1-800-FLOWERS.COM Inc

Iltem 1A.

 Risk Factors

Cautionary Statements Under the Private Securities Litigation Reform Act of 1995

Our disclosures and analysis in this Form 10-K contain some forward-looking statements that set forth anticipated results based on managements plans and assumptions. From time to time, we also provide forward-looking statements in other statements we release to the public as well as oral forward-looking statements. Such statements give our current expectations or forecasts ofconcerning future events; they do not relate strictly to historical or current facts. We have tried, wherever possible, to Such statements can generally be identify such statementsied by using words such as anticipate, estimate, expect, project, intend, plan, believe and , foresee, forecast, likely, should, will, target, or similar expressions in connection with awords or phrases. These forward-looking statements are subject to risks, uncertainties, and other factors, many discussion of future operating or financial performance. In particular, theseof which are outside of our control, which could cause actual results to differ materially from the results expressed or implied in the forward-looking statements, include ing, but not limited to, statements relating to future actions; the effectiveness ofour ability to leverage our markeoperating programs; the performance oflatform and reduce our operating expense ratio; our existing productability to successfully integrate acquired businesses and serviassets; our ability to successfully execute our strategic priorities; our ability to attractcost effectively acquire and retain customers and expand our customer base; our ability to enter into or renew online marketdrive purchase frequency; the outcome of contingencies, including legal proceeding agreements in the normal course of business; our ability to respond tocompete against existing and new competitive pressures;ors; our ability to manage expenses, including shipping costs and the costs of associated with sales and marketing our currentand necessary general and future products administrative and services; thetechnology investments; outcome of contingencies, including legalr ability to reduce promotional activities and achieve more efficient marketing proceedings in the normgrams; and general course of business;nsumer sentiment and industry and our ability to integrate acquisitioneconomic conditions that may affect levels of discretionary customer purchases of our products.

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 risk, uncertainties and potentially inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. You should bear this in mind as you 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 10-Q and 8-K reports to the United States Securities and Exchange Commission (SEC). Also note we provide the following cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to our business. These are factors that, individually or in the aggregate, we think could cause our actual results to differ materially from expected and historical results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995.

Macroeconomic Conditions and Related Risk Factors

The financial and credit markets and consumer sentiment have and will experience significant volatility, which may have an adverse effect on our customers spending patterns and in turn our business, financial condition and results of operations. The Companys business and operating results are subject to economic conditions and their impact on consumer discretionary spending. Factors that may negatively impact consumer spending include high levels of unemployment, higher consumer debt levels, reductions in net worth, reductions in disposable income levels, declines in asset values, and related market uncertainty; home foreclosures and reductions in home values; fluctuating interest rates and credit availability; fluctuating fuel and other energy costs; fluctuating commodity prices; and general uncertainty regarding the overall future political and economic environment. Consumer spending patterns are difficult to predict and are sensitive to the general economic climate, the consumers level of disposable income, consumer debt, and overall consumer confidence. In the recent past, such factors have impacted and may continue to impact our business in a number of ways. Included among these current and potential future negative impacts are reduced demand and lower prices for our products and services. Adverse economic changes could reduce consumer confidence and could thereby affect our operating results. In challenging and uncertain economic environments, including the aftermath of the COVID-19 pandemic, and thecurrent geopolitical climate, we cannot predict when macroeconomic conditions uncertainty may arise and whether such circumstances could impact the Company.

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We impact of the COVID-19 paare dependemic has created significant uncertainty nt on international vendors for our business, financial condition and results of operationsupply of flowers, as well as certain components and for the prices of our publicly traded securities. The extent of the continuing impact of products, exposing us to significant regulatory, global economic, taxation, political instability and othe COVID-19 pandemic on our business andr risks, which could adversely impact our financial results will depend on numerous evolving factor.

The availability and price of flowers, as well as certain components and products that we are not ablerely on to accuratelymanufacture and sell our predict and which will vary oducts could be adversely affected by market,a number of factors affecting including global economic conditions after the pternational locations, including:

import duties andemic, governmental action quotas, such as the tariffs that have been taken, or may be taken in the fuwere imposed on flowers imported from Colombia during fiscal 2025;

agriculture, in al limitations and resptrictionse to thmanage pandemic,ests and disease;

changes in consumer behavior following the ptrading status;

economic uncertainties andemic.

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A currency flthough our business experienced positive growth in our revenues and cuuctuations;

severe weather;

work stomer file during much of the COVID-19 pandemic, when many cppages;

foreign government regulationsumers shifted to online shopping, most p and political unrest; andemic-era

trade restrictions have s, ince been lifluding United, and it is difficult to States retaliation against foreign trade predict what lasting effects the pandemic and resulting macroeconomic patterns will have on consumer spending patactices.

The U.S. has recently instituted or proposed changes in trade policies that include the negotiation or terns and e-commerce generally. We may fail to achieve our previous rate of growth or be unsuccessful in maintaining some or all of mination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and othe new customers we acquired durir government regulations affecting the pandemic, which could reduce demrade between the U.S. and for our proother countries where we conducts business. Anys a reduced demsult, there have been, and for our products or change in customers' purchasingmay continue to be, greater restrictions and econsumptiomic disincentives on pattinterns, as well as continued eational trade, and conomicsiderable uncertainty, can adversely affect our customers and business partners financ about future U.S trade policies. These developments have the potential condition, resulting in an inability to pay forto adversely impact the U.S. economy, our products, reduced or canceled orders of oindustry and the demand for our products, clos. While we are managing of floristhe impact or franchise locf recent trade policy changes by evaluations, stores, or our business partners ng sourcing opportunities outside of Chinability to supply us, working with ingredientexisting vendors or other items necessary for us to make, manufacture, distribute or selln concessions, changing componentry, modifying our assortment, and adjusting our products. Such adverse changes in our customers oicing, it has been and may continue to be time-consuming and expensive for us to alter our business partners financialoperations in order to adapt to or condition may alsomply with shifting trade policies. As a result in our recording, such charnges for our inability to recocould have a material adver or collese effect any accounts receivable, owned or leased assets, or prepaid expenseon our business, financial condition and results of operations.

Increased shipping costs and supply chain disruptions may adversely affect sales of the Companys products. Many of the Company's products are delivered to customers either directly from the manufacturer or from the Companys fulfillment centers. The Company has established relationships with Federal Express and other common carriers for the delivery of these products. If these carriers continue to inincrease the prices they charge to ship the Companys goods, and if the Company is forced to pass these costs on to its customers, or if carrier capacity becomes constrained, due to strikes or otherwise, the Companys sales could be negatively impacted. In addition, ocean container availability and cost, as well as port and shipping route disruptions could impact the Companys ability to deliver products on a timely basis to our customers and adversely affect its customer relationships, revenues and earnings.

We are dependent on international vendors for our supply of flowers, as well as certain components and products, exposing us to significant regulatory, global economic, taxation, political instability and other risks, which could adversely impact our financial results.

The availability and price of flowers, as well as certain components and products that we rely on to manufacture and sell our products could be adversely affected by a number of factors affecting international locations, including:

The U.S. administration has instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S. and other countries where we conduct business. As a result, there may be greater restrictions and economic disincentives on international trade and such changes have the potential to adversely impact the U.S. economy, our industry and the demand for our products. In addition, it may be time-consuming and expensive for us to alter our business operations in order to adapt to or comply with any such changes, and as a result, such changes could have a material adverse effect on our business, financial condition and results of operations.

If the supply of flowers for sale becomes limited, the price of flowers could rise or flowers may be unavailable and the Companys revenues and gross margins could decline. A variety of factors affect the supply of flowers in the United States and the price of the Companys floral products. If the supply of flowers available for sale is limited due to weather conditions, farm closures, economic conditions, political conditions in supplier locations, or other factors, prices for flowers could rise and as a result customer demand for the Companys floral products may be reduced, causing revenues and gross margins to decline. Alternatively, the Company may not be able to obtain high quality flowers in an amount sufficient to meet customer demand. Even if available, flowers from alternative sources may be of lesser quality and/or may be more expensive than those currently offered by the Company.

Most of the flowers sold in the United States are grown by farmers located abroad, primarily in Colombia, Ecuador and Holland, and the Company expects that this will continue in the future.

The Company's operating results may suffer due to economic, political and social unrest or disturbances. Like other American businesses, the Company is unable to predict what long-term effect acts of terrorism, war, or similar unforeseen events may have on its business. The Companys results of operations and financial condition could be adversely impacted if such events cause an economic slowdown in the United States, negatively impact the supply chain, increase the cost of key components for our gifts, or have other negative effects that cannot now be anticipated.

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Business and Operational Risk Factors

The Companys operating results may fluctuate, and this fluctuation could cause financial results to be below expectations. The Companys operating results may fluctuate from period to period for a number of reasons. In budgeting the Companys operating expenses for the foreseeable future, the Company makes assumptions regarding revenue trends; however, some of the Companys operating expenses are fixed in the short term. Sales of the Companys products are seasonal, concentrated in the fourth calendar quarter, due to the Thanksgiving and Christmas-time holidays, and the second calendar quarter, due to Mothers Day and Administrative Professionals Week. In anticipation of increased sales activity during these periods, the Company hires a significant number of temporary employees to supplement its permanent staff and the Company increases its inventory levels. If revenues during these periods do not meet the Companys expectations, it may not generate sufficient revenue to offset these increased costs and its operating results may suffer.

The Companys quarterly operating results may significantly fluctuate and you should not rely on them as an indication of its future results. The Companys future revenues and results of operations may significantly fluctuate due to a combination of factors, many of which are outside of managements control. The most important of these factors include:

seasonality;

the retail economy;

the timing and effectiveness of marketing programs;

the timing of the introduction of new products and services;

the Companys ability to find and maintain reliable sources for certain of its products;

the impact of severe weather, natural disasters, or public health conditions such as pandemics, on consumer demand;

the timing and effectiveness of capital expenditures;

the Companys ability to enter into or renew online marketing agreements; and

competition.

The Company may be unable to reduce operating expenses quickly enough to offset any unexpected revenue shortfall. If the Company has a shortfall in revenue without a corresponding reduction to its expenses, operating results may suffer. The Companys operating results for any particular quarter may not be indicative of future operating results. You should not rely on quarter-to-quarter comparisons of results of operations as an indication of the Companys future performance. It is possible that results of operations may be below the expectations of public market analysts and investors, which could cause the trading price of the Companys Class A common stock to fall.

During peak periods, the Company utilizes temporary employees and outsourced staff, who may not be as well-trained or committed to its customers as its permanent employees, and if they fail to provide the Companys customers with high quality customer service the customers may not return, which could have a material adverse effect on the Companys business, financial condition, results of operations and cash flows. The Company depends on its customer service department to respond to its customers should they have questions or problems with their orders. During peak periods, the Company relies on its permanent employees, as well as temporary employees and outsourced staff to respond to customer inquiries. These temporary employees and outsourced staff may not have the same level of commitment to the Companys customers or be as well trained as its permanent employees. If the Companys customers are dissatisfied with the quality of the customer service they receive, they may not shop with the Company again, which could have a material adverse effect on its business, financial condition, results of operations and cash flows.

If the Company fails to develop and maintain its brands, it may not increase or maintain its customer base or its revenues. The Company must continue to develop and maintain the 1-800-FLOWERS.COMits brands to expand its customer base and its revenues. In addition, the Company has introduced and acquired other brands in the past, and may continue to do so in the future. The Company believes that the importance of brand recognition will increase as it expands its product offerings. Many of the Companys customers may not be aware of the Companys non-floral products. If the Company fails to advertise and market its products effectively, it may not succeed in establishing its brands and may lose customers leading to a reduction of revenues.

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The Companys success in promoting and enhancing the 1-800-FLOWERS.COM brands will also depend on its success in providing its customers high-quality products and a high level of customer service. If the Companys customers do not perceive its products and services to be of high quality, the value of the 1-800-FLOWERS.COM brands would be diminished and the Company may lose customers and its revenues may decline.

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Mailure to establish and maintain strategic online and social media relationshipsrketing programs that generate a significant amount of traffic coumay be less effective or less cost-efficient than in previous periods, which could limit the volume and growth of the Companys business. Although the Company expects a significant portion of its online customers will continue to come directly to its website and, mobile applications, and telephone call center, it will also rely on thmarketing arrangements with third party websites, search engines and af, display advertising providers, social media platforms, and affiliates with which the Company has strategic relationships for traffic. If these third- parties do not attract a significant number of visitors, the Company may not receive a significant number of online customers from these relationships and its revenues from these relationships may decrease or remain flat. There continues to be strong competition to establish or maintain relationships with leading Internet companies, and the Company may not successfully enter into additional relationships or renew existing ones beyond their current terms. The Company may also be required to pay significant fees to maintain and expand existing relationships. The Companys online revenues may suffer if it does not enter into new strategic online and social media relationships or maintain such existing relationships or if these relationships do not result in traffic sufficient to justify their costs. In addition, current or future legislation or changes to third parties policies may limit the Companys ability to effectively reach consumers whose behavior suggests that they might be interested in Company products and may increase. Vendors of advertising and analytics products and services have modified and may continue to modify their products and services in ways theat cost uld reduce the efficiency of suchour marketing efforts. The Companys online revenues may suffer if it does not enter , such as changes to cookie settings and policies, modifications of organic search and paid listing algorithms, the addition of AI summaries to online search engine results, and the intoroduction of new reAI assistant plationships oforms. While we strive to adjust our maintain existing relationships or if therketing strategies in response to these changes, there can be no guarantee that any adjustments will be effective. Any reduction in our ability to make effective use relationships do not result in traffic sufficient to justify theirof advertising technologies could harm our ability to personalize the experience of prospective customers, increase our costs, and limit our ability to attract and retain customers on cost-effective terms. As a result, our business and results of operations costs.uld be adversely affected.

If local florists and other third-party vendors do not fulfill orders to the Companys customers satisfaction, customers may not shop with the Company again. In many cases, floral orders placed by the Companys customers are fulfilled by local independent florists, a majority of which are members of BloomNet. The Company does not directly control any of these florists. In addition, many of the non-floral products sold by the Company are manufactured and delivered to its customers by independent third-party vendors. If customers are dissatisfied with the performance of the local florist or other third-party vendors, they may not utilize the Companys services when placing future orders and its revenues may decrease.

If a florist discontinues its relationship with the Company, the Companys customers may experience delays in service or declines in quality and may not shop with the Company again. Many of the Companys arrangements with local florists for order fulfillment may be terminated by either party with 10 days notice. If a florist discontinues its relationship with the Company, the Company will be required to obtain a suitable replacement located in the same geographic area, which may cause delays in delivery or a decline in quality, leading to customer dissatisfaction and loss of customers.

If a significant number of customers are not satisfied with their purchase, the Company will be required to incur substantial costs to issue refunds, credits or replacement products. The Company offers its customers a 100% satisfaction guarantee on its products. If customers are not satisfied with the products they receive, the Company will either replace the product for the customer or issue the customer a refund or credit. The Companys net income would decrease if a significant number of customers request replacement products, refunds or credits and the Company is unable to pass such costs onto the supplier.

Competition in the floral, plant, gift basket, gourmet food, and specialty gift industries is intense and a failure to respond to competitive pressure could result in lost revenues. There are many companies that offer products in these categories.

In the floral category, the Companys competitors include:

retail floral shops, some of which maintain toll-free telephone numbers, websites, and mobile applications;

online marketplaces, floral retailers, and social media platform retailers, as well as retailers offering substitute gift products;

catalog companies that offer floral products;

floral telemarketers and wire services; and

supermarkets, mass merchants and specialty gift retailers with floral departments.

Similarly, the plant, gift basket, gourmet food, cookie, candy, fruit and specialty gift categories are each highly competitive. Each of these categories encompasses a wide range of products and is highly fragmented. Products in these categories may be purchased from a number of outlets, including mass merchants, retail shops, online retailers and mail-order catalogs.

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Competition is intense and the Company expects it to increase. Increased competition could result in:

price reductions, decreased revenue and lower profit margins;

loss of market share; and

increased marketing expenditures.

These and other competitive factors could materially and adversely affect the Companys results of operations.

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If the Company does not accurately predict customer demand for its products, it may lose customers or experience increased costs. If the Company overestimates customer demand for its products, excess inventory and outdated merchandise could accumulate, tying up working capital and potentially resulting in reduced warehouse capacity and inventory losses due to damage, theft and obsolescence. If the Company underestimates customer demand, it may disappoint customers who may turn to its competitors. Moreover, the strength of the 1-800-FLOWERS.COMour brands could be diminished due to misjudgments in merchandise selection.

Extreme weather conditions and, natural disasters, and public health conditions such as pandemics, and other catastrophic events, may interrupt our business, or our suppliers businesses. Some of our facilities and our suppliers facilities are located in areas that may be subject to extreme, and occasionally prolonged, weather conditions, including hurricanes, tornadoes, and wildfires. Extreme weather conditions, whether caused by global climate change or otherwise, may interrupt our operations in such areas, ne. In addition, public health conditions or other such unforeseen events could affect our and our suppliers' operations. Any such events would negatively impacting various functions, such as production, distribution, and order fulfillment. Furthermore, extreme weather conditions may interrupt our suppliers production or shipments, or increase our suppliers product costs, all of which could have an adverse effect on our business, financial condition, and results of operations.

Various diseases, pests and certain weather conditions can affect fruit production. Various diseases, pests, fungi, viruses, drought, frosts, hail, wildfires, floods and certain other weather conditions could affect the quality and quantity of our fruit production in our Harry David orchards, decreasing the supply of our products and negatively impacting profitability. Our producing orchards also require adequate water supplies. A substantial reduction in water supplies could result in material losses of crops, which could lead to a shortage of our product supply.

The ripening of our fruits is subject to seasonal fluctuations that could negatively impact profitability. The ripening of our fruits in the Harry David orchards can happen earlier than predicted due to warmer temperatures during the year. This would result in an oversupply of fruits that we might not be able to sell on a timely basis and could result in significant inventory write-offs. The ripening of the Companys fruits can also happen later than predicted due to colder temperatures during the year. This can cause a delay in product shipments and not being able to timely meet customer demand during the critical holiday season. Both of these scenarios could adversely affect our business, financial condition and results of operations.

If the Company is unable to hire and retain qualified employees, including key personnel, its business may suffer. The Companys success is dependent on its ability to hire, retain and motivate highly qualified personnel. Given the competitive labor market, we cannot be assured that we can continue to hire, train and retain a sufficient number of qualified employees at current wage rates. In particular, the Companys success depends on the continued efforts of its Chief Executive Officer, James F. McCann, as well as its se senior management team, which help manage its business. The loss of the services of any of the Companys executive management or key personnel or its inability to attract qualified additional personnel could cause its business to suffer and force it to expend time and resources in locating and training additional personnel.

A failure to integrate our acquisitions may cause the results of the acquired company, as well as the results of the Company to suffer. The Company has opportunistically acquired a number of companies over the past several years. Additionally, the Company may look to acquire additional companies in the future. As part of the acquisition process, the Company embarks upon a project management effort to integrate the acquisition onto our information technology systems and management processes. Due diligence undertaken with any acquisition may not reveal all potential problems or inefficiencies involved in integrating the acquired entity into the Company. If we are unsuccessful in integrating our acquisitions, the results of our acquisitions may suffer, management may have to divert valuable resources to oversee and manage the acquisitions, the Company may have to expend additional investments in the acquired company to upgrade personnel and/or information technology systems and the results of the Company may suffer.

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A failure to dispose of assets or businesses in a timely manner may cause the results of the Company to suffer. The Company continues to evaluate the potential disposition of assets and businesses that may no longer help meet its objectives. When the Company decides to sell assets or a business, it may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, which could delay the accomplishment of its strategic objectives. Alternatively, the Company may dispose of a business at a price or on terms that are less than it had anticipated. After reaching an agreement with a buyer or seller for the disposition of a business, the Company is subject to satisfaction of pre-closing conditions, which may prevent the Company from completing the transaction. Dispositions may also involve continued financial involvement in the divested business, such as through continuing equity ownership, guarantees, indemnities or other financial obligations. Under these arrangements, performance by the divested businesses or other conditions outside the Companys control could affect its future financial results.

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The terms of our existing credit facilities could limit our operating flexibility. The credit agreement governing our existing credit facilities contains certain financial and certain affirmative and negative covenants requiring us to maintain certain financial ratios and liquidity levels, limiting the ability to, among other things, incur additional indebtedness, make certain investments, make certain restricted payments, incur certain liens or permit them to exist, hold cash deposits in accounts not maintained with lenders under the existing credit facilities or their affiliates, enter into certain types of transactions with affiliates, merge or consolidate with another company, and transfer, sell or otherwise dispose of assets. These terms may affect our ability to obtain future financing and to pursue attractive business opportunities, and our flexibility in planning for, and reacting to, changes in business conditions, which could adversely affect our business, financial condition and results of operations. If we fail to comply with the provisions of our existing credit facilities and if such failure is not cured or waived, it could result in an event of default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due and payable. Any such default would also limit our ability to obtain additional financing, which could have an adverse effect on our cash flow and liquidity.

We have incurred impairment charges for our goodwill and other long-lived tangible and intangible assets, and may incur further impairment charges in the future, which would negatively impact our operating results. We review goodwill and other long-term assets regularly to assess whether indicators of impairment have arisen, the result of which may require that the Company recognize an impairment charge. Impairments have resulted and may result from, among other things, actual or projected decline in performance, adverse changes in interest rates and other market conditions, adverse changes in applicable laws or regulations, and a variety of other factors. We have in the past recorded, and may in the future be required to record, significant charges in our consolidated financial statements during the period in which any impairment of our goodwill or intangible assets is determined. For example, during fiscal 2025, fiscal 2024, and fiscal 2023, we recorded aggregate non-cash impairment charges of $143.8 million, $19.8 million, and $64.6 million, respectively, related to goodwill and certain trademarks to reduce their carrying value to their estimated fair value. If we are required to record additional non-cash impairment charges to our goodwill, other intangibles, and/or long-lived assets, any such non-cash charge could have a material adverse effect on our Consolidated Statements of Operations and Balance Sheets in the reporting period in which we record the charge.

Information Technology and Systems

Failure to protect our website, networks and computer systems against disruption and cyber security threats, or otherwise protect our and our customers confidential information, could damage our relationships with our customers, harm our reputation, expose us to litigation and adversely affect our business. We rely extensively on our computer systems for the successful operation of our business, including corporate email communications to and from employees, customers and retail operations, the design, manufacture and distribution of our finished goods, digital marketing efforts, collection and retention of customer data, employee information, the processing of credit card transactions, online e-commerce activities and our interaction with the public in the social media space. Our systems are subject to damage or interruption from computer viruses, malicious attacks and other security breaches. The possibility of a cyber-attack on any one or all of these systems is always a serious threat and consumer awareness and sensitivity to privacy breaches and cyber security threats is high. If a cybersecurity incident occurs, or there is a public perception that we have suffered a breach, our reputation and brand could be damaged and we could be required to expend significant capital and other resources to alleviate problems.

As part of our business model, we collect, retain, and transmit confidential information over public networks. In addition to our own databases, we use third party service providers to store, process and transmit this information on our behalf. Although we contractually require these service providers to implement and use reasonable security measures, we cannot control third parties and cannot guarantee that a security breach will not occur in the future either at their location or within their systems. We have reasonable and up-to-date security measures in place to protect both our physical facilities and digital systems from attacks. Despite these efforts, we may be vulnerable to targeted or random security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events.

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Given the robust nature of our e-commerce presence and digital strategy, it is imperative that we and our e-commerce partners maintain uninterrupted operation of our: (i) computer hardware, (ii) software systems, (iii) customer marketing databases, and (iv) ability to email ocontact our current and potential customers in various channels.

In addition, our current and potentisystems may increasingly incorporate features involving artificial intelligence ("AI"), which is complex, subject to increasing litigation and regulatory scrutiny, and may have errors or inadequacies that are not easily detectable. In some instances, we may make use of third-party artificial intelligence products and services. These features, products, and services may produce unintentional customers.

or unexpected outputs that are incorrect, infringe intellectual property or other rights, do not match our business goals, do not comply with our internal policies or applicable legal or contractual requirements, or otherwise are inconsistent with our business goals or brand identities. As a result, our implementation of AI features, products and services could subject us to regulatory action, legal liability, and brand or reputational harm.

If our systems are damaged or fail to function properly or reliably, we may incur substantial interruption, repair or replacement costs, experience data loss or theft and impediments to our ability to conduct our operations. Any material disruptions in our e-commerce presence or information technology systems could have a material adverse effect on our business, financial condition and results of operations.

An increase in the number of employees working remotely has amplified certain risks to the Companys business and increased demand on the Companys information technology resources and systems. Following the COVID-19 pandemic,A number of the Company experienced an increase in the number of it's employees working remotely, which has led toresults in increased risks of phishing and other cybersecurity attacks as cybercriminals try to exploit the uncertaintyvulnerabilities surrounding the COVID-19 pandemicremote work, 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 a. Any failure to effectively manage these risks, including to timely identify and appropriately respond to any cyberattacks, may adversely affect the Companys business.

If the Company fails to continuously improve its website (on all relevant platforms, including mobile), including successful deployment of new technology, it may not attract or retain customers and may otherwise experience harm to its business. If potential or existing customers do not find the Companys website (on all relevant platforms, including mobile) a convenient place to shop, the Company may not attract or retain customers and its sales may suffer. To encourage the use of the Companys website, it must continuously improve its accessibility, content and ease of use. If the Company is unable to maintain a compelling web presence, including by successfully responding to new technology trends (such as generative artificial intelligence), competitors' websites may be perceived as easier to use or better able to satisfy customer needs. In addition, our use of generative AI in certain features of our website may present risks and challenges that remain uncertain due to the relative novelty of this technology, and could subject us to competitive harm, regulatory action, legal liability and brand or reputational harm.

The Companys business could be injured by significant credit card, debit card and gift card fraud. Customers typically pay for their on-line or telephone orders with debit or credit cards as well as a portion of their orders using gift cards. The Companys revenues and gross margins could decrease if it experienced significant credit card, debit card and gift card fraud. Failure to adequately detect and avoid fraudulent credit card, debit card and gift card transactions could cause the Company to lose its ability to accept credit cards or debit cards as forms of payment and/or result in charge-backs of the fraudulently charged amounts and/or significantly decrease revenues. Furthermore, widespread credit card, debit card and gift card fraud may lessen the Companys customers willingness to purchase products through the Companys websites or toll-free telephone numbers. For this reason, such failure could have a material adverse effect on the Companys business, financial condition, results of operations and cash flows.

Unexpected system interruptions caused by system failures may result in reduced revenues and harm to the Companys brand. In the past, particularly during peak holiday periods, the Company has experienced significant increases in traffic on its website and in its toll-free customer service centers. The Companys operations are dependent on its ability to maintain its computer and telecommunications systems in effective working order and to protect its systems against damage from fire, natural disaster, power loss, telecommunications failure, security breaches (including breaches of our transaction processing or other systems that could result in the compromise of confidential customer data), or similar events. The Companys systems have in the past, and may in the future, experience:

system interruptions;

long response times; and

degradation in service.

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In addition, the Company periodically updates or replaces legacy systems with successor systems. If the mplementation of new systems in prior periods has resulted in business disruptions and associated costs, as previously disclosed. If the Company fails to timely and successfully effect any suchfuture system updates, the Companys order management, fulfillment, or other business processes could experience interruptions, and our results of operations could be negatively affected.

The Companys business depends on customers making purchases on its systems. Its revenues may decrease and its reputation could be harmed if it experiences frequent or long system delays or interruptions or if a disruption occurs during a peak holiday season.

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If the Companys telecommunications providers do not adequately maintain the Companys service, the Company may experience system failures and its revenues may decrease. The Company is dependent on telecommunication providers to provide telephone services tand connectivity to its customer service centers and connectivity with its data centers. Although the Company maintains redundant telecommunications systems, if these providers experience system failures or fail to adequately maintain the Companys systems, the Company may experience interruptions and will be unable to generate revenue. The Company depends upon these third-party relationships because it does not have the resources to maintain its service without these or other third parties. Failure to maintain these relationships or replace them on financially attractive terms may disrupt the Companys operations or require it to incur significant unanticipated costs.

Legal, Regulatory, Tax and Other Risks

Unauthorized use of the Companys intellectual property by third parties may damage its brands. Unauthorized use of the Companys intellectual property by third parties may damage its brands and its reputation and may likely result in a loss of customers. It may be possible for third parties to obtain and use the Companys intellectual property without authorization. Third parties have in the past infringed or misappropriated the Companys intellectual property or similar proprietary rights. The Company believes infringements and misappropriations will continue to occur in the future. Furthermore, the validity, enforceability and scope of protection of intellectual property in Internet-related industries is uncertain and still evolving. The Company has been unable to register certain of its intellectual property in some foreign countries and furthermore, the laws of some foreign countries are uncertain or do not protect intellectual property rights to the same extent as do the laws of the United States. The protection of the Company's intellectual property may require significant time and expense, and we may not be successful in our efforts.

The Companys franchisees may damage its brands or increase its costs by failing to comply with its franchise agreements or its operating standards. The Companys franchise business is governed by its Uniform Franchise Disclosure Document, franchise agreements and applicable franchise law. If the Companys franchisees do not comply with its established operating standards or the terms of the franchise agreements, the 1-800-FLOWERS.COM brands may be damaged. The Company may incur significant additional costs, including time-consuming and expensive litigation, to enforce its rights under the franchise agreements. Additionally, the Company is the primary tenant on certain leases, which the franchisees sublease from the Company. If a franchisee fails to meet its obligations as subtenant, the Company could incur significant costs to avoid default under the primary lease. Furthermore, as a franchisor, the Company has obligations to its franchisees. Franchisees may challenge the performance of the Companys obligations under the franchise agreements and subject it to costs in defending these claims and, if the claims are successful, costs in connection with their compliance.

If third parties acquire rights to use similar domain names or phone numbers or if the Company loses the right to use its phone numbers, its brands may be damaged and it may lose sales. The Companys Internet domain names are an important aspect of its brand recognition. The Company cannot practically acquire rights to all domain names similar to www.1800flowers.com, or its other brands, whether under existing top level domains or those issued in the future. If third parties obtain rights to similar domain names, these third parties may confuse the Companys customers and cause its customers to inadvertently place orders with these third parties, which could result in lost sales and could damage its brands.

Likewise, the phone number that spells 1-800-FLOWERS is important to the Companys brand and its business. While the Company has obtained the right to use the phone numbers 1-800-FLOWERS, 1-888-FLOWERS and 1-877-FLOWERS, as well as common toll-free FLOWERS misdials, it may not be able to obtain rights to use the FLOWERS phone number as new toll-free prefixes are issued, or the rights to all similar and potentially confusing numbers. If third parties obtain the phone number that spells FLOWERS" with a different prefix or a toll-free number similar to FLOWERS, these parties may also confuse the Companys customers and cause lost sales and potential damage to its brands. In addition, under applicable FCC rules, ownership rights to phone numbers cannot be acquired. Accordingly, the FCC may rescind the Companys right to use any of its phone numbers, including 1-800-FLOWERS (1-800-356-9377).

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Defending against intellectual property infringement claims could be expensive and, if the Company is not successful, could disrupt its ability to conduct business. The Company has been unable to register certain of its intellectual properties in some foreign countries, including, 1-800-Flowers.com, 1-800-Flowers and 800-Flowers. The Company cannot be certain that the products it sells, or services it offers, do not or will not infringe valid patents, trademarks, copyrights or other intellectual property rights held by third parties. The Company may be a party to legal proceedings and claims relating to the intellectual property of others from time to time in the ordinary course of its business. The Company may incur substantial expense in defending against these third-party infringement claims, regardless of their merit. Successful infringement claims against the Company may result in substantial monetary liability or may materially disrupt its ability to conduct business.

Product liability claims may subject the Company to increased costs. Several of the products the Company sells, including perishable food and alcoholic beverage products, may expose it to product liability claims in the event that the use or consumption of these products results in personal injury or property damage. Although the Company has not experienced any material losses due to product liability claims to date, it may be a party to product liability claims in the future and incur significant costs in their defense. Product liability claims often create negative publicity, which could materially damage the Companys reputation and its brands. Although the Company maintains insurance against product liability claims, its coverage may be inadequate to cover any liabilities it may incur.

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Future litigation could have a material adverse effect on our business and results of operations. Lawsuits and other administrative or legal proceedings that may arise in the course of our operations can involve substantial costs, including the costs associated with investigation, litigation and possible settlement, judgment, penalty or fine. In addition, lawsuits and other legal proceedings may be time consuming and may require a commitment of management and personnel resources that will be diverted from our normal business operations. Although we generally maintain insurance to mitigate certain costs, there can be no assurance that costs associated with lawsuits or other legal proceedings will not exceed the limits of insurance policies. Moreover, we may be unable to continue to maintain our existing insurance at a reasonable cost, if at all, or to secure additional coverage, which may result in costs associated with lawsuits and other legal proceedings being uninsured. Our business, financial condition, and results of operations could be adversely affected if a judgment, penalty or fine is not fully covered by insurance.

A privacy or data security breach could expose us to costly government enforcement actions and private litigation and adversely affect our business. An important component of our business involves the receipt, processing, transmittal, and storage of personal and confidential information about our customers. We have programs in place to detect, contain and respond to data security incidents. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures. In addition, hardware, software, or applications we develop or procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deceiving our team members, contractors, vendors, and temporary staff. In addition, security breaches can also occur as a result of intentional or inadvertent breaches by our employees or by persons with whom we have commercial relationships. Any actual or suspected security breach or other compromise of our security measures or those of our third party vendors, whether as a result of banking efforts, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering or otherwise, could harm our reputation and business, damage our brand and make it harder to retain existing customers or acquire new ones, require us to expend significant capital and other resources to address the breach, and result in a violation of applicable laws, regulations or other legal obligations. Moreover, any insurance coverage we may carry may be inadequate to cover the expenses and other potential financial exposure we could face as a result of a privacy or data breach.

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Our business is subject to government regulation in various areas, and the increasing costs of compliance efforts, as well as any potential non-compliance, could adversely impact our business. We are subject to laws and regulations affecting our operations in a number of areas, including consumer protection, labor and employment, data privacy, product safety, and environmental. Compliance with these and similar laws and regulations may require significant effort and expense, and variances and inconsistencies in requirements among jurisdictions may exacerbate this.  effort and expense. Because the Companys products and services are available over the Internet anywhere in the world, multiple jurisdictions may claim that the Company is required to do business as a foreign corporation in one or more of those jurisdictions. Failure to qualify as a foreign corporation in a jurisdiction where the Company is required to do so could subject it to taxes and penalties. States or foreign governments may charge the Company with violations of local laws. The time and expense of compliance with existing and future regulations could, in the aggregate, adversely affect our results of operations, limit our product and service offerings in one or more regions, constrain our marketing efforts, or otherwise cause us to change or limit our business practices.

We have implemented policies and procedures designed to ensure compliance with applicable laws and regulations, but there can be no assurance that our customers, employees, contractors, vendors, franchisees, or agents will not violate such laws and regulations or our policies and procedures. If we are held responsible for any such violations, we could incur substantial aggregate expense from monetary penalties, resolution of customer claims, higher insurance premiums, and the time and expense of addressing any such violation, which could be material to us. Additionally, we could experience reputational harm as a result of any such violations.

Failure to comply with federal, state and international laws and regulations relating to privacy, data protection and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, could adversely affect our business and our financial condition.

A variety of federal, state and international laws and regulations govern the collection, use, retention, sharing, export and security of personal information.  These include laws and regulations that are intended to protect the privacy of children online, including the Childrens Online Privacy Protection Act, a U.S. federal law that requires websites and online services to obtain parental consent before collecting personal information from children under 13, as well as regulations adopted by the Federal Trade Commission, and a growing array of state laws. We also may choose to comply with, or may be required to comply with, self-regulatory obligations or other industry standards. Laws and regulations relating to privacy, data protection and consumer protection are evolving and subject to potentially differing interpretations, and laws providing for new privacy and security rights and requirements may  overlap with each other, and may be enacted or come into effect in different jurisdictions. These requirements may be enacted, interpreted or applied in a manner that is inconsistent from one jurisdiction to another or in a manner that conflicts with other rules or our practices. As a result, o some of our practices may notbe in complynflict, or may not comply in the future with all such levolving laws, regulations, requirements and obligations. Any failure, or perceived failure, by us to comply with any federal, state or international privacy or consumer protection-related laws, regulations, regulatory guidance, orders to which we may be subject or other legal obligations relating to privacy or consumer protection could adversely affect our reputation, brand and business, and may result in claims, proceedings or actions against us by governmental entities or others, including claims for statutory damages asserted on behalf of purported classes of affected persons or other liabilities or require us to change our business practices, including changing, limiting or ceasing altogether the collection, use, sharing, or transfer of data relating to customers, which could materially adversely affect our business, financial condition and operating results.

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Many governmental regulations may impact the Internet, which could affect the Companys ability to conduct business. Any new law or regulation, or the application or interpretation of existing laws, may adversely impact the growth in the use of the Internet or the Companys websites. The Company expects there will be an increasing number of laws and regulations pertaining to the Internet in the United States and throughout the world. These laws or regulations may relate to liability for information received from or transmitted over the Internet, online content regulation, user privacy, tage-appropriate design, taxation and quality of products and services sold over the Internet. Moreover, the applicability to the Internet of existing laws governing intellectual property ownership and infringement, copyright, trademark, trade secret, obscenity, libel, employment, personal privacy and other issues is uncertain and developing. This could decrease the demand for the Companys products, increase its costs or otherwise adversely affect its business.

Regulations imposed by the Federal Trade Commission may adversely affect the growth of the Companys Internet business or its marketing efforts. The Federal Trade Commission has proposed regulations regarding the collection and use of personal identifying information obtained from individuals when accessing websites, with particular emphasis on access by minors. These regulations may include requirements that the Company establish procedures to disclose and notify users of privacy and security policies, obtain consent from users for collection and use of information and provide users with the ability to access, correct and delete personal information stored by the Company. These regulations may also include enforcement and redress provisions. Moreover, even in the absence of those regulations, the Federal Trade Commission has begun investigations into the privacy practices of other companies that collect information on the Internet. One investigation resulted in a consent decree under which an Internet company agreed to establish programs to implement the principles noted above. The Company may become a party to a similar investigation, or the Federal Trade Commissions regulatory and enforcement efforts, or those of other governmental bodies, which may adversely affect its ability to collect demographic and personal information from users, and could adversely affect its marketing efforts.

Our business is subOur business is subject to evolving corporate governance and public disclosure regulations and expectations. We are subject to evolving rules and regulations promulgated by a number of federal, state, and local governmental and self-regulatory organizations, including the United States Securities and Exchange Commission (SEC), the Nasdaq Stock Exchange and the Financial Accounting Standards Board. These rules and regulations continue to increase in scope and complexity, making compliance more difficult, expensive and uncertain. In addition, public companies are encountering increased scrutiny on ESG matters and related disclosures. These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations. For example, developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards. We could be criticized, fined or suffer other adverse consequences based on the inaccuracy, inadequacy or incompleteness of our reporting. If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we otherwise fail to comply with ESG-related regulations, our reputation, business, financial performance and growth could be adversely affected.

The price at which the Companys Class A common stock will trade may be highly volatile and may fluctuate substantially. The stock market has from time to time experienced price and volume fluctuations that have affected the market prices of securities, particularly securities of companies with Internet operations. As a result, investors may experience a material decline in the market price of the Companys Class A common stock, regardless of the Companys operating performance. In the past, following periods of volatility in the market price of a particular companys securities, securities class action litigation has often been brought against that company. The Company may become involved in this type of litigation in the future. Litigation of this type is often expensive and diverts managements attention and resources and could have a material adverse effect on the Companys business and its results of operations.

Additional Information

The Companys internet address is www.1800flowers.com. We make available, through the investor relations tab located on our website at www.1800flowersinc.com, access to our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. All such filings on our investor relations website are available free of charge. (The information posted on the Companys website is not incorporated into this Annual Report on Form 10-K.)

A copy of this Annual Report on Form 10-K is available without charge upon written request to: Investor Relations, 1-800-FLOWERS.COM, Inc., Two Jericho Plaza, Suite 200, Jericho, NY 11753. In addition, the SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.