may be used for working capital and general corporate purposes, subject to certain restrictions.

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Note 8 - Debt (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Schedule of Debt [Table Text Block]

	March 29, 2020			June 30, 2019
	(in thousands)
Revolver (1)	$	-		$	-
Term Loan (1)		96,250			100,000
Deferred financing costs		(2,602	)		(3,027	)
Total debt		93,648			96,973
Less: current debt		5,000			5,000
Long-term debt	$	88,648		$	91,973

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Note 14 - Commitments and Contingencies

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

14

– Commitments and Contingencies

Litigation

Bed Bath & Beyond

:

On

April 1, 2020,

Bed Bath & Beyond Inc. (“Bed Bath”) commenced an action against the Company in the Court of Chancery for the State of Delaware, which is captioned

Bed Bath & Beyond Inc. v.

1

-

800

-Flowers.com, et ano.

, C.A. (the “Complaint”), alleging a breach of the Equity Purchase Agreement (the “Agreement”), dated

February 14, 2020,

between Bed Bath, PersonalizationMall.com, LLC (“Personalization Mall”), the Company and a subsidiary of the Company (the “Purchaser”) pursuant to which Bed Bath agreed to sell to Purchaser, and the Purchaser agreed to purchase from Bed Bath, all of the issued and outstanding membership interests of Personalization Mall.  The action was initiated after the Company requested a reasonable delay in the closing under the Agreement due to the unprecedented circumstances created by the COVID-

19

pandemic.  The Complaint requests an order of specific performance to consummate the transaction under the Agreement plus attorney’s fees and costs in connection with the action. The Company filed its answer to the Complaint on

April 17, 2020

and an order governing expedited proceedings was approved on

April 9, 2020

that sets a trial date for late

September. 

The Company intends to vigorously defend itself against this lawsuit and

no

assurance can be given as to the ultimate outcome of this matter. At this time the proceedings are in the very early stages, and we are unable to determine or estimate the amount of possible loss or range of loss.

In addition, there are various claims, lawsuits, and pending actions against the Company and its subsidiaries incident to the operations of its businesses. It is the opinion of management, after consultation with counsel, that the final resolution of such claims, lawsuits and pending actions will

not

have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

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Note 3 - Stock-based Compensation (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Share-based Payment Arrangement, Cost by Plan [Table Text Block]

	Three Months Ended				Nine Months Ended
	March 29, 2020		March 3 1 , 201 9		March 29, 2020		March 3 1 , 201 9
	(in thousands)
Stock options	$	6	$	67	$	99	$	250
Restricted stock		2,390		1,836		6,342		4,281
Total		2,396		1,903		6,441		4,531
Deferred income tax benefit		594		328		1,597		982
Stock-based compensation expense, net	$	1,802	$	1,575	$	4,844	$	3,549

Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Three Months Ended				Nine Months Ended
	March 29, 2020		March 3 1 , 201 9		March 29, 2020		March 31 , 201 9
	(in thousands)
Marketing and sales	$	1,097	$	830	$	2,960	$	1,816
Technology and development		181		118		473		274
General and administrative		1,118		955		3,008		2,441
Total	$	2,396	$	1,903	$	6,441	$	4,531

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding at June 30, 2019		1,365,000		$	2.48
Granted		-		$	-
Exercised		(150,000	)	$	1.90
Forfeited		-		$	-
Outstanding at March 29, 2020		1,215,000		$	2.55		1.5	$	12,550
Exercisable at March 29, 2020		1,215,000		$	2.55		1.5	$	12,550

Schedule of Nonvested Share Activity [Table Text Block]

	Shares			Weighted Average Grant Date Fair Value
Non-vested at June 30, 2019		1,438,592		$	10.81
Granted		736,555		$	13.09
Vested		(468,683	)	$	10.37
Forfeited		(59,816	)	$	12.54
Non-vested at March 29, 2020		1,646,648		$	11.89

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Note 6 - Goodwill and Intangible Assets

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note

6

– Goodwill and Intangible Assets

The following table presents goodwill by segment and the related change in the net carrying amount:

	1-800-Flowers.com Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Total
	(in thousands)
Balance at June 30, 2019	$	17,441	$	-	$	45,149	$	62,590
Acquisition of Shari’s Berries		-		-		12,121		12,121
Balance at March 29, 2020	$	17,441	$	-	$	57,270	$	74,711

The Company’s other intangible assets consist of the following:

			March 29, 2020						June 30, 2019
	Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in years)		(in thousands)
Intangible assets with determinable lives
Investment in licenses		14-16	$	7,420	$	6,227	$	1,193	$	7,420	$	6,148	$	1,272
Customer lists		2-10		12,825		10,299		2,526		12,184		9,798		2,386
Other		5-14		2,946		2,356		590		2,946		2,280		666
Total intangible assets with determinable lives				23,191		18,882		4,309		22,550		18,226		4,324
Trademarks with indefinite lives				62,191		-		62,191		55,291		-		55,291
Total identifiable intangible assets			$	85,382	$	18,882	$	66,500	$	77,841	$	18,226	$	59,615

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group

may

not

be recoverable. Future estimated amortization expense is as follows: remainder of fiscal

2020

-

$0.3

million, fiscal

2021

-

$0.9

million, fiscal

2022

-

$0.6

million, fiscal

2023

-

$0.5

million, fiscal

2024

-

$0.5

million and thereafter -

$1.5

million.

XML

Note 10 - Fair Value Measurements

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

10

- Fair Value Measurements

Cash and cash equivalents, trade and other receivables, prepaids, accounts payable and accrued expenses are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Although

no

trading market exists, the Company believes that the carrying amount of its debt approximates fair value due to its variable nature. The Company’s investments in non-marketable equity instruments of private companies are carried at cost and are periodically assessed for other-than-temporary impairment, when an event or circumstances indicate that an other-than-temporary decline in value

may

have occurred. The Company’s remaining financial assets and liabilities are measured and recorded at fair value (see table below). The Company’s non-financial assets, such as definite lived intangible assets and property, plant and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value

may

have occurred. Goodwill and indefinite lived intangibles are tested for impairment annually, or more frequently, if events occur or circumstances change such that it is more likely than

not

that an impairment

may

exist, as required under the accounting standards.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level

1

measurements) and the lowest priority to unobservable inputs (level

3

measurements). The

three

levels of the fair value hierarchy under the guidance are described below:

Level  1	Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2	Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3	Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents by level, within the fair value hierarchy, financial assets and liabilities measured at fair value on a recurring basis:

	Carrying Value		Fair Value Measurements Assets (Liabilities)
			Level 1		Level 2		Level 3
	(in thousands)
As of March 29, 2020:
Trading securities held in a “rabbi trust” (1)	$	11,360	$	11,360	$	-	$	-
Total assets (liabilities) at fair value	$	11,360	$	11,360	$	-	$	-
As of June 30, 2019:
Trading securities held in a “rabbi trust” (1)	$	11,816	$	11,816	$	-	$	-
Total assets (liabilities) at fair value	$	11,816	$	11,816	$	-	$	-

( 1 ) The Company has established an NQDC Plan for certain members of senior management. Deferred compensation plan assets are invested in mutual funds held in a “rabbi trust,” which is restricted for payment to participants of the NQDC Plan. Trading securities held in a rabbi trust are measured using quoted market prices at the reporting date and are included in the “Other assets” line item, with the corresponding liability included in the “Other liabilities” line item in the consolidated balance sheets. 

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Note 1 - Accounting Policies (Details Textual) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 29, 2020	Mar. 29, 2020	Jul. 01, 2019	Jun. 30, 2019
Contract with Customer, Liability, Current	$ 28,600	$ 28,600		$ 17,300
Contract with Customer, Liability, Revenue Recognized	500	16,400
Operating Lease, Liability, Total	73,775	73,775
Operating Lease, Right-of-Use Asset	$ 70,284	$ 70,284
Accounting Standards Update 2016-02 [Member]
Operating Lease, Liability, Total			$ 80,700
Operating Lease, Right-of-Use Asset			$ 78,700

XML

Note 9 - Property, Plant and Equipment (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Property, Plant and Equipment [Table Text Block]

	March 29, 2020			June 30, 2019
	(in thousands)
Land	$	30,789		$	30,789
Orchards in production and land improvements		11,701			11,339
Building and building improvements		60,512			59,236
Leasehold improvements		14,182			13,861
Production equipment and furniture and fixtures		64,461			61,415
Computer and telecommunication equipment		54,664			53,694
Software		144,746			132,078
Capital projects in progress - orchards		12,489			9,902
Property, plant and equipment, gross		393,544			372,314
Accumulated depreciation and amortization		(227,145	)		(205,633	)
Property, plant and equipment, net	$	166,399		$	166,681

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Note 3 - Stock-based Compensation - Allocation of Stock-based Compensation to Operating Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 29, 2020	Mar. 31, 2019	Mar. 29, 2020	Mar. 31, 2019
Allocated share-based compensation expense	$ 2,396	$ 1,903	$ 6,441	$ 4,531
Selling and Marketing Expense [Member]
Allocated share-based compensation expense	1,097	830	2,960	1,816
Technology and Development [Member]
Allocated share-based compensation expense	181	118	473	274
General and Administrative Expense [Member]
Allocated share-based compensation expense	$ 1,118	$ 955	$ 3,008	$ 2,441

XML

Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 29, 2020	Mar. 31, 2019	Mar. 29, 2020	Mar. 31, 2019
Net revenues	$ 278,776	$ 248,413	$ 1,071,681	$ 989,225
Cost of revenues	171,324	150,893	618,911	568,338
Gross profit	107,452	97,520	452,770	420,887
Operating expenses:
Marketing and sales	78,606	71,163	262,849	243,781
Technology and development	11,900	11,511	34,436	32,696
General and administrative	20,031	22,447	64,187	64,480
Depreciation and amortization	7,803	7,028	23,268	22,840
Total operating expenses	118,340	112,149	384,740	363,797
Operating income (loss)	(10,888)	(14,629)	68,030	57,090
Interest (income) expense, net	147	(30)	1,727	2,390
Other (income) expense, net	2,605	(1,285)	1,714	(293)
Income (loss) before income taxes	(13,640)	(13,314)	64,589	54,993
Income tax expense (benefit)	(3,983)	(5,073)	15,365	11,922
Net income (loss)	$ (9,657)	$ (8,241)	$ 49,224	$ 43,071
Basic net income (loss) per common share (in dollars per share)	$ (0.15)	$ (0.13)	$ 0.76	$ 0.67
Diluted net income (loss) per common share (in dollars per share)	$ (0.15)	$ (0.13)	$ 0.74	$ 0.65
Weighted average shares used in the calculation of net income (loss) per common share:
Basic (in shares)	64,348	64,194	64,517	64,383
Diluted (in shares)	64,348	64,194	66,378	66,456

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Note 15 - Subsequent Event-Closure of Harry & David Retail Stores (Details Textual) $ in Millions	3 Months Ended
	Jun. 28, 2020 USD ($)	Apr. 14, 2020
Harry & David Branded Stores Closing [Member] | Forecast [Member] | Minimum [Member]
Restructuring Charges, Total	$ 4
Harry & David Branded Stores Closing [Member] | Forecast [Member] | Maximum [Member]
Restructuring Charges, Total	$ 5
Subsequent Event [Member]
Number of Stores		39
Subsequent Event [Member] | Harry & David Branded Stores Closing [Member]
Number of Closed Stores		38

XML

Note 1 - Accounting Policies

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

Note

1

– Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by

1

-

800

-FLOWERS.COM, Inc. and Subsidiaries (the “Company”) in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form

10

-Q and Article

10

of Regulation S-

X.

Accordingly, they do

not

include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the

three

and

nine

month periods ended

March 29, 2020

are

not

necessarily indicative of the results that

may

be expected for the fiscal year ending

June 28, 2020.

These financial statements should be read in conjunction with our

Annual Report on Form

10

-K for the fiscal year ended

June 30, 2019

, which provides a more complete understanding of our accounting policies, financial position, operating results and other matters.

The Company’s quarterly results

may

experience seasonal fluctuations. Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s

second

fiscal quarter, generates nearly

50%

of the Company’s annual revenues, and all of its earnings. As a result of the number of major floral gifting occasions, including Mother's Day, Valentine’s Day, Easter and Administrative Professionals Week, revenues also rise during the Company’s fiscal

third

and

fourth

quarters compared to its fiscal

first

quarter.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

COVID-

19

On

March 27, 2020,

the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law. The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-

19

pandemic, including tax relief and government loans, grants and investments. The CARES Act did

not

have a material impact on the Company’s consolidated financial statements during the

three

months and

nine

months ended 

March 

29,

2020.

The Company is closely monitoring the impact of the pandemic of the novel strain of coronavirus ("COVID-

19"

) on its business, including how it will affect its customers, workforce, suppliers, vendors, franchisees, florists, and production and distribution channels, as well as its financial statements. The extent to which COVID-

19

impacts the Company’s business and financial results will depend on numerous evolving factors including, but

not

limited to: the magnitude and duration of COVID-

19,

the extent to which it will impact macroeconomic conditions including interest rates, employment rates and consumer confidence, the speed of the anticipated recovery, and governmental, business and individual consumer reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-

19

as of

March 29, 2020

and through the date of this report. The accounting matters assessed included, but were

not

limited to, the Company’s allowance for doubtful accounts and credit losses, inventory and related reserves and the carrying value of goodwill and other long-lived assets. While there was

not

a material impact to the Company’s consolidated financial statements as of and for the quarter ended

March 29, 2020,

the Company’s future assessment of these factors and the evolving factors described above, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Revenue Recognition

Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Service and outbound shipping charged to customers are recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers.

A description of our principal revenue generating activities is as follows:

● E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due prior to the date of shipment.

● Retail revenues - consumer products sold through our retail stores. Revenue is recognized when control of the goods is transferred to the customer, at the point of sale, at which time payment is received.

● Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer.

● BloomNet Services - membership fees as well as other service offerings to florists. Membership and other subscription-based fees are recognized monthly as earned. Services revenues related to orders sent through the floral network are variable, based on either the number of orders or the value of orders, and are recognized in the period in which the orders are delivered. The contracts within BloomNet Services are typically month-to-month and as a result no consideration allocation is necessary across multiple reporting periods. Payment is typically due less than 30 days from the date the services were performed. 

Deferred Revenues

Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. As such, customer orders are recorded as deferred revenue prior to shipment or rendering of product or services. Deferred revenues primarily relate to e-commerce orders placed, but

not

shipped, prior to the end of the fiscal period, as well as for monthly subscription programs, including our Fruit of the Month Club and Celebrations Passport program.

Our total deferred revenue as of

June 30, 2019

was

$17.3

million (included in “Accrued expenses” on our consolidated balance sheets), of which,

$0.5

 million and

$16.4

 million was recognized as revenue during the

three

and

nine

months ended

March 29, 2020.

The deferred revenue balance as of

March 29, 2020

was

$28.6

million.

Recently Issued Accounting Pronouncements - Adopted

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

“Leases (Topic

842

)” (“ASC

842”

). Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. We adopted the new standard effective

July 1, 2019

and elected the optional transition method and therefore, we will

not

apply the standard to the comparative periods presented in our financial statements. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, that did

not

require us to reassess, under the new standard, our prior conclusions about lease identification, lease classification and initial direct costs. Further, we elected a short-term lease exception policy, permitting us to

not

apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of

12

months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The adoption of the new standard had a material impact to the Company’s Consolidated Balance Sheets, but

no

impact to the Consolidated Statements of Income (Operations) or Consolidated Statements of Cash Flows. As such, we recorded operating lease liabilities of

$80.7

million, based on the present value of the remaining minimum rental payments using discount rates as of the effective date, and a corresponding right-of-use assets of

$78.7

million based on the operating lease liabilities adjusted for deferred rent and lease incentives received. See

Note

13

 - Leases

for further information about our transition to ASC

842

and the newly required disclosures.

Recently Issued Accounting Pronouncements –

Not

Yet Adopted

Financial Instruments – Measurement of Credit Losses.

In

June 2016,

the FASB issued ASU

No.

2016

-

13,

“Financial Instruments-Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments.” ASU

2016

-

13

introduces a new forward-looking “expected loss” approach, to estimate credit losses on most financial assets and certain other instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. ASU

2016

-

13

is effective for the Company’s fiscal

2021,

and the guidance is to be applied using the modified-retrospective approach. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

Goodwill – Impairment Test

. In

January 2017,

the FASB issued ASU

No.

2017

-

04,

"Intangibles - Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment," which eliminates step

two

from the goodwill impairment test. Under ASU

2017

-

04,

an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance is effective for the Company’s fiscal

2021,

with early adoption permitted, and should be applied prospectively. We do

not

expect the standard to have a material impact on our consolidated financial statements.

XML

Note 10 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands		Mar. 29, 2020	Jun. 30, 2019
Trading securities held in a “rabbi trust”	[1]	$ 11,360	$ 11,816
Total assets (liabilities) at fair value		11,360	11,816
Fair Value, Inputs, Level 1 [Member]
Trading securities held in a “rabbi trust”	[1]	11,360	11,816
Total assets (liabilities) at fair value		11,360	11,816
Fair Value, Inputs, Level 2 [Member]
Trading securities held in a “rabbi trust”	[1]
Total assets (liabilities) at fair value
Fair Value, Inputs, Level 3 [Member]
Trading securities held in a “rabbi trust”	[1]
Total assets (liabilities) at fair value

[1] The Company has established an NQDC Plan for certain members of senior management. Deferred compensation plan assets are invested in mutual funds held in a rabbi trust, which is restricted for payment to participants of the NQDC Plan. Trading securities held in a rabbi trust are measured using quoted market prices at the reporting date and are included in the Other assets line item, with the corresponding liability included in the "Other liabilities" line item in the consolidated balance sheets.

XML

Note 12 - Business Segments - Disaggregation of Revenue From Contracts With Customers (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 29, 2020	Mar. 31, 2019	Mar. 29, 2020	Mar. 31, 2019
Net revenues	$ 278,776	$ 248,413	$ 1,071,681	$ 989,225
Corporate, Non-Segment [Member]
Net revenues	112	263	472	845
Intersegment Eliminations [Member]
Net revenues	(276)	(301)	(1,176)	(1,202)
E-commerce [Member] | Operating Segments [Member]
Net revenues	231,851	204,362	847,985	780,883
Retail Sales Channel [Member] | Operating Segments [Member]
Net revenues	6,196	6,916	38,827	41,590
Wholesale [Member] | Operating Segments [Member]
Net revenues	20,317	17,229	128,335	112,155
Bloomnet Services [Member] | Operating Segments [Member]
Net revenues	19,613	18,864	54,757	52,366
Other [Member]
Net revenues	963	1,080	2,481	2,588
Consumer Floral [Member]
Net revenues	152,620	144,821	359,104	338,003
Consumer Floral [Member] | Operating Segments [Member]
Net revenues	152,620	144,821	359,104	338,003
Consumer Floral [Member] | Corporate, Non-Segment [Member]
Net revenues
Consumer Floral [Member] | Intersegment Eliminations [Member]
Net revenues
Consumer Floral [Member] | E-commerce [Member] | Operating Segments [Member]
Net revenues	150,491	142,552	353,436	332,302
Consumer Floral [Member] | Retail Sales Channel [Member] | Operating Segments [Member]
Net revenues	1,166	1,189	3,187	3,113
Consumer Floral [Member] | Wholesale [Member] | Operating Segments [Member]
Net revenues
Consumer Floral [Member] | Bloomnet Services [Member] | Operating Segments [Member]
Net revenues
Consumer Floral [Member] | Other [Member]
Net revenues	963	1,080	2,481	2,588
BloomNet Wire Service [Member]
Net revenues	30,414	28,185	81,576	75,613
BloomNet Wire Service [Member] | Operating Segments [Member]
Net revenues	30,414	28,185	81,576	75,613
BloomNet Wire Service [Member] | Corporate, Non-Segment [Member]
Net revenues
BloomNet Wire Service [Member] | Intersegment Eliminations [Member]
Net revenues
BloomNet Wire Service [Member] | E-commerce [Member] | Operating Segments [Member]
Net revenues
BloomNet Wire Service [Member] | Retail Sales Channel [Member] | Operating Segments [Member]
Net revenues
BloomNet Wire Service [Member] | Wholesale [Member] | Operating Segments [Member]
Net revenues	10,801	9,321	26,819	23,247
BloomNet Wire Service [Member] | Bloomnet Services [Member] | Operating Segments [Member]
Net revenues	19,613	18,864	54,757	52,366
BloomNet Wire Service [Member] | Other [Member]
Net revenues
Gourmet Food and Gift Baskets [Member]
Net revenues	95,906	75,445	631,705	575,966
Gourmet Food and Gift Baskets [Member] | Operating Segments [Member]
Net revenues	95,906	75,445	631,705	575,966
Gourmet Food and Gift Baskets [Member] | Corporate, Non-Segment [Member]
Net revenues
Gourmet Food and Gift Baskets [Member] | Intersegment Eliminations [Member]
Net revenues
Gourmet Food and Gift Baskets [Member] | E-commerce [Member] | Operating Segments [Member]
Net revenues	81,360	61,810	494,549	448,581
Gourmet Food and Gift Baskets [Member] | Retail Sales Channel [Member] | Operating Segments [Member]
Net revenues	5,030	5,727	35,640	38,477
Gourmet Food and Gift Baskets [Member] | Wholesale [Member] | Operating Segments [Member]
Net revenues	9,516	7,908	101,516	88,908
Gourmet Food and Gift Baskets [Member] | Bloomnet Services [Member] | Operating Segments [Member]
Net revenues
Gourmet Food and Gift Baskets [Member] | Other [Member]
Net revenues

XML

Note 6 - Goodwill and Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 29, 2020	Jun. 30, 2019
Intangible assets with determinable lives, gross	$ 23,191	$ 22,550
Accumulated amortization	18,882	18,226
Intangible assets with determinable lives, net	4,309	4,324
Trademarks with indefinite lives, gross	62,191	55,291
Total identifiable intangible assets, gross	85,382	77,841
Total identifiable intangible assets, net	66,500	59,615
Licensing Agreements [Member]
Intangible assets with determinable lives, gross	7,420	7,420
Accumulated amortization	6,227	6,148
Intangible assets with determinable lives, net	$ 1,193	1,272
Licensing Agreements [Member] | Minimum [Member]
Finite-lived intangible asset, useful life (Year)	14 years
Licensing Agreements [Member] | Maximum [Member]
Finite-lived intangible asset, useful life (Year)	16 years
Customer Lists [Member]
Intangible assets with determinable lives, gross	$ 12,825	12,184
Accumulated amortization	10,299	9,798
Intangible assets with determinable lives, net	$ 2,526	2,386
Customer Lists [Member] | Minimum [Member]
Finite-lived intangible asset, useful life (Year)	2 years
Customer Lists [Member] | Maximum [Member]
Finite-lived intangible asset, useful life (Year)	10 years
Other Intangible Assets [Member]
Intangible assets with determinable lives, gross	$ 2,946	2,946
Accumulated amortization	2,356	2,280
Intangible assets with determinable lives, net	$ 590	$ 666
Other Intangible Assets [Member] | Minimum [Member]
Finite-lived intangible asset, useful life (Year)	5 years
Other Intangible Assets [Member] | Maximum [Member]
Finite-lived intangible asset, useful life (Year)	14 years

XML

Note 4 - Acquisition - Preliminary Allocation of the Purchase Price to the Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 29, 2020	Aug. 14, 2019	Jun. 30, 2019
Current assets		$ 1,029
Intangible assets		7,540
Goodwill	$ 74,711	12,121	$ 62,590
Total assets acquired		20,690
Current liabilities		190
Net assets acquired		$ 20,500

XML

Significant Accounting Policies (Policies)

9 Months Ended

Mar. 29, 2020

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by

1

-

800

-FLOWERS.COM, Inc. and Subsidiaries (the “Company”) in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form

10

-Q and Article

10

of Regulation S-

X.

Accordingly, they do

not

include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the

three

and

nine

month periods ended

March 29, 2020

are

not

necessarily indicative of the results that

may

be expected for the fiscal year ending

June 28, 2020.

These financial statements should be read in conjunction with our

Annual Report on Form

10

-K for the fiscal year ended

June 30, 2019

, which provides a more complete understanding of our accounting policies, financial position, operating results and other matters.

The Company’s quarterly results

may

experience seasonal fluctuations. Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s

second

fiscal quarter, generates nearly

50%

of the Company’s annual revenues, and all of its earnings. As a result of the number of major floral gifting occasions, including Mother's Day, Valentine’s Day, Easter and Administrative Professionals Week, revenues also rise during the Company’s fiscal

third

and

fourth

quarters compared to its fiscal

first

quarter.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Effect of Covid-19 Pandemic, Policy [Policy Text Block]

COVID-

19

On

March 27, 2020,

the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law. The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-

19

pandemic, including tax relief and government loans, grants and investments. The CARES Act did

not

have a material impact on the Company’s consolidated financial statements during the

three

months and

nine

months ended 

March 

29,

2020.

The Company is closely monitoring the impact of the pandemic of the novel strain of coronavirus ("COVID-

19"

) on its business, including how it will affect its customers, workforce, suppliers, vendors, franchisees, florists, and production and distribution channels, as well as its financial statements. The extent to which COVID-

19

impacts the Company’s business and financial results will depend on numerous evolving factors including, but

not

limited to: the magnitude and duration of COVID-

19,

the extent to which it will impact macroeconomic conditions including interest rates, employment rates and consumer confidence, the speed of the anticipated recovery, and governmental, business and individual consumer reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-

19

as of

March 29, 2020

and through the date of this report. The accounting matters assessed included, but were

not

limited to, the Company’s allowance for doubtful accounts and credit losses, inventory and related reserves and the carrying value of goodwill and other long-lived assets. While there was

not

a material impact to the Company’s consolidated financial statements as of and for the quarter ended

March 29, 2020,

the Company’s future assessment of these factors and the evolving factors described above, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and

management’s evaluation). Service and outbound shipping charged to customers are recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and

outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers.

A description of our principal revenue generating activities is as follows:

● E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due prior to the date of shipment.

● Retail revenues - consumer products sold through our retail stores. Revenue is recognized when control of the goods is transferred to the customer, at the point of sale, at which time payment is received.

● Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer.

● BloomNet Services - membership fees as well as other service offerings to florists. Membership and other subscription-based fees are recognized monthly as earned. Services revenues related to orders sent through the floral network are variable, based on either the number of orders or the value of orders, and are recognized in the period in which the orders are delivered. The contracts within BloomNet Services are typically month-to-month and as a result no consideration allocation is necessary across multiple reporting periods. Payment is typically due less than 30 days from the date the services were performed. 

Deferred Revenues

Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. As such, customer orders are recorded as deferred revenue prior to shipment or rendering of product or services. Deferred revenues primarily relate to e-commerce orders placed, but

not

shipped, prior to the end of the fiscal period, as well as for monthly subscription programs, including our Fruit of the Month Club and Celebrations Passport program.

Our total deferred revenue as of

June 30, 2019

was

$17.3

million (included in “Accrued expenses” on our consolidated balance sheets), of which,

$0.5

 million and

$16.4

 million was recognized as revenue during the

three

and

nine

months ended

March 29, 2020.

The deferred revenue balance as of

March 29, 2020

was

$28.6

million.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements - Adopted

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

“Leases (Topic

842

)” (“ASC

842”

). Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. We adopted the new standard effective

July 1, 2019

and elected the optional transition method and therefore, we will

not

apply the standard to the comparative periods presented in our financial statements. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, that did

not

require us to reassess, under the new standard, our prior conclusions about lease identification, lease classification and initial direct costs. Further, we elected a short-term lease exception policy, permitting us to

not

apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of

12

months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. The adoption of the new standard had a material impact to the Company’s Consolidated Balance Sheets, but

no

impact to the Consolidated Statements of Income (Operations) or Consolidated Statements of Cash Flows. As such, we recorded operating lease liabilities of

$80.7

million, based on the present value of the remaining minimum rental payments using discount rates as of the effective date, and a corresponding right-of-use assets of

$78.7

million based on the operating lease liabilities adjusted for deferred rent and lease incentives received. See

Note

13

 - Leases

for further information about our transition to ASC

842

and the newly required disclosures.

Recently Issued Accounting Pronouncements –

Not

Yet Adopted

Financial Instruments – Measurement of Credit Losses.

In

June 2016,

the FASB issued ASU

No.

2016

-

13,

“Financial Instruments-Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments.” ASU

2016

-

13

introduces a new forward-looking “expected loss” approach, to estimate credit losses on most financial assets and certain other instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. ASU

2016

-

13

is effective for the Company’s fiscal

2021,

and the guidance is to be applied using the modified-retrospective approach. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

Goodwill – Impairment Test

. In

January 2017,

the FASB issued ASU

No.

2017

-

04,

"Intangibles - Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment," which eliminates step

two

from the goodwill impairment test. Under ASU

2017

-

04,

an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance is effective for the Company’s fiscal

2021,

with early adoption permitted, and should be applied prospectively. We do

not

expect the standard to have a material impact on our consolidated financial statements.

XML

Note 5 - Inventory (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	March 29, 2020		June 30, 2019
	(in thousands)
Finished goods	$	32,361	$	36,820
Work-in-process		10,332		17,535
Raw materials		31,344		38,006
Total inventory	$	74,037	$	92,361

XML

Note 3 - Stock-based Compensation (Details Textual) $ in Thousands	9 Months Ended
	Mar. 29, 2020 USD ($)
Share-based Payment Arrangement, Option [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 0
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	0 years
Restricted Stock [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 12,200
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	1 year 328 days

XML

Note 12 - Business Segments (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended						Nine Months Ended
	March 29, 2020			March 3 1 , 201 9			March 29, 2020			March 3 1 , 201 9
Net Revenues:	(in thousands)
Segment Net Revenues:
1-800-Flowers.com Consumer Floral	$	152,620		$	144,821		$	359,104		$	338,003
BloomNet Wire Service		30,414			28,185			81,576			75,613
Gourmet Foods & Gift Baskets		95,906			75,445			631,705			575,966
Corporate		112			263			472			845
Intercompany eliminations		(276	)		(301	)		(1,176	)		(1,202	)
Total net revenues	$	278,776		$	248,413		$	1,071,681		$	989,225
Operating Income (Loss) :
Segment Contribution Margin:
1-800-Flowers.com Consumer Floral	$	15,439		$	15,364		$	34,853		$	32,667
BloomNet Wire Service		10,025			9,480			27,516			25,375
Gourmet Foods & Gift Baskets		(6,275	)		(7,202	)		100,512			89,191
Segment Contribution Margin Subtotal		19,189			17,642			162,881			147,233
Corporate (a)		(22,274	)		(25,243	)		(71,583	)		(67,303	)
Depreciation and amortization		(7,803	)		(7,028	)		(23,268	)		(22,840	)
Operating income (loss)	$	(10,888	)	$	(14,629	)	$	68,030		$	57,090

Disaggregation of Revenue [Table Text Block]

	Three Months Ended									Three Months Ended
	March 29, 2020									March 3 1 , 201 9
	Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated			Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated
	(in thousands)
Net revenues
E-commerce	$	150,491	$	-	$	81,360	$	231,851		$	142,552	$	-	$	61,810	$	204,362
Retail		1,166		-		5,030		6,196			1,189		-		5,727		6,916
Wholesale		-		10,801		9,516		20,317			-		9,321		7,908		17,229
BloomNet services		-		19,613		-		19,613			-		18,864		-		18,864
Other		963		-		-		963			1,080		-		-		1,080
Corporate		-		-		-		112			-		-		-		263
Eliminations		-		-		-		(276	)		-		-		-		(301	)
Net revenues	$	152,620	$	30,414	$	95,906	$	278,776		$	144,821	$	28,185	$	75,445	$	248,413

	Nine months ended									Nine months ended
	March 29, 2020									March 3 1 , 201 9
	Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated			Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated
	(in thousands)
Net revenues
E-commerce	$	353,436	$	-	$	494,549	$	847,985		$	332,302	$	-	$	448,581	$	780,883
Retail		3,187		-		35,640		38,827			3,113		-		38,477		41,590
Wholesale		-		26,819		101,516		128,335			-		23,247		88,908		112,155
BloomNet services		-		54,757		-		54,757			-		52,366		-		52,366
Other		2,481		-		-		2,481			2,588		-		-		2,588
Corporate		-		-		-		472			-		-		-		845
Eliminations		-		-		-		(1,176	)		-		-		-		(1,202	)
Net revenues	$	359,104	$	81,576	$	631,705	$	1,071,681		$	338,003	$	75,613	$	575,966	$	989,225

XML

Note 4 - Acquisition

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

Note

4

– Acquisition

Acquisition of Shari’s Berries

On

August 14, 2019,

the Company completed its acquisition of the Shari’s Berries business ("Shari's Berries"), a leading provider of dipped berries and other specialty treats, through a bankruptcy proceeding of certain assets of the gourmet food business of the FTD Companies, Inc. The transaction, for a purchase price of

$20.5

million, included the Shari’s Berries domain names, copyrights, trademarks, customer data, phone numbers and other intellectual property, as well as certain raw material inventory and the assumption of specified liabilities.

The total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on our preliminary estimates of their fair values on the acquisition date. The Company is in the process of finalizing its allocation and this

may

result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain additional intangible assets, revisions of useful lives of intangible assets, and the determination of any residual amount that will be allocated to goodwill. Of the acquired intangible assets,

$0.6

million was assigned to customer lists, which is being amortized over the estimated remaining life of

2

years,

$6.9

million was assigned to tradenames, and

$12.1

million was assigned to goodwill, which is expected to be deductible for tax purposes. The goodwill recognized in conjunction with our acquisition of Shari’s Berries is primarily related to synergistic value created in terms of both operating costs and revenue growth opportunities, enhanced financial and operational scale, and other strategic benefits.

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of assets acquired and liabilities assumed at the date of the acquisition:

	Shari’s Berries Preliminary Purchase Price Allocation
	(in thousands)
Current assets	$	1,029
Intangible assets		7,540
Goodwill		12,121
Total assets acquired		20,690
Current liabilities		190
Net assets acquired	$	20,500

Raw materials inventory was valued at book value, as there have

not

been any significant price fluctuations or other events that would materially change the cost to replace the raw materials.

The estimated fair value of the acquired tradenames was determined using the relief from royalty method, which is a risk-adjusted discounted cash flow approach. The relief from royalty method values an intangible asset by estimating the royalties saved through ownership of the asset. The relief from royalty method requires identifying the future revenue that would be generated by the trademark, multiplying it by a royalty rate deemed to be avoided through ownership of the asset and discounting the projected royalty savings amounts back to the acquisition date. The royalty rate used in the valuation was based on a consideration of market rates for similar categories of assets. The discount rate used in the valuation was based on the Company’s weighted average cost of capital, the riskiness of the earnings stream associated with the trademarks and the overall composition of the acquired assets.

The estimated fair value of the acquired customer lists was determined using the excess earnings method under the income approach. This method requires identifying the future revenue that would be generated by existing customers at the time of the acquisition, considering an appropriate attrition rate based on the historical experience of the Company. Appropriate expenses are then deducted from the revenues and economic rents are charged for the return on contributory assets. The after-tax cash flows attributable to the asset are discounted back to their net present value at an appropriate intangible asset rate of return and summed to calculate the value of the customer lists.

Operating results of the Shari’s Berries brand are reflected in the Company’s consolidated financial statements from the date of acquisition, within the Gourmet Foods & Gift Baskets segment. Pro forma results of operations have

not

been presented, as the impact on the Company’s consolidated financial results would

not

have been material.

XML

Note 8 - Debt

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

8

–Debt

The Company’s current and long-term debt consists of the following:

	March 29, 2020			June 30, 2019
	(in thousands)
Revolver (1)	$	-		$	-
Term Loan (1)		96,250			100,000
Deferred financing costs		(2,602	)		(3,027	)
Total debt		93,648			96,973
Less: current debt		5,000			5,000
Long-term debt	$	88,648		$	91,973

( 1 ) On May 31, 2019, the Company entered into a Second Amended and Restated Credit Agreement (the “2019 Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent, and a group of lenders. The 2019 Credit Agreement amended and restated the Company’s existing amended and restated credit agreement dated as of December 23, 2016 ( the “2016 Credit Agreement”) to, among other modifications: (i) increase the amount of the outstanding term loan (“Term Loan”) from approximately $97 million to $100 million, (ii) extend the maturity date of the outstanding Term Loan and the revolving credit facility (“Revolver”) by approximately 29 months to May 31, 2024, and (iii) decrease the applicable interest rate margins for LIBOR and base rate loans by 25 basis points. The Term Loan is payable in 19 quarterly installments of principal and interest beginning on September 29, 2019, with escalating principal payments, at the rate of 5.0% per annum for the first eight payments, and 10.0% per annum for the remaining 11 payments, with the remaining balance of $62.5 million due upon maturity. The Revolver, in the aggregate amount of $200 million, subject to seasonal reduction to an aggregate amount of $100 million for the period from January 1 through August 1, may be used for working capital and general corporate purposes, subject to certain restrictions.

For each borrowing under the

2019

Credit Agreement, the Company

may

elect that such borrowing bear interest at an annual rate equal to either: (

1

) a base rate plus an applicable margin varying based on the Company’s consolidated leverage ratio, where the base rate is the highest of (a) the prime rate, (b) the New York fed bank rate plus

0.5%

and (c) a LIBOR rate plus

1%

or (

2

) an adjusted LIBOR rate plus an applicable margin varying based on the Company’s consolidated leverage ratio. The

2019

Credit Agreement requires that while any borrowings or commitments are outstanding the Company comply with certain financial covenants and affirmative covenants as well as certain negative covenants that, subject to certain exceptions, limit the Company’s ability to, among other things, incur additional indebtedness, make certain investments and make certain restricted payments. The Company was in compliance with these covenants as of

March 29, 2020.

The

2019

Credit Agreement is secured by substantially all of the assets of the Company.

Future principal payments under the Term Loan are as follows:

$1.25

million – remainder of fiscal

2020,

$5.0

million – fiscal

2021,

$10.0

million - fiscal

2022,

$10.0

million – fiscal

2023

and

$70.0

million – fiscal

2024.

 

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Note 12 - Business Segments

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

12

– Business Segments

The Company’s management reviews the results of its operations by the following

three

business segments:

•     

1

-

800

-Flowers.com Consumer Floral,

•     BloomNet Wire Service, and

•     Gourmet Foods & Gift Baskets

Segment performance is measured based on contribution margin, which includes only the direct controllable revenue and operating expenses of the segments. As such, management’s measure of profitability for these segments does

not

include the effect of corporate overhead (see (a) below), nor does it include depreciation and amortization, other (income) expense, net and income taxes, or stock-based compensation. Assets and liabilities are reviewed at the consolidated level by management and

not

accounted for by segment.

	Three Months Ended						Nine Months Ended
	March 29, 2020			March 3 1 , 201 9			March 29, 2020			March 3 1 , 201 9
Net Revenues:	(in thousands)
Segment Net Revenues:
1-800-Flowers.com Consumer Floral	$	152,620		$	144,821		$	359,104		$	338,003
BloomNet Wire Service		30,414			28,185			81,576			75,613
Gourmet Foods & Gift Baskets		95,906			75,445			631,705			575,966
Corporate		112			263			472			845
Intercompany eliminations		(276	)		(301	)		(1,176	)		(1,202	)
Total net revenues	$	278,776		$	248,413		$	1,071,681		$	989,225
Operating Income (Loss) :
Segment Contribution Margin:
1-800-Flowers.com Consumer Floral	$	15,439		$	15,364		$	34,853		$	32,667
BloomNet Wire Service		10,025			9,480			27,516			25,375
Gourmet Foods & Gift Baskets		(6,275	)		(7,202	)		100,512			89,191
Segment Contribution Margin Subtotal		19,189			17,642			162,881			147,233
Corporate (a)		(22,274	)		(25,243	)		(71,583	)		(67,303	)
Depreciation and amortization		(7,803	)		(7,028	)		(23,268	)		(22,840	)
Operating income (loss)	$	(10,888	)	$	(14,629	)	$	68,030		$	57,090

(a) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, as well as Stock-Based Compensation. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are

not

directly allocable to a specific segment.

The following tables represent a disaggregation of revenue from contracts with customers, by channel: 

	Three Months Ended									Three Months Ended
	March 29, 2020									March 3 1 , 201 9
	Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated			Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated
	(in thousands)
Net revenues
E-commerce	$	150,491	$	-	$	81,360	$	231,851		$	142,552	$	-	$	61,810	$	204,362
Retail		1,166		-		5,030		6,196			1,189		-		5,727		6,916
Wholesale		-		10,801		9,516		20,317			-		9,321		7,908		17,229
BloomNet services		-		19,613		-		19,613			-		18,864		-		18,864
Other		963		-		-		963			1,080		-		-		1,080
Corporate		-		-		-		112			-		-		-		263
Eliminations		-		-		-		(276	)		-		-		-		(301	)
Net revenues	$	152,620	$	30,414	$	95,906	$	278,776		$	144,821	$	28,185	$	75,445	$	248,413

	Nine months ended									Nine months ended
	March 29, 2020									March 3 1 , 201 9
	Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated			Consumer Floral		BloomNet Wire Service		Gourmet Foods & Gift Baskets		Consolidated
	(in thousands)
Net revenues
E-commerce	$	353,436	$	-	$	494,549	$	847,985		$	332,302	$	-	$	448,581	$	780,883
Retail		3,187		-		35,640		38,827			3,113		-		38,477		41,590
Wholesale		-		26,819		101,516		128,335			-		23,247		88,908		112,155
BloomNet services		-		54,757		-		54,757			-		52,366		-		52,366
Other		2,481		-		-		2,481			2,588		-		-		2,588
Corporate		-		-		-		472			-		-		-		845
Eliminations		-		-		-		(1,176	)		-		-		-		(1,202	)
Net revenues	$	359,104	$	81,576	$	631,705	$	1,071,681		$	338,003	$	75,613	$	575,966	$	989,225

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member] Common Class A [Member]	Common Stock [Member] Common Class B [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Treasury Stock [Member]	Total
Balance (in shares) at Jul. 01, 2018	52,071,293	33,822,823				21,258,790
Balance at Jul. 01, 2018	$ 520	$ 338	$ 341,783	$ 73,429	$ (200)	$ (100,966)	$ 314,904
Net income (loss)				43,071			43,071
Translation adjustment					(58)		(58)
Stock-based compensation (in shares)	411,600
Stock-based compensation	$ 4		4,527				4,531
Acquisition of Class A treasury stock (in shares)						1,230,303
Acquisition of Class A treasury stock						$ (14,765)	(14,765)
Net income (loss)				43,071			43,071
Exercise of stock options (in shares)	448,234
Exercise of stock options	$ 4		925				929
Other				330			330
Balance (in shares) at Mar. 31, 2019	52,931,127	33,822,823				22,489,093
Balance at Mar. 31, 2019	$ 528	$ 338	347,235	116,830	(258)	$ (115,731)	348,942
Balance (in shares) at Dec. 30, 2018	52,749,203	33,822,823				22,383,738
Balance at Dec. 30, 2018	$ 527	$ 338	344,769	125,071	(261)	$ (114,371)	356,073
Net income (loss)				(8,241)			(8,241)
Translation adjustment					3		3
Stock-based compensation (in shares)	1,924
Stock-based compensation			1,903				1,903
Acquisition of Class A treasury stock (in shares)						105,355
Acquisition of Class A treasury stock						$ (1,360)	(1,360)
Net income (loss)				(8,241)			(8,241)
Exercise of stock options (in shares)	180,000
Exercise of stock options	$ 1		563				564
Balance (in shares) at Mar. 31, 2019	52,931,127	33,822,823				22,489,093
Balance at Mar. 31, 2019	$ 528	$ 338	347,235	116,830	(258)	$ (115,731)	348,942
Balance (in shares) at Jun. 30, 2019	53,084,127	33,822,823				22,489,093
Balance at Jun. 30, 2019	$ 530	$ 338	349,319	108,525	(269)	$ (115,732)	342,711
Net income (loss)				49,224			49,224
Translation adjustment					17		17
Stock-based compensation (in shares)	468,683
Stock-based compensation	$ 5		6,436				6,441
Acquisition of Class A treasury stock (in shares)						753,804
Acquisition of Class A treasury stock						$ (10,667)	(10,667)
Net income (loss)				49,224			$ 49,224
Exercise of stock options (in shares)	150,000						150,000
Exercise of stock options	$ 2		283				$ 285
Balance (in shares) at Mar. 29, 2020	53,702,810	33,822,823				23,242,897
Balance at Mar. 29, 2020	$ 537	$ 338	356,038	157,749	(252)	$ (126,399)	388,011
Balance (in shares) at Dec. 29, 2019	53,678,919	33,822,823				22,859,956
Balance at Dec. 29, 2019	$ 536	$ 338	353,643	167,406	(253)	$ (120,762)	400,908
Net income (loss)				(9,657)			(9,657)
Translation adjustment					1		1
Stock-based compensation (in shares)	23,891
Stock-based compensation	$ 1		2,395				2,396
Acquisition of Class A treasury stock (in shares)						382,941
Acquisition of Class A treasury stock						$ (5,637)	(5,637)
Net income (loss)				(9,657)			(9,657)
Balance (in shares) at Mar. 29, 2020	53,702,810	33,822,823				23,242,897
Balance at Mar. 29, 2020	$ 537	$ 338	$ 356,038	$ 157,749	$ (252)	$ (126,399)	$ 388,011

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Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 29, 2020	Jun. 30, 2019
Current assets:
Cash and cash equivalents	$ 232,115	$ 172,923
Trade receivables, net	26,217	12,374
Inventories	74,037	92,361
Prepaid and other	21,312	25,580
Total current assets	353,681	303,238
Property, plant and equipment, net	166,399	166,681
Operating lease right-of-use assets	70,284
Goodwill	74,711	62,590
Other intangibles, net	66,500	59,615
Other assets	17,054	14,316
Total assets	748,629	606,440
Current liabilities:
Accounts payable	37,314	25,704
Accrued expenses	116,815	96,793
Current maturities of long-term debt	5,000	5,000
Current portion of long-term operating lease liabilities	9,524
Total current liabilities	168,653	127,497
Long-term debt	88,648	91,973
Long-term operating lease liabilities	64,251
Deferred tax liabilities	27,300	28,898
Other liabilities	11,766	15,361
Total liabilities	360,618	263,729
Commitments and contingencies (See Note 13 and Note 14)
Stockholders’ equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued
Additional paid-in-capital	356,038	349,319
Retained earnings	157,749	108,525
Accumulated other comprehensive loss	(252)	(269)
Treasury stock, at cost, 17,962,897 and 17,209,093 Class A shares at March 29, 2020 and June 30, 2019, respectively, and 5,280,000 Class B shares at March 29, 2020 and June 30, 2019	(126,399)	(115,732)
Total stockholders’ equity	388,011	342,711
Total liabilities and stockholders’ equity	748,629	606,440
Common Class A [Member]
Stockholders’ equity:
Common stock	537	530
Common Class B [Member]
Stockholders’ equity:
Common stock	$ 338	$ 338

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Note 12 - Business Segments (Details Textual)	9 Months Ended
	Mar. 29, 2020
Number of Reportable Segments	3

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Note 13 - Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 29, 2020 USD ($)
Remainder of 2020	$ 3,195
2021	11,683
2022	10,313
2023	9,905
2024	9,455
Thereafter	44,897
Total Future Minimum Lease Payments	89,448
Less Imputed Remaining Interest	15,673
Operating Lease, Liability, Total	$ 73,775

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Note 3 - Stock-based Compensation - Stock-based Compensation Expense Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 29, 2020	Mar. 31, 2019	Mar. 29, 2020	Mar. 31, 2019
Allocated share-based compensation expense	$ 2,396	$ 1,903	$ 6,441	$ 4,531
Deferred income tax benefit	594	328	1,597	982
Allocated share-based compensation expense, net	1,802	1,575	4,844	3,549
Share-based Payment Arrangement, Option [Member]
Allocated share-based compensation expense	6	67	99	250
Restricted Stock [Member]
Allocated share-based compensation expense	$ 2,390	$ 1,836	$ 6,342	$ 4,281

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Note 13 - Leases (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended			Nine Months Ended
	March 29, 2020			March 29, 2020
	(in thousands)
Lease costs:
Operating lease costs	$	3,384		$	10,690
Variable lease costs		3,679			11,565
Short-term lease cost		1,013			5,983
Sublease income		(243	)		(721	)
Total lease costs	$	7,833		$	27,517

	Nine Months Ended
	March 29, 2020
	(in thousands)
Cash paid for amounts included in measurement of operating lease liabilities	$	9,014
Right-of-use assets obtained in exchange for new operating lease liabilities	$	178

	March 29, 2020
	(in thousands)
Weighted-average remaining lease term - operating leases	9.5 years
Weighted-discount rate - operating leases		3.8	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Remainder of 2020	$	3,195
2021		11,683
2022		10,313
2023		9,905
2024		9,455
Thereafter		44,897
Total Future Minimum Lease Payments		89,448
Less Imputed Remaining Interest		15,673
Total	$	73,775

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

2020	$	16,588
2021		13,490
2022		12,081
2023		9,957
2024		9,498
Thereafter		44,953
Total Future Minimum Lease Payments	$	106,567

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Note 11 - Income Taxes

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

11

– Income Taxes

At the end of each interim reporting period, the Company estimates its effective income tax rate expected to be applicable for the full year. This estimate is used in providing for income taxes on a year-to-date basis and

may

change in subsequent interim periods. The Company’s effective tax rate from operations for the

three

and

nine

months ended

March 29, 2020

was

29.2%

and

23.8%

respectively, compared to

38.1%

and

21.7%

in the same periods of the prior year. The effective tax rates for fiscal

2020

and fiscal

2019

differed from the U.S. federal statutory rate of

21%

due to state income taxes and nondeductible expenses for executive compensation, partially offset by various permanent differences and tax credits, including excess tax benefits from stock-based compensation.

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various foreign countries. The Company is currently undergoing its U.S. federal examination for fiscal

2017,

however, fiscal year

2018

remains subject to U.S. federal examination. Due to ongoing state examinations and nonconformity with the U.S. federal statute of limitations for assessment, certain states remain open from fiscal

2015.

The Company's foreign income tax filings from fiscal

2014

are open for examination by its respective foreign tax authorities, mainly Canada, Brazil, and the United Kingdom.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At

March 29, 2020,

the Company has an unrecognized tax benefit, including accrued interest and penalties, of approximately

$0.9

million. The Company believes that

$0.2

million of unrecognized tax positions will be resolved over the next

twelve

months. 

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Note 3 - Stock-based Compensation

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

Note

3

– Stock-Based Compensation

The Company has a Long Term Incentive and Share Award Plan, which is more fully described in Note

12

and Note

13

to the consolidated financial statements included in the

Company’s Annual Report on Form

10

-K for the fiscal year ended

June 30, 2019

, that provides for the grant to eligible employees, consultants and directors of stock options, restricted shares, and other stock-based awards.

The amounts of stock-based compensation expense recognized in the periods presented are as follows:

	Three Months Ended				Nine Months Ended
	March 29, 2020		March 3 1 , 201 9		March 29, 2020		March 3 1 , 201 9
	(in thousands)
Stock options	$	6	$	67	$	99	$	250
Restricted stock		2,390		1,836		6,342		4,281
Total		2,396		1,903		6,441		4,531
Deferred income tax benefit		594		328		1,597		982
Stock-based compensation expense, net	$	1,802	$	1,575	$	4,844	$	3,549

Stock-based compensation is recorded within the following line items of operating expenses:

	Three Months Ended				Nine Months Ended
	March 29, 2020		March 3 1 , 201 9		March 29, 2020		March 31 , 201 9
	(in thousands)
Marketing and sales	$	1,097	$	830	$	2,960	$	1,816
Technology and development		181		118		473		274
General and administrative		1,118		955		3,008		2,441
Total	$	2,396	$	1,903	$	6,441	$	4,531

Stock based compensation expense has

not

been allocated between business segments, but is reflected as part of Corporate overhead (see 

Note

12

- Business Segments

).

Stock Options

The following table summarizes stock option activity during the 

nine

months ended

March 29, 2020:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding at June 30, 2019		1,365,000		$	2.48
Granted		-		$	-
Exercised		(150,000	)	$	1.90
Forfeited		-		$	-
Outstanding at March 29, 2020		1,215,000		$	2.55		1.5	$	12,550
Exercisable at March 29, 2020		1,215,000		$	2.55		1.5	$	12,550

As of

March 29, 2020,

the total future compensation cost related to non-vested options,

not

yet recognized in the statement of income, was

$0.0

million and the weighted average period over which these awards are expected to be recognized was

0.0

 years.

Restricted Stock

The Company grants shares of Common Stock to its employees that are subject to restrictions on transfer and risk of forfeiture until fulfillment of applicable service and performance conditions and, in certain cases, holding periods (Restricted Stock). The following table summarizes the activity of non-vested restricted stock awards during the

nine

months ended

March 29, 2020:

	Shares			Weighted Average Grant Date Fair Value
Non-vested at June 30, 2019		1,438,592		$	10.81
Granted		736,555		$	13.09
Vested		(468,683	)	$	10.37
Forfeited		(59,816	)	$	12.54
Non-vested at March 29, 2020		1,646,648		$	11.89

The fair value of non-vested shares is determined based on the closing stock price on the grant date. As of

March 29, 2020,

there was

$12.2

 million of total unrecognized compensation cost related to non-vested restricted stock-based compensation to be recognized over the weighted-average remaining period of

1.9

 years.  

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Note 7 - Investments

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

Note

7

– Investments

Equity investments without a readily determinable fair value

Investments in non-marketable equity instruments of private companies, where the Company does

not

possess the ability to exercise significant influence, are accounted for at cost, less impairment (assessed qualitatively at each reporting period), adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. These investments are included within “Other assets” in the Company’s consolidated balance sheets. The aggregate carrying amount of the Company’s cost method investments was

$2.8

million as of

March 29, 2020

and

$1.6

million as of

June 30, 2019. 

Equity investments with a readily determinable fair value

The Company also holds certain trading securities associated with its Non-Qualified Deferred Compensation Plan (“NQDC Plan”). These investments are measured using quoted market prices at the reporting date and are included within the “Other assets” line item in the consolidated balance sheets (see

Note

10

 - Fair Value Measurements

).

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Note 11 - Income Taxes (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Mar. 29, 2020	Mar. 31, 2019	Dec. 29, 2019	Mar. 29, 2020	Mar. 31, 2019	Jun. 28, 2020
Effective Income Tax Rate Reconciliation, Percent, Total	29.20%	38.10%		23.80%	21.70%
Income Tax Examination, Year under Examination			2017 2018
Unrecognized Tax Benefits, Ending Balance	$ 0.9			$ 0.9
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	$ 0.2			$ 0.2
Domestic Tax Authority [Member]
Open Tax Year			2015 2016 2017 2018 2019
Foreign Tax Authority [Member]
Open Tax Year			2014 2015 2016 2017 2018 2019
Forecast [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent						21.00%

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Note 13 - Leases - Lease Costs (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 29, 2020 USD ($)	Mar. 29, 2020 USD ($)
Operating lease costs	$ 3,384	$ 10,690
Variable lease costs	3,679	11,565
Short-term lease cost	1,013	5,983
Sublease income	(243)	(721)
Total lease costs	$ 7,833	27,517
Cash paid for amounts included in measurement of operating lease liabilities		9,014
Right-of-use assets obtained in exchange for new operating lease liabilities		$ 178
Weighted-average remaining lease term - operating leases (Year)	9 years 182 days	9 years 182 days
Weighted-discount rate - operating leases	3.80%	3.80%

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Mar. 29, 2020	Mar. 31, 2019
Operating activities:
Net income (loss)	$ 49,224	$ 43,071
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	23,268	22,840
Amortization of deferred financing costs	486	671
Deferred income taxes	(1,597)	811
Bad debt expense	1,201	1,018
Stock-based compensation	6,441	4,531
Other non-cash items	(23)	(301)
Changes in operating items:
Trade receivables	(15,044)	(7,249)
Inventories	19,353	14,448
Prepaid and other	3,148	2,675
Accounts payable and accrued expenses	31,442	14,741
Other assets and liabilities	(557)	(251)
Net cash provided by operating activities	117,342	97,005
Investing activities:
Acquisitions, net of cash acquired	(20,500)
Capital expenditures, net of non-cash expenditures	(22,282)	(16,845)
Purchase of equity investments	(1,176)
Net cash used in investing activities	(43,958)	(16,845)
Financing activities:
Acquisition of treasury stock	(10,667)	(14,765)
Proceeds from exercise of employee stock options	285	929
Proceeds from bank borrowings	20,000	30,000
Repayment of notes payable and bank borrowings	(23,750)	(37,187)
Debt issuance cost	(60)
Net cash used in financing activities	(14,192)	(21,023)
Net change in cash and cash equivalents	59,192	59,137
Cash and cash equivalents:
Beginning of period	172,923	147,240
End of period	$ 232,115	$ 206,377

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Mar. 29, 2020	Jun. 30, 2019
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	0	0
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	200,000,000	200,000,000
Common stock, issued (in shares)	53,702,810	53,084,127
Treasury stock, shares (in shares)	17,962,897	17,209,093
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	200,000,000	200,000,000
Common stock, issued (in shares)	33,822,823	33,822,823
Treasury stock, shares (in shares)	5,280,000	5,280,000

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Note 7 - Investments (Details Textual) - USD ($) $ in Millions	Mar. 29, 2020	Jun. 30, 2019
Cost Method Investments	$ 2.8	$ 1.6

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Note 5 - Inventory - Summary of Inventory (Details) - USD ($) $ in Thousands	Mar. 29, 2020	Jun. 30, 2019
Finished goods	$ 32,361	$ 36,820
Work-in-process	10,332	17,535
Raw materials	31,344	38,006
Total inventory	$ 74,037	$ 92,361

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Note 15 - Subsequent Event-Closure of Harry & David Retail Stores

9 Months Ended

Mar. 29, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

Note

15

–

Subsequent

Event

-Closure of Harry & David Retail Stores

On

April 14, 2020,

the Company made the strategic decision to permanently close

38

of its

39

Harry & David branded stores, which had previously been closed on a temporary basis due to COVID-

19,

in accordance with state and local regulations. This will result in a charge within the range of

$4.0

-

$5.0

million in our

fourth

quarter for lease obligations, employee costs and other store closure costs.

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Note 4 - Acquisition (Tables)

9 Months Ended

Mar. 29, 2020

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Shari’s Berries Preliminary Purchase Price Allocation
	(in thousands)
Current assets	$	1,029
Intangible assets		7,540
Goodwill		12,121
Total assets acquired		20,690
Current liabilities		190
Net assets acquired	$	20,500