Order Management Woes: 1-800-FLOWERS.COM's Q2 2025 Earnings Call Reveals Contradictions on Revenue, OMS Challenges, and Marketing Effectiveness

These are the key contradictions discussed in 1-800-FLOWERS.COM's latest 2025 Q2 earnings call, specifically including: OMS implementation challenges and financial impact, expected revenue and financial outlook, and promotional activities and marketing effectiveness:



Revenue Decline and Consumer Demand:
- 1-800-Flowers.com Inc.'s second quarter revenue declined by 5.7%, showing year-over-year improvement but not meeting anticipated growth.
- The decline was primarily due to softer than anticipated consumer demand and reductions in corporate gifting orders during the holiday season.

Impact of New Order Management System Implementation:
- The new Harry & David order management system (OMS) implementation caused challenges, estimated to reduce Q2 e-commerce revenue by approximately $20 million.
- These issues, which escalated during the holiday season, resulted in order cancellations and additional expenses for customer care.

Gross Margin and Promotional Environment:
- The second quarter gross margin was 43.3%, flat with the prior year, despite increased promotional activity.
- The highly promotional environment and incremental costs associated with OMS implementation challenges, including expedited shipping fees, affected gross margin by approximately 20 basis points.

Operational Efficiencies and Cost Management:
- The company's adjusted operating expenses declined by $2.9 million to $239 million, benefiting from Work Smarter initiatives.
- This decline was despite the incremental costs associated with the OMS challenges impacting Q2 EBITDA by approximately $4.8 million.