1-800-Flowers.com Inc (FLWS, Financial) recently held its fiscal 2023 fourth quarter and year-end earnings call. The company's senior leadership, including Chairman and CEO Jim McCann, President Tom Hartnett, and CFO Bill Shea, discussed the company's performance and future outlook. Despite facing numerous challenges such as the pandemic, global supply chain disruptions, labor shortages, inflationary pressures, and significant changes in consumer behavior, the company has seen an improving macro environment on several fronts. The company remains optimistic about its prospects and is confident in its position to grow and build shareholder value.
Leadership Transition and Company Performance
During the call, McCann acknowledged the stepping down of his brother Chris as CEO due to personal health reasons. He praised Chris's contributions to the company's rapid growth and market-leading position. McCann also highlighted the role of Tom Hartnett, who has been with the company for over 30 years and was promoted to president last year. Despite facing numerous challenges, the company has seen an improving macro environment, leading to margin improvement in fiscal '23. The company expects to continue benefiting from lower ocean freight costs and efforts to improve efficiencies.
Business Update and Future Outlook
Tom Hartnett provided a business update, noting that the company's fourth quarter adjusted EBITDA improved over $10 million from the prior year. Despite a challenging macro environment, the company was able to retain the majority of the revenues gained over the last few years. Hartnett also highlighted the company's focus on increasing the lifetime value of its existing customer base by converting them into multi-brand customers. The company has implemented several initiatives to increase these metrics, including highlighting its family of brands across its websites and enhancing its search function.
Financial Review and Guidance
CFO Bill Shea provided a financial review, noting that the company's fourth quarter adjusted EBITDA came in better than expectations. The company's top line continues to be pressured by a complex consumer environment, but this was mitigated by the improvement of gross margin and efforts to optimize expenses. Shea also highlighted that the company expects its gross margin to continue its return to historical levels in the low 40s percent range. For fiscal '24, the company expects total revenues to decline in the mid-single digits compared to the prior year, adjusted EBITDA to be in the range of $95 million to $100 million, and free cash flow to be in the range of $60 million to $65 million.
In conclusion, despite the challenging consumer environment, 1-800-Flowers.com Inc remains confident in its ability to serve its customers and achieve its historical revenue growth, gross margin, and adjusted EBITDA margin rates over the longer term.
