1-800-FLOWERS.COM (FLWS) 31 Aug 232023 Q4 Earnings call transcript

Good morning, and welcome to the 1-800-Flowers.com Fiscal 2023 Fourth Quarter and Year-End Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Andy Milevoj, Senior Vice President, Investor Relations. Please go ahead.

Good morning, and welcome to our fiscal 2023 fourth quarter and year-end earnings call.

Joining us today are Jim McCann, Chairman and CEO; Tom Hartnett, President; and Bill Shea, CFO.

in like make you covered on safe disclaimer I'd the some by begin, and harbor we release statements today's contained we to that remind of the public Before documents. press our call are

Commission. including statements that we statements and risks are events. statements subject forward-looking future current on uncertainties, predictions, are The projections to During with this statements contained based Exchange in or make the and those update call. to expectations with filings call, These will press other that about this made and forward-looking disclaims and assumptions our Securities company any release public be discussed the obligation during any and of may

GAAP. most will measures supplemental Jim. Additionally, discuss And Reconciliations of comparable were directly call financial these certain turn not release. earnings to non-GAAP tables measures now in to the that I'll found financial the can accordance our be the we measures of GAAP with prepared in over

together. the CEO thank many market-leading position the morning, my to don't years know, for and me. getting of take stepping Chris played we our I who Andy, last to contributions enhancing of rapid company. well. our personal be you as as And look to was integral our health that I growth an for overseeing company earnings over It's forward know you Many today. good our that announced to I to worked you Thanks, reasons. this for have brother Since you Chris some with everyone. know down his opportunity call, great Chris I of role want and and to all in of he

technology. curve. We promoted just of and commerce next, destination consumer the remains we innovation. I Tom in and the sure of let's going. that, -- to to of we've it as for relationship ensured overseeing to embracing business continue is will turn Whether AI grateful see the taking this were ahead do Harnett execution to Chris and leave moment will before going know, moment, the where of was the embraced needs talent collectively look as and depth over customers' be You our to a commerce always currently organization. and to XX Tom, bench top will a a initiatives technologies, has we're a short and was innovation coming want at been our execute us in year. new role and critical of absence coming But has with to to to who our leave the a Board solving the phone absence update. we we our take to role of our Internet played to opportunity of for to of of leads I history I'll strategy we to last in team a successful to celebratory played after call has vital our where a on management expanding new needs. In where expect gifting and continue talented provide of are the of from have Directors. mobile waves the line waves the our of highlight X-XXX-Flowers strategic over rich that who a company many that the been Tom years President Tom you role help made in our look business take Chris a where of And millions who the beyond number social we always a was the him company navigate us and capacity now customers. ends, in technology return We're what's play his

global in past particular, couple consumer business change significant business, with and significantly and during pressure and many behavior. years, in This along of pandemic, by our profitability. but the margin operating meaningful affected our aspects the inflationary shortages with challenges chain then the gross of disruptions the companies faced numerous Over supply many beginning profit labor we, followed in

automation optimization forces, improvement we with led macro our to pre-pandemic efforts efficiencies, Over improving costs year, the fiscal to certain investments rates the increase combined off our efforts we began experience their have have past environment on logistics fronts, approached commodity freight an These own highs. that including to fiscal that 'XX. saw several including macro come ocean and their margin levels and in

back As that a costs mean freight continue the expect from to efforts to efficiencies. to closer to improve the our benefit to continue continues and to ocean swing costs, revert commodity we pendulum in 'XX, fiscal lower

to a a which its mean. XX%, approximately next our As expect prior historical of to sort of margin we X to further average we story fiscal down is look little return gross and the road, XX-year we say, factors 'XX. continue a the reversion X, the or to benefit these year This experienced from of to

historical will the expenses consumer is achieve EBITDA environment environment and customer to question for will if. The predict combined discretionary more enable we it's to recovery, gross enhance regard growth, margins experience, it we see optimize when, have very difficult consumer margin revenue with and an favorable spend, profit and improve of While sales with our margin to a precisely us margin we growth to believe when improved that rates. not actions taken

reasons, these business. our call perform now to turn update very Tom for we I'll the building prospects while on the remain that about value. well shareholder confident over grow to an optimistic we positioned company For and our are and are

good everyone. and morning, Jim, Thanks,

rates $XX interest million and rising recession. would pressures, the quarter we a by successfully and anticipated entered from that to We improved fiscal as year an fourth challenged increasing which environment. consumers exacerbated over adjusted continue consumer Our complex EBITDA we ongoing prior further be ever-changing of fears navigate XXXX, was by inflationary

second during periods. we As we year, half holiday strings of our fiscal the even outside of second the into fiscal especially their our consumers pull tighter, move gifting from holiday purse the saw quarter period

and fourth impact sales quarter on full the declined declined XX.X% basis, they our result, excluding year ago. of year a As a XXrd the week X.X%, a

believe it's place in to we important context. However, proper this the

a few fiscal to that billion this we XXXX. X% sales the revenue of our By challenging was focusing fiscal frequency we for against we had over majority macro gifts. base, fiscal XX% over the While from an of we the revenues year, sales the the and XX since able of million Despite our on years backdrop million XX declined are existing 'XX. bigger, company existing the were better, few than retention and fiscal ago. the XXXX, just of spent almost put, of in customers environment, stronger Simply doubling we're a sales gained represented our today $X last more customer years. In customers revenues retain than

focused 'XX. were X.X efficiency softer on we nonetheless we While marketing consumer added customers during environment, a in fiscal million new

of our yet consumer-facing multi-brand represent will a and ] but revenue. value important, opportunity company, into of As be base base, they currently [ tremendous existing converting Multi-brand increasing we base always XX% them customer XX% increasing growing our by customer customers. see customer customers for lifetime of approximately approximately account our our the

includes over provide gift. Throughout continue family we family 'XX, to implemented of increase search offerings. can brands fiscal warehouse continue members higher-value towards our This several facilities, on and point have to bundles ideas gifting brands. customers Celebrations page. to websites our these across our million we by cross-brand leveraging initiatives X.X across And Passport in a from gravitate function encouraged offer We've metrics. higher these highlighting a single results for use our brand-agnostic enhancing bundles who benefits our brands see to already are our of of special as create growth customers our Additionally, one-of-a-kind portfolio their strong to to truly unique price we relevant

X% a for result, increased approximately year. our As the AOV

poem MomVerse to for connected Dad GPT use generative We free and help and will a customers price that encouraged points, digital fathers. to lives. their our mothers all includes special historical include expand Joke tools providing lyric their both this AI-powered for of a people options or stay offerings continue joke free provide examples lower our customers create their to Great products higher to for our in and to important customers. the This with gifting our our

We this generative integrating are engagements. technology further AI customer into facets of our many

will this to and craft we use who lost help of their technology checkout, at be their instance, express customers gift for recipient. may thoughtful For sentiments words, messages

through addition offerings organically acquisitions in also expanded In both and fiscal 'XX. initiatives, these to we our

tuck-in growth leadership acquisition platform product front, built on our platform essentially This we launched of space. in addition, April. incorporate On and example e-commerce in perfect us the acquired Berries, to we as Remembered acquisition category the A further the how was January like a offerings gifting by that purchasing rapid demonstrates enables position platform and our our in website in new a expand brands complementary BXB personalization into IP. our much their Shari's seamlessly just for Things

our to Turning margins.

improved operating we revenue margin a As fourth managing to our we gross quarter did had decline. organization see of great during the the to our and anticipated, continue helped offset entire expenses job that

detail, significantly. more margin gross quarter fourth in improved our discuss will Bill As

also continue in We business manage the this environment. to well

year, by million efficiently, enable quarter our excluding impairment the more with for the during reduce operating charge to us in operate customers the our more focus to to million efforts $XX.X fourth coupled third fiscal $XX.X existing by nurturing and on Our decision taken costs quarter. the

everyday support to leverage are As improving to focus optimizing tremendous grow top multi-brand to brands and experience, our shopping customer portfolio the gifting enhancing margins our continue line. we the of to XXXX, expenses. will our Simultaneously, on across brands and we turn encourage focused fiscal we efforts to

review. turn Now the provide to over Bill I'll to financial it

Thanks, Tom.

and our our our fourth we came year was in continued optimize This by our Many included fourth more our began persisted by gross efficiently. and improvement in into throughout margin of the adjusted Tom quarter. mitigated trends line, quarter of experienced that better continued EBITDA the pressure As than the expectations. expenses operate on that to discussion, highlighted his second efforts the top our quarter which in fiscal

each Let's take a and top the by of to pressured fiscal consumer the environment. our into Throughout be year continues these. a moment fourth to quarter, line continuing review complex

As debt, consumers reduced their they and card pressures, escalating higher by were spending. discretionary rates credit inflationary challenged interest ongoing

in during the spending the excluding stronger the demand week year. We As fourth quarter or pullback holiday everyday prior saw experienced impact a while impact Christmas, performance gifting. we result, revenue of periods, in our declined our for principally XX.X%, XXrd XX.X% consumer the

profit interesting margin, turn gross let's us. a our much more Now which to is for story

write-offs. in we second certain half back the anticipated, lower of quarter. had inventory gross beginning Gross our an ocean in decline pricing improvement benefited and year, strategic margins the from margin we during costs to As initiatives, our experience in costs began the and freight commodity lower a

our during improved points result, to XX basis third points the points margin a XX and gross second As during fourth basis during basis the quarter quarter, accelerated the XXX quarter.

focused points fiscal continue to margin controlling recorded historical weighed gross been been the return can million our as results. It was improved has in margin for by this quarter year $XX.X was year, For X.X% we light or is percent X.X% gross of excluding control levels the as operating variables that the $XX.X to our quarter. we forward, number team on third in and basis the steadfast our to full annual as range. In our reduced first charge look prior XX.X% XX to and important the the low quarter We the down has million year, compared optimizing we line expect by that to or highlight impairment during expenses its XXs the the for expenses. top challenges,

$X.X due of to quarter by $X.X EBITDA basis, our As $XX.X improved despite representing revenue a to aforementioned full year EBITDA the fourth was year adjusted million line million, primarily compared the decline the adjusted a of loss million top $XX.X as a a result, our decline. prior to pressure. On million,

prior the adjusted an $X.XX quarter improved However, loss a with was in EBITDA our compared of or $XX.X $X.XX it share that per period. share since million compared $XX.X loss or net prior by with the or loss $X.XX loss quarter, for per in per $XX $X.XX adjusted $XX.X noted million be share million Adjusted year year-over-year $XX.X period. was Net per million the year share, or of net net nearly the should first has million.

or income 'XX, diluted the the was share per year loss an Adjusted $X.XX of diluted million net share, impairment adjusted $XX.X and $XX.X share, for goodwill or per compared asset per period. year year share of $X.XX of in share compared million per $X.XX an prior which was includes income million or diluted net the net For the charge noncash with $XX.X the year income period. $XX.X intangible prior million after-tax $XX.X per in $X.XX million or or $X.XX fiscal net with

segment freight certain Now spend. revenue margin million our compared was in improved for gross declining costs Gift strategic $XXX.X segment, in improvement the was segment well our million, XXX the ocean our XX.X% margin year let's in margin year the in period, lower loss $XX.X lower basis compared compared of loss inventory and prior review and prior costs as In was improvement Baskets the XX.X% profit a year led million efficient aforementioned $XX.X XX.X% as initiatives, pricing reflecting and with write-offs. Segment to marketing Gourmet margin improvement commodity million contribution more contribution Gross points quarter Food prior results. with The in the period. by $XXX.X with period.

adjusted without X.X% the For Profit the million $XX.X prior the the margin for billion million results to contribution compared of in $XX.X the was prior segment with quarter. compared third in due $XXX.X XX.X% the $X this the fourth to decreased large margin year year, for to the prior impairment million year. in part to the year, year segment year. And revenue in quarter XX.X% was compared charge in

with segment $XX.X period. million XXX period. Our million, $XXX.X Revenue was margin with XX.X% prior contribution and year basis margin in compared in period. Gift million margin declining was prior the improved points with for in million XX% Consumer compared of $XXX prior segment $XX.X the compared Floral quarter the XX% Gross the year segment. to And year contribution profit

year. XX.X% the revenues $XXX.X prior with segment in year. $X.XX the the compared with million year, in XX.X% was compared And Gross margin For decreased million with prior prior margin million $XXX contribution XX.X% to billion in the year. compared was $XX.X

the margin decreased year was $XX.X $XX to mix. compared in XX.X% Now product BloomNet primarily the with $XX in segment. as profit quarter million with as Revenue the XX.X% costs Gross in compared contribution for XX.X% million well million year, million reflecting shipping ocean was with $X.X period. prior ] For with compared margin Segment was compared XX.X% $XXX.X decreased million in to was year. with $XX.X the prior million the million prior and contribution year, X.X% XX.X% prior profit year. prior in [ segment period. million year the margin with compared in the year, $XXX.X revenue year $XX.X compared Gross the margin for the prior

Regarding cash flow. free

line $XX.X year, we efforts $XXX supply million, when This free sold generated more to year ago bring million chain as through of we the flow prior an improvement we we from over a of For cash operations year. nonperishable in purchased the our primarily with faced constraints. reflects inventory inventory

sheet. strong X-year a enhances And and $XXX sheet, credit amended to a credit I and turn loan on I balance comprised further to facility, entered into extended balance wanted that credit million million our which Before term our we June XX. highlight our $XXX revolving agreement of million agreement $XXX

our end in compared new the 'XX, million $XXX.X cash sheet. million the with fiscal million 'XX. $XX.X capital through $XX.X reduction of At selling to declined balance Inventory closing our at position cash investment was to and inventory, and of of working the CapEx $XXX.X benefit nonperishable in Turning facility. the credit The million. the increase fiscal reflects end

our at years, facilities. in in X fiscal elevated support reminder, the to our Hebron, a automation investments As Atlanta and capital expenditures prior were Ohio

in $XXX year debt $XX revolving debt compared terms And $XX In debt, ago. million we by improved million borrowings million net had under term of million $XXX.X facility. our credit a our position with no and to

Regarding for guidance fiscal 'XX.

to fiscal our that to there guidance. factors contributed turn are we As 'XX, several

environment, student consumers balances resumption higher higher impacted rates, to by continue spending in the we and moderate repayments. their the card of interest loan credit First, current to expect

holiday remain expect the the first and pressured We and revenues fiscal to begin during year the to the half of into second during rebound half. period

certain approaching commodity we our continue pre-pandemic benefit efficiencies gross their improve investments. that and from are from levels, freight continue to mean as our automation Second, margins to expect revert to that rates we costs to ocean

fiscal fiscal XX.X% a 'XX be expect north As result, XX% to in we of our just 'XX. compared to margins

there to a are as variations margin Just reminder, on quarterly due mix. sales our gross seasonal

to basis and flow million million to compared percentage decline to increased assumes a year. includes 'XX. to with the of in the range to cash full be free approximately 'XX we bonus compensation guidance Adjusted expense, $XX fiscal be partial to in increase. mid-single This million these our amounts million which total compared assumptions, as a digits fiscal in $XX the bonus payout expect the to of Third, million. prior in $XX $XXX Based in payout $XX range revenues a on on EBITDA

let Bill, would last that of where had as were were briefly. we it you an ran prepping year. to to interesting this you something here. Maybe When for through you if me this, help do ask compared we summary year again

Sure, Jim.

year we really was ago reduce we compared year The and on challenges and inventory cash last this just that a by were chain we where $XX to have it million our and year. a today. negative today, generated ago discussed we We As supply labor were able where positive began to to prepare are me striking of million. $XX.X reflect year flow We for million to operations to a issues as $XX.X dissipated. manage our free

times. and enhances second X-year $XX Our beyond. We in continue improvement secured strong quarter and throughout million, in reduce operate sheet, critical fiscal balance costs we operating and over fiscal gross efficiently which margin that able a further to trend business new already the and inflected these credit facility 'XX our during were by its 'XX, will continued complicated our a accomplishment

company revenue margin EBITDA gross our we And margin are I'll the when challenging, serve back are well ready never them has achieve our and adjusted Jim. the positioned positioned remains rates that, they to growth, over shop. to environment to term. With longer historical call you, consumer turn the better to While been

Thanks, Bill.

a think a the very back step was obviously year last you summary picture to little to accomplish tonality the in bit need I been able to And paints sometimes year. different. that what you've see

benefits get unforeseen, the macro So barring environment from Bill's is unforeseen of because or of comments that X there and you because from I confidence the the have attractive picture taken a X the looked year mean. always quite we can the the the think summary ahead, us or there, to we've more reverting why of Tom's for steps and about

now questions. the I think open call it's we for that appropriate

the the ask you those a I'll could So question. if in operator asking for please restate instructions interested

[Operator Instructions] Kupinski The NOBLE Markets. first question with Michael from comes Capital

couple questions of A here.

distribution You talked that us years was give a ability know maybe just to and And the color some how quick your a been about bit if improvement significant you wondering little given little fill just I couple facilities, a the needed that and also people labor, follow-ups. there in I have a more increases in spots And then prior. many was have, can I for you wondering production bit little labor? this bit has about if you I of and on can pricing the years past. versus year your talk you

tackle Michael, questions. it's here. Jim To your

is labor on but will Bill gone up just broader X factors. One from the a details, costs front, On perspective, labor. you have give

entry and warehouse So level, first let's focus labor. of kind logistics on

labor, now ago. only not an So the when year, we Last they're to cost ago, I hour. issues hour, say they're were and had costs we availability closer X our -- year $XX do $XX there now years an of a last year, about have

to people you our maybe every real Ohio the But The ship And positions. this So were weren't build was, run high Bill, able and position, to able could Christmas we higher example XXXX by in about particular, being to this Michael we have overtime had we to. automation yes, when to holiday an of The able our labor in fill number past asked cost out there didn't of before, facility. work distribution we year all we extra. of had cost. benefit year temporary talk of Christmas, packages the also ask a we efficiencies. about terms

X Yes, getting Michael, because supply late we automated you challenges the in. it but facility years recall, ago, our if are was steel chain Ohio

it packages So were versus out past we XXX,XXX of on moved we in XX,XXX, year facility about we peak the that Christmas did and like with less XX,XXX, a about prior, labor. day this

so days I that this peak And before first, we day. would in XXX to did it And be the packages. did X of [ over year, used X we ] XXX,XXX think a row be

it was -- So labor? less and Bill we a did that X/X

Not this we we did that upcoming bad, we'll -- quite year -- we so year, last of labor. the certainly it have less third will implemented be with what did And now but year facility.

will November, Atlanta automation. out of more challenges. of year again, It of year our we'll because on efficiency So be the that that get second the came supply facility. chain in facility Last

second which So we we our get year last of year. some [ the efforts the as And live into went automation facility, that. put have year Medford We'll also that second ] well. as

of So improve continue a ] a on for facilities. [ X new full will to because kind our in year in and efficiency more just laid having having 'XX fiscal experience

Tom. it's Michael,

don't Just pretty holiday partially seeing ramp. think them going getting your folks a question don't expect is And to going to season We the to for fine now, in rates we rise partners. good we'll our our what add talking we we're to are while and we right just And on, and I either. need diminish, what the think seeing be we forward environment. also, is expect

shape least -- good stand the here for So we in we're today. we think where at

pre-pandemic So illusion, when no labor a to the aren't to return Michael, the reversion mean, going about to about we talk fact levels. rates that we have

So they are permanent.

side automation those less you we're needing brings So things the more glad of we the the years now have. over on benefit with people and very X made that being of where X, last the investments productive

a that shift due is impact a of how maybe the to way to much revenue there And determine in lower-priced was products?

lower-priced a products. So we didn't much to see shift of

in we Tom size. in pointed out As increase order had actually an average comments, our his

on shopper occasions they the like of during that everyday the think wasn't pandemic. there lower we been might funnel have end just those the So

wasn't -- it's So it of items. selling result lower a price

comments, In fact, want in too, Tom terms the we we in of that of average products range to both that ticket offer. mentioned his increase our

So the we think too. beginning opportunity increase we're to we some At to plans to more items. the some that items same introduce have lower-priced time, have higher-priced

our see expand. you'll range So

end the customers -- drop on suffer the think products lower I scale Michael, price of out. income -- the end those we discretionary we was of so income lower saw in where the lower point saw some

the And some making acquisitions has company talk during your environment, during finally successful about of were acquisitions was been in in those just periods. environment? on there periods are in best the I of M&A and acquisition wondering the economic uncertainty you think I pipeline? this in Can acquisitions

Michael, Jim, again.

side a because told syndication we're doesn't deal fortunate of opportunities some at we On you tougher, And market for little relationships that more banking Bill the we're a did that which the the present to past our of in now, very having bit the when tightness is that in long-term profitable, end tightness June. have companies the history, quite get seen the don't that that why the enough themselves. and have us M&A aren't it have. things, we're bode well team relationships told financing lucky have don't we're even yes, now, times and our pleased with That's of secured it in

them there of low will we've call access acquisitions, businesses is might with of intellectual that helps become Remembered addition acquisitions most individuals, sorts but yes, we done. recent with But capabilities. X to portfolio -- some property and gifting that done mostly hard cash, to acquisitions. create plan SmartGift, had primarily for a only of Things opportunities. We So what their risk the We've think, SmartGift and you and even done see us. terrific our products. it's It

very a contract So with with years few been engineers that's a company we've came few basis. a working just that a that and for on talented people,

So knew it we well.

person that Things URLs million The platform that. with second came really one And now. really state-of-the-art X property, put we've that of our list X doors which customer have capability top got intellectual personalization and there, that of well We was again, different the on the and into we capabilities, Remembered, done. and the is

nicely. We in was just did novo have the there's Personalization example, Chicago at grow de quality was out Mall, to we which bring we're time which team, Remember we with we ourselves. And with the with where Personalization did that that excited to about, of me. that now which Mall have with striking Universe, particularly team our I there we range start-up at Personalization acquisition, the a brand we addition peak, can the Things business an was Things perfect Remembered under its Things the at consumer are shocked Michael, learn see price our Remembered, which of X,XXX one brand And the points, can of products review and we a history. was their stores really to

of can course, did holiday was a space of new we grow already fashion, and we top and, well. it that to deliberate customers, we picked and that that appealing out of sit wedding IP what in baby a So infrastructure very in up range especially we as on have broader

Alex comes question next Craig-Hallum. Fuhrman The with from

I comes to of would marketing know growth love new confidence obviously, gifting, will get growth, from sense getting And to some about pleasure point guys and to I get ask a say, at back kind future. you of a of just you Are there product multi-branded you of any been gives is know of if want years all, been such that to first to matter it soon. you just a growth? or hope it's at launches in not has campaigns? revenue challenging confidence a mentioned where big What and you of wanted over I Chris, you revenue kind but when that uptick that I here. the X-XXX-Flowers resume revenue the really kind are in

with it's Thanksgiving Well, we business, The Alex in to the Christmas and time going everyday it for gifts of where but buy a internally to. mean us, purely have, with historically you to really element, ask people to discretionary the you our like we've There's behavior we end quarter fiscal challenge confident, want sound some back mix, which milestone I'll all kidding. that to point and of the Tom become we been big more Passport to can of everyday and and didn't part customer, color second the there a on the are it's we the give that. -- range discretionary. important has the not has the when historical important of our patterns we were products at very just to holidays, business seen and go be things The comes that discretionary think, that

think mentioned -- his growth years small XX%. had summary as of CAGR Bill we pre-pandemic, you we've XX done. rate, growth I That and acquisition tuck-ins obviously, organic look was in that if of So combination a the back, of what compounded some here, of

As we rise. XX points a that linear without time, same straight margin look year-to-year XX% basis or being take give had a we gross also back it over that during will period

confidence. don't we've for where forecast that But an the those looking point ingredient. the So and sales a we you from important get to. will we're you why Tom, think that be metrics have anchored to on our future why X are touch back of view,

Yes.

we periods we period as products better results first, of than think of user our So the look year, mentioned results I there, begin believe our deeper the the to as to is We seeing and holiday with the and our the Jim periods, investments are marketplace made, experience we our into of beyond during had products family to rebound during we that earlier, a seeing everyday as seen that what good visibility Jim more we've XXXX mentioned. And and customers, and products, mean, sales extended have the have relationship increasing build we're this holiday focus existing acquisitions. brands, array continue we a lot organic we're includes we opportunity. expecting

in pullbacks -- second in of for seen will we year, all As to et increasing great as the marketing And in the Bill many us. demand, management. We've we do again, for guide have expense half be well history a as we've that will is mentioned been and the here economy, our that order more drive plans prudent we appropriate in the cetera. years, think

is the we indications and So that to see lot means that have can't pre-pandemic levels. from it a consumers consumer going we exactly have to confidence when other the return, gives returned but where do of predict us

so other factors And that give the along with many will confidence us consumer return. that

Anthony The with & Sidoti Lebiedzinski next from comes question Company.

Welcome wishes speedy back, a the for Chris recovery. and to Jim, best

a previous So yes the so guess follow-up I -- just question. on

everyday far obviously As as been business challenged. has the gifting

not why to maybe more -- place the back year, that I business I spending know to that As in that? there. there -- far until revenue fine to mentioned you're But you you're the about the off spending, better, waiting do you're multi-branded back increasing to perhaps mean comment why Or half you do I line demand that far as can with a I it main bundles. half better reason some of to looking actually if get in there's as do a sooner? mean better navigate know marketing looking put levers as your is pull

of to some that. the let's as Bill we costs build that end get of And our see on are on that continue let's that best as I his capabilities now on at as we time. manage look But that on are we take marketing our team closer we frankly, period, let's And Tom opportunity. powder year. during be this time it's comment top one prudent, But materials, can. we the in of place can think over there we pedal, think We and veins calendar to keep -- the marketing. have will efficiencies, to working more some fully build and online this is come step the that ability have frankly, will plants gas those to dry, we plus

different the your So continue a happy do question see themselves in when categories timing, of when and you it's And themselves by spending them that. doing, to all into seen do fire quite opportunity we're we we've see guns frankly, to now as oblivion. you some have frankly, best competitors overspending

That makes right. All Oka. Okay. sense. then... And

you want something to do to that? Bill, add

the time we'll based be are. efficiently We holiday, do what time. success the lot But too, a is this we going better macro believe just a we coming get tell that bit that the the the in the always and at on point is to this we'll messages trends to struggling the with, operate and period. invest. at of to this marketplace our holiday think I holiday, will little off begin have is consumer season for as still Yes. us to consumer through slow business continue This us monitor more, in the

based et costs, in market We see segments, where upon are cetera. customer always we iterating and acquisition

veins are there will we taking opportunities. those Jim said, of be advantage if So that

are cost reported but we've through that most arena, you've the who not think has customer seen in e-commerce the businesses, companies. acquisition consumer-facing I Anthony, gone for for roof on particularly those ourselves just and

for our and So rely stimulate Passport to existing make or very with on the our able more our is hands an base, that others we're brand in our existing basis our beyond offers pull when primary it and on advertising expensive to customers of expensive introduction. customer base ability

So -- to come seen much. we're down able that's you've so costs our why

sort we're for like Christmas. are more and market the that in and continuing of until opportunities Halloween, people when that's Thanksgiving occasions So are rope-up gifting better,

of sense. makes right. That lot All a

Xx you as than Passport that So spend are more or as trend far still less nonmembers? seeing or members, Has more continued? them X

continued, has It Anthony.

AOV with We have little customers, customers, those tick bit multi-brand up we're seen for seeing customers, and fact, year. a that Passport the too, stable the in

you. Got

seeing about Okay. talked you certain then And lower for cost also commodities.

most the seen seeing and pressure you the where have relief are where So you points? most

lots David, time see And & use bake farm product, stubborn, the on X of we Wolferman's. we X, chickens. spend the Bill eggs on He of but have And cost make a our and Anthony, are with lots to or lot in of and months. a expert Well, there. the starting those there, been We X within Cheryl's, of tripled is lot They Harry butter. improve commodities. trends

chicken chocolates, for our through, and all trending build. costs they high shortage hold triple cocoa from went a that are peak flu almost it to had Did we You now? were all of where commodities those

Yes.

So we use haven't mean all lot some geopolitical be come issues. be as are and and a almonds, way continues continue that of and back historic The to to eggs extremely back types macro cashews, the ones high. eggs of to that Sugar the high. wheat of. kind have of due butter all Corn their to nuts, are and cocoa

have very to cost high Others that levels. are means of still we So some a commodities a have already from historical their at basis. reverted mix back

last kicking On out the and that the out team, ahead of real was got Bill cost pointed the side we freight year, shocker. other we the pointed Tom and Chris ocean

bringing unbudgeted were cell. Food in Now increased BloomNet we particularly use what $XX And and materials, Brands, million... ocean freight, with there container were in nonperishable shipping year last materials our our both packing in and costs Bill,

of historically up we've million. to at $XX So to about those down now. We're peak spent levels historical around that raised pre-rise, $XX million kind back

going just that good close we've a think -- in ocean you, will think Anthony, that now labor come we thing pre-pandemic labor to our good That's to told certainly is labor we back been go level. very think for don't the aren't backwards rate, and to stalling, has don't but -- which to we But freight of people able revert. We is inflation we adjust. thing

$X,XXX we back high maybe container in a low from went a So range to pre-pandemic of or $XX,XXX $X,XXX, down with the something ]. a was [

we're pre-pandemic there, on down either. the we're expecting close not side, to expecting very levels But not but to huge we're it inflation there. So come labor

able So not burden as prep in fill being for incurring jobs big overtime to that's the we any us and year. the costs holiday this automation, why to

last guess, fiscal what's Bill, outlook for my CapEx question, Understood. And the 'XX? for I

We year's at level. think Yes. last be below CapEx will or

the range. CapEx $XX 'XX, automation that remember, some and and to brought of fiscal 'XX, past for year, million you we of fiscal back in million $XX it we $XX and because efforts And if respectively. be of about had to elevated million, down we the spend, $XX So expect technology a lot 'XX of This million.

But and the it on really because CapEx was good obviously, was helped on automation where us labor prudent challenged. throughput really spending, helped

over session. I concludes to the McCann This for like would to question-and-answer remarks. back closing any turn our Jim conference

your all time holiday for interest you and the weekend thank end and today. this good appreciate ready I at your for you, summer. a of We're questions. Thank getting the

and hope a I your So good fun for and you one families. it's

please handle and of to any Andy and chat. out your don't you Tom reach If any have to us, other hesitate questions, and question Bill to are available or

certainly weekend. and the those So we look forward to holiday addressing days in after ahead the

the So weekend best you. of to

today's for conference attending The has Thank concluded. you presentation. now

disconnect. now may You