10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended April 2, 2017

or

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

For the transition period from ___ to ___

Commission File No. 0-26841

1-800-FLOWERS.COM, Inc.

(Exact name of registrant as specified in its charter)

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

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

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

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

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

☐ Large accelerated filer	☑ Accelerated filer
☐ Non-accelerated filer (Do not check if a smaller reporting company)	☐ Smaller reporting company
	☐ Emerging growth company

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐  No ☑

The number of shares outstanding of each of the Registrant’s classes of common stock as of May 4, 2017:

Class A common stock: 35,352,095

Class B common stock: 29,983,004

TABLE OF CONTENTS

		Page
Part I.	Financial Information
Item 1.	Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets – April 2, 2017 (Unaudited) and July 3, 2016	1
	Condensed Consolidated Statements of Income (Unaudited) – Three and Nine Months Ended April 2, 2017 and March 27, 2016	2
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) – Three and Nine Months Ended April 2, 2017 and March 27, 2016	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) – Nine Months Ended April 2, 2017 and March 27, 2016	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
Part II.	Other Information
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
Signatures		29

PART I. – FINANCIAL INFORMATION

ITEM 1. – CONSOLIDATED FINANCIAL STATEMENTS

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

Condensed Consolidated Balance Sheets

(in thousands)

	April 2, 2017		July 3, 2016
		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	56,765	$	27,826
Trade receivables, net		21,549		19,123
Inventories		63,713		103,328
Prepaid and other		17,388		16,382
Assets held for sale		91,822		-
Total current assets		251,237		166,659
Property, plant and equipment, net		154,668		171,362
Goodwill		62,767		77,667
Other intangibles, net		61,441		79,000
Other assets		9,685		8,253
Total assets	$	539,798	$	502,941
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	19,457	$	35,201
Accrued expenses		87,921		66,066
Current maturities of long-term debt		6,469		19,594
Liabilities held for sale		4,428		-
Total current liabilities		118,275		120,861
Long-term debt		103,300		94,396
Deferred tax liabilities		33,628		35,517
Other liabilities		9,225		9,581
Total liabilities		264,428		260,355
Total stockholders' equity		275,370		242,586
Total liabilities and stockholders' equity	$	539,798	$	502,941

See accompanying Notes to Condensed Consolidated Financial Statements.

1

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

Condensed Consolidated Statements of Income

(in thousands, except for per share data)

(unaudited)

	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017			March 27, 2016
Net revenues	$	233,715		$	234,207		$	954,097		$	938,629
Cost of revenues		140,134			137,486			532,135			521,816
Gross profit		93,581			96,721			421,962			416,813
Operating expenses:
Marketing and sales		70,158			71,502			245,112			243,567
Technology and development		10,254			9,903			29,591			29,059
General and administrative		20,962			21,006			64,446			61,032
Depreciation and amortization		8,492			7,546			25,656			24,279
Total operating expenses		109,866			109,957			364,805			357,937
Operating income (loss)		(16,285	)		(13,236	)		57,157			58,876
Interest expense, net		1,191			1,239			4,796			5,292
Other (income) expense, net		(421	)		145			(570	)		(15,151	)
Income (loss) before income taxes		(17,055	)		(14,620	)		52,931			68,735
Income tax expense (benefit)		(5,925	)		(5,494	)		16,903			21,813
Net income (loss)		(11,130	)		(9,126	)		36,028			46,922
Less: Net loss attributable to noncontrolling interest		-			-			-			(1,007	)
Net income (loss) attributable to 1-800-FLOWERS.COM, Inc.	$	(11,130	)	$	(9,126	)	$	36,028		$	47,929
Basic net income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc.	$	(0.17	)	$	(0.14	)	$	0.55		$	0.74
Diluted net income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc.	$	(0.17	)	$	(0.14	)	$	0.53		$	0.71
Weighted average shares used in the calculation of net income (loss) per common share:
Basic		65,199			64,687			65,169			64,724
Diluted		65,199			64,687			67,747			67,053

See accompanying Notes to Condensed Consolidated Financial Statements.

2

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

Condensed Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017			March 27, 2016
Net income (loss)	$	(11,130	)	$	(9,126	)	$	36,028		$	46,922
Other comprehensive income/(loss) (currency translation)		(100	)		(6	)		(19	)		231
Comprehensive income (loss)		(11,230	)		(9,132	)		36,009			47,153
Less:
Net loss attributable to noncontrolling interest		-			-			-			(1,007	)
Other comprehensive income (loss) (currency translation) attributable to noncontrolling interest		-			-			-			87
Comprehensive net loss attributable to noncontrolling interest		-			-			-			(920	)
Comprehensive income (loss) attributable to 1-800-FLOWERS.COM, Inc.	$	(11,230	)	$	(9,132	)	$	36,009		$	48,073

See accompanying Notes to Condensed Consolidated Financial Statements.

3

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

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Nine months ended
	April 2, 2017			March 27, 2016
Operating activities:
Net income	$	36,028		$	46,922
Reconciliation of net income to net cash provided by operating activities, net of acquisitions:
Depreciation and amortization		25,656			24,279
Amortization of deferred financing costs		1,285			1,209
Deferred income taxes		(1,889	)		(1,793	)
Foreign equity method investment impairment		-			1,728
Loss on sale/impairment of iFlorist		-			2,121
Bad debt expense		935			973
Stock-based compensation		4,784			4,831
Other non-cash items		(227	)		299
Changes in operating items:
Trade receivables		(13,595	)		(15,090	)
Insurance receivable		-			3,053
Inventories		892			(2,488	)
Prepaid and other		(2,030	)		156
Accounts payable and accrued expenses		9,670			10,453
Other assets		(34	)		(47	)
Other liabilities		(267	)		412
Net cash provided by operating activities		61,208			77,018
Investing activities:
Capital expenditures, net of non-cash expenditures		(18,753	)		(20,022	)
Net cash used in investing activities		(18,753	)		(20,022	)
Financing activities:
Acquisition of treasury stock		(8,277	)		(12,958	)
Proceeds from exercise of employee stock options		268			700
Proceeds from bank borrowings		181,000			178,000
Repayment of notes payable and bank borrowings		(185,000	)		(188,980	)
Debt issuance costs		(1,507	)		-
Other		-			(2	)
Net cash used in financing activities		(13,516	)		(23,240	)
Net change in cash and cash equivalents		28,939			33,756
Cash and cash equivalents:
Beginning of period		27,826			27,940
End of period	$	56,765		$	61,696

See accompanying Notes to Condensed Consolidated Financial Statements.

4

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

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1 – Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by 1-800-FLOWERS.COM, Inc. and subsidiaries (the “Company”) in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended April 2, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending July 2, 2017. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended July 3, 2016.

The Company’s quarterly results may experience seasonal fluctuations. Due to the seasonal nature of the Company’s business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company’s second fiscal quarter, is expected to generate nearly 50% of the Company’s annual revenues, and all of its earnings. Additionally, due to the number of major floral gifting occasions, including Mother's Day, Valentine’s Day and Administrative Professionals Week, revenues also rise during the Company’s fiscal third and fourth quarters in comparison to its fiscal first quarter. In fiscal 2016, the Easter Holiday was on March 27th, and as a result, all revenue and EBITDA associated with this holiday was within the Company’s fiscal third quarter. In fiscal 2017, Easter falls on April 16th, which will result in the shift of associated revenue and EBITDA from the Company’s third quarter to its fourth quarter.

Use of Estimates

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

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This amended guidance will enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Expanded disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. This guidance will be effective for the Company’s fiscal year ending June 30, 2019 and may be applied retrospectively. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which amends ASC 835-30, “Interest – Imputation of Interest.” In order to simplify the presentation of debt issuance costs, ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, and not recorded as a separate asset. The Company adopted this standard effective July 4, 2016 and applied it retrospectively to all periods presented. The impact of the adoption of the new guidance was to reclassify $3.6 million of deferred financing costs previously included within “Other Assets” to “Long-term debt” in the consolidated balance sheets as of July 3, 2016.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330).” The pronouncement was issued to simplify the measurement of inventory and changes the measurement from lower of cost or market to lower of cost and net realizable value. ASU 2015-11 is effective for the Company’s fiscal year ending July 1, 2018. The adoption of ASU 2015-11 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations.

In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." The pronouncement requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for the Company's fiscal year ending June 30, 2019. The adoption is not expected to have a significant impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for the Company’s fiscal year ending June 28, 2020. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” ASU No. 2016-09 affects all entities that issue share-based payment awards to their employees. ASU No. 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company has elected to early adopt the amendments in ASU 2016-09, beginning in the second quarter of fiscal year 2017. As a result, stock-based compensation excess tax benefits are reflected in the Consolidated Statements of Income as a component of the provision for income taxes, whereas they were previously recognized in equity. This change resulted in the recognition of excess tax benefits against income tax expenses, rather than additional paid-in capital, of $0.1 million and $0.9 million for the three and nine months ended April 2, 2017. There was no impact on earnings per share since approximately 700,000 tax benefit shares for the nine months ended April 2, 2017, previously associated with the APIC pool calculation, are no longer considered in the diluted share computation. Additionally, our Consolidated Statements of Cash Flows now present excess tax benefits as an operating activity. This change has been applied prospectively in accordance with the ASU and prior periods have not been adjusted.  Further, the Company has elected to account for forfeitures as they occur, rather than estimate expected forfeitures. The cumulative effect of this change, which was recorded as compensation expense in fiscal 2017, was not material to the financial statements. In addition, this ASU allows entities to withhold an amount up to an employees’ maximum individual statutory tax rate in the relevant jurisdiction, up from the minimum statutory requirement, without resulting in liability classification of the award. We adopted this change on a modified retrospective basis, with no impact to our consolidated financial statements. Finally, this ASU clarified that the cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity. This change does not have an impact on the Company’s consolidated financials as it conforms with its current practice.

5

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces a new forward-looking “expected loss” approach, to estimate credit losses on most financial assets and certain other instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. ASU 2016-13 is effective for the Company’s fiscal year ending July 4, 2021, and the guidance is to be applied using the modified-retrospective approach. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01)," which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. ASU 2017-01 is effective for the Company's fiscal year ending June 30, 2019, with early adoption permitted, and should be applied prospectively, We do not expect the standard to have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04)," which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance is effective for the Company’s fiscal year ending July 4, 2021, with early adoption permitted, and should be applied prospectively. We do not expect the standard to have a material impact on our consolidated financial statements.

Reclassifications

Certain balances in the prior fiscal years have been reclassified to conform to the presentation in the current fiscal year. See “Recent Accounting Pronouncements” above regarding the impact of our adoption of ASU No. 2015-03 and ASU No. 2015-17.

Note 2 – Net Income Per Common Share

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

	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017		March 27, 2016
	(in thousands, except per share data, unaudited)
Numerator:
Net income (loss)	$	(11,130	)	$	(9,126	)	$	36,028	$	46,922
Less: Net loss attributable to noncontrolling interest		-			-					(1,007	)
Income attributable to 1-800-FLOWERS.COM, Inc.	$	(11,130	)	$	(9,126	)	$	36,028	$	47,929
Denominator:
Weighted average shares outstanding		65,199			64,687			65,169		64,724
Effect of dilutive securities:
Employee stock options (1)		-			-			1,511		1,428
Employee restricted stock awards		-			-			1,067		901
		-			-			2,578		2,329
Adjusted weighted-average shares and assumed conversions		65,199			64,687			67,747		67,053
Net income per common share attributable to 1-800-FLOWERS.COM, Inc.
Basic	$	(0.17	)	$	(0.14	)	$	0.55	$	0.74
Diluted	$	(0.17	)	$	(0.14	)	$	0.53	$	0.71

Note (1): The effect of options to purchase 0.0 and 0.1 million shares for the three and nine months ended April 2, 2017 and 0.1 million shares for both the three and nine months ended March 27, 2016, respectively, were excluded from the calculation of net income per share on a diluted basis as their effect is anti-dilutive. 

Note (2): As a result of the net loss from continuing operations attributable to 1-800-FLOWERS.COM, Inc. for the three months ended April 2, 2017 and March 27, 2016, there is no dilutive impact to the net loss per share calculation for the respective periods.

6

Note 3 – Stock-Based Compensation

The Company has a Long Term Incentive and Share Award Plan, which is more fully described in Note 12 and Note 13 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 3, 2016, that provides for the grant to eligible employees, consultants and directors of stock options, restricted shares, and other stock-based awards.

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

	Three Months Ended				Nine Months Ended
	April 2, 2017		March 27, 2016		April 2, 2017		March 27, 2016
			(in thousands, unaudited)
Stock options	$	110	$	112	$	337	$	314
Restricted stock		1,176		1,538		4,447		4,517
Total		1,286		1,650		4,784		4,831
Deferred income tax benefit		387		491		1,528		1,533
Stock-based compensation expense, net	$	899	$	1,159	$	3,256	$	3,298

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

	Three Months Ended				Nine Months Ended
	April 2, 2017		March 27, 2016		April 2, 2017		March 27, 2016
			(in thousands, unaudited)
Marketing and sales	$	342	$	586	$	1,384	$	1,781
Technology and development		71		91		267		411
General and administrative		873		973		3,133		2,639
Total	$	1,286	$	1,650	$	4,784	$	4,831

The following table summarizes stock option activity during the nine months ended April 2, 2017 (unaudited):

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (000s)
Outstanding at July 3, 2016		2,182,234		$	2.49
Granted		-		$	-
Exercised		(51,500	)	$	5.20
Forfeited		-		$	-
Outstanding at April 2, 2017		2,130,734		$	2.43		$	16,566
Options vested or expected to vest at April 2, 2017		2,130,734		$	2.43		$	16,566
Exercisable at April 2, 2017		1,471,734		$	2.37		$	11,530

As of April 2, 2017, the total future compensation cost related to non-vested options, not yet recognized in the statement of income, was $1.0 million and the weighted average period over which these awards are expected to be recognized was 2.2 years.

The Company grants shares of Common Stock to its employees that are subject to restrictions on transfer and risk of forfeiture until fulfillment of applicable service and performance conditions and, in certain cases, holding periods (Restricted Stock). The following table summarizes the activity of non-vested restricted stock awards during the nine months ended April 2, 2017 (unaudited):

	Shares			Weighted Average Grant Date Fair Value
Non-vested at July 3, 2016		2,017,069		$	6.78
Granted		814,406		$	9.88
Vested		(885,502	)	$	6.83
Forfeited		(473,494	)	$	9.77
Non-vested at April 2, 2017		1,472,479		$	7.50

The fair value of non-vested shares is determined based on the closing stock price on the grant date. As of April 2, 2017, there was $6.9 million of total unrecognized compensation cost related to non-vested restricted stock-based compensation to be recognized over the weighted-average remaining period of 2.2 years.

7

 Note 4 - Dispositions

Pending disposition of Fannie May

On March 15, 2017, the Company and Ferrero International S.A., a Luxembourg corporation (“Ferrero”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) pursuant to which Ferrero will purchase from the Company all of the outstanding equity of Fannie May Confections Brands, Inc., including its subsidiaries, Fannie May Confections, Inc. and Harry London Candies, Inc. (“Fannie May”) (the “Acquisition”).  The aggregate consideration payable to the Company in exchange for all of the outstanding equity of Fannie May is $115.0 million in cash (subject to adjustment for seasonal working capital). The Purchase Agreement contains customary representations, warranties and covenants by the Company and Ferrero. The closing of the Acquisition is expected to be on May 30, 2017 and is subject to customary closing conditions, including applicable regulatory approvals, covenants to enter into a transition services agreement whereby the Company will provide certain post-closing services to Ferrero and Fannie May related to the business of Fannie May and a commercial agreement with respect to the distribution of certain Ferrero and Fannie May products. 

The Company determined that the Fannie May business (disposal group) met the held for sale criteria, as prescribed by FASB ASC 360-10-45-9, but did not meet the criteria to qualify as a discontinued operation. Further, per ASC 360-10-35-43, a disposal group classified as held for sale is initially measured at the lower of its carrying amount or fair value less cost to sell. The Company compared Fannie May's carrying amount to its fair value less estimated costs to sell, and determined that the disposal group should be measured at its carrying amount as of April 2, 2017.

The assets and liabilities of Fannie May are presented as "Assets held for sale" and "Liabilities held for sale" in the Company's condensed consolidated balance sheets as of April 2, 2017. The following table presents the aggregate carrying amounts of the major classes of assets and liabilities related to the Fannie May business to be disposed of as of April 2, 2017:

	Fannie May - Held for sale assets and liabilities
		(in thousands, unaudited)
Assets:
Trade receivables, net		9,325
Inventories		38,724
Prepaid and other		1,024
Property, plant and equipment, net		11,087
Goodwill (Note 1)		14,900
Other intangibles, net		16,572
Other assets		190
Total assets held for sale	$	91,822
Liabilities:
Accounts payable	$	1,387
Accrued expenses		1,264
Other liabilities		1,777
Total liabilities held for sale	$	4,428

Note (1) - Per FASB ASC 350-20-40, when a portion of reporting unit that constitutes a business is to be disposed of, goodwill associated with that business shall be included in the carrying amount of the business in determining the gain or loss on disposal. The amount of goodwill to be included in that carrying amount shall be based on the relative fair values of the business to be disposed of and the portion of the reporting unit that will be retained. Fannie May represents a business as defined by FASB and is included in the Company's Gourmet Food & Gift Baskets reporting unit. As a result, we allocated goodwill of $14.9 million to the Fannie May business based on the relative fair value of Fannie May to the remaining Gourmet Food & Gift Baskets reporting unit. The Company estimated the fair value of the Gourmet Food & Gift Baskets reporting unit in a manner consistent with its significant accounting policy for goodwill, described in Item 15, Note 1 of the  Company’s annual report on Form 10-K for the fiscal year ended July 3, 2016.                     

Disposition of Colonial Gifts Limited ("iFlorist")

During the quarter ended September 27, 2015, the Company’s management committed to a plan to sell its iFlorist business in order to focus its internal resources and capital on integrating and achieving synergy savings with respect to its acquisition of Harry & David, which was completed on September 30, 2014. As a result, the Company determined that the iFlorist business (disposal group) met the held for sale criteria, as prescribed by FASB ASC 360-10-45-9, as of September 27, 2015. As such, the Company compared iFlorist’s carrying amount ($3.4 million) to its fair value less cost to sell ($1.5 million), and recorded an impairment charge of $1.9 million during the period ended September 27, 2015. The Company recorded this impairment charge within “Other (income) expense, net” in the condensed consolidated statements of operations. During October 2015, the Company completed the sale of substantially all of the assets of iFlorist to Euroflorist AB (“Euroflorist”), a pan-European floral and gifting company headquartered in Malmo, Sweden. As consideration for the assets sold, the Company received an investment in Euroflorist with a fair value on the date of sale of approximately $1.5 million. (The Company will account for this investment using the cost method as it does not possess the ability to exercise significant influence over Euroflorist.) Upon completion of the sale of iFlorist during the quarter ended December 27, 2015, the Company recorded an additional loss on sale of $0.2 million.

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Note 5 – Inventory

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

	April 2, 2017		July 3, 2016
	(in thousands)
Finished goods	$	30,602	$	44,264
Work-in-process		26,800		24,573
Raw materials		6,311		34,491
Total inventory	$	63,713	$	103,328

Inventories to be disposed of as a result of the Fannie May disposition were included in "Assets held for sale" on the condensed consolidated balance sheet as of April 2, 2017, and accordingly, are not included in this table (see Note 4). 

Note 6 – Goodwill and Intangible Assets

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

	1-800-Flowers.com Consumer Floral		BloomNet Wire Service		Gourmet Food & Gift Baskets (1)		Total
	(in thousands)
Balance at July 3, 2016	$	17,441	$	-	$	60,226	$	77,667
Goodwill reclassified to assets held for sale (see Note 4)		-		-		14,900		14,900
Balance at April 2, 2017	$	17,441	$	-	$	45,326	$	62,767

(1) The total carrying amount of goodwill for all periods in the table above is reflected net of $71.1 million of accumulated impairment charges, which were recorded in the Gourmet Food & Gift Baskets segment during fiscal 2009.

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

				April 2, 2017						July 3, 2016
	Amortization Period			Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in years)			(in thousands)
Intangible assets with determinable lives
Investment in licenses	14	-	16	$	7,420	$	5,911	$	1,509	$	7,420	$	5,832	$	1,588
Customer lists	3	-	10		12,184		7,920		4,264		21,144		15,960		5,184
Other	5	-	14		2,946		2,017		929		3,665		2,698		967
Total intangible assets with determinable lives					22,550		15,848		6,702		32,229		24,490		7,739
Trademarks with indefinite lives					54,739		-		54,739		71,261		-		71,261
Total identifiable intangible assets				$	77,289	$	15,848	$	61,441	$	103,490	$	24,490	$	79,000

Trademarks and customer lists to be disposed of as a result of the Fannie May disposition were included in "Assets held for sale" on the condensed consolidated balance sheet as of April 2, 2017, and accordingly, are not included in this table (see Note 4). 

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Future estimated amortization expense is as follows: remainder of fiscal 2017 - $0.4 million, fiscal 2018 - $1.3 million, fiscal 2019 - $0.7 million, fiscal 2020 - $0.6 million, fiscal 2021 - $0.6million and thereafter - $3.1million.

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Note 7 – Investments

The Company has certain investments in non-marketable equity instruments of private companies. The Company accounts for these investments using the equity method if they provide the Company the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method is appropriate. The Company records equity method investments initially at cost, and adjusts the carrying amount to reflect the Company’s share of the earnings or losses of the investee.

The Company’s equity method investment is comprised of a 29.0% interest in Flores Online, a Sao Paulo, Brazil based internet floral and gift retailer, that the Company made on May 31, 2012. The book value of this investment was $1.1 million as of April 2, 2017 and July 3, 2016, and is included in the “Other assets” line item within the Company’s consolidated balance sheets. The Company’s equity in the net loss of Flores Online for the three and nine months ended April 2, 2017 and March 27, 2016 was less than $0.1 million. During the quarter ended September 27, 2015, the Company determined that the fair value of its investment in Flores Online ($1.2 million) was below its carrying value ($2.9 million) and that this decline was other-than-temporary. As a result, the Company recorded an impairment charge of $1.7 million, which is included within the “Other (income) expense, net” line items in the Company’s consolidated statements of operations for the nine-months ended March 27, 2016.

Investments in non-marketable equity instruments of private companies, where the Company does not possess the ability to exercise significant influence, are accounted for under the cost method. Cost method investments are originally recorded at cost, and are included within the “Other assets” line item within the Company’s consolidated balance sheets. The aggregate carrying amount of the Company’s cost method investments was $1.7 million (including a $1.5 million investment in Euroflorist – see Note 4) as of April 2, 2017 and July 3, 2016.

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

Each reporting period, the Company uses available qualitative and quantitative information to evaluate its investments for impairment. When a decline in fair value, if any, is determined to be other-than-temporary, an impairment charge is recorded in the consolidated statement of operations. 

Note 8 –Debt

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

	April 2, 2017			July 3, 2016
	(in thousands)
Revolver (1)	$	-		$	-
Term Loan (1)		113,563			117,563
Deferred financing costs		(3,794	)		(3,573	)
Total debt		109,769			113,990
Less: current debt		6,469			19,594
Long-term debt	$	103,300		$	94,396

(1) On December 23, 2016, the Company entered into an Amended and Restated Credit Agreement (the “2016 Amended Credit Agreement”)with JPMorgan Chase Bank as administrative agent, and a group of lenders. The 2016 Amended Credit Agreement amended and restated the Company’s credit agreement dated as of September 30, 2014 (the “2014 Agreement”) to, among other things, extend the maturity date of the $115.0 million outstanding term loan ("Term Loan") and the revolving credit facility (the "Revolver") by approximately two years to December 23, 2021. The Term Loan is payable in 19 quarterly installments of principal and interest beginning on April 2, 2017, with escalating principal payments, at the rate of 5% in year one, 7.5% in year two, 10% in year three, 12.5% in year four, and 15% in year five, with the remaining balance of $61.8 million due upon maturity. The Revolver, in the aggregate amount of $200 million, subject to seasonal reduction to an aggregate amount of $100 million for the period from January 1 through August 1, may be used for working capital and general corporate purposes, subject to certain restrictions.

For each borrowing under the 2016 Amended Credit Agreement, the Company may elect that such borrowing bear interest at an annual rate equal to either (1) a base rate plus an applicable margin varying from 0.75% to 1.5%, based on the Company’s consolidated leverage ratio, where the base rate is the highest of (a) the prime rate, (b) the highest of the federal funds rate and the overnight bank funding rate as published by the New York Fed, plus 0.5% and (c) an adjusted LIBO rate, plus 1% or (2) an adjusted LIBO rate plus an applicable margin varying from 1.75% to 2.5%,  based on the Company’s consolidated leverage ratio.The 2016 Amended Credit Agreement requires that while any borrowings are outstanding the Company comply with certain financial covenants and affirmative covenants as well as certain negative covenants, that subject to certain exceptions, limit the Company's ability to, among other things, incur additional indebtedness, make certain investments and make certain restricted payments. The Company was in compliance with these covenants as of April 2, 2017. The 2016 Amended Credit Agreement is secured by substantially all of the assets of the Company and the Subsidiary Guarantors.

Future principal payments under the term loan are as follows: $1.5 million – remainder of fiscal 2017, $7.2 million – fiscal 2018, $10.1 million – fiscal 2019, $12.9 million – fiscal 2020, $15.8 million - fiscal 2021, and $66.1 million thereafter.

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Note 9 - Property, Plant and Equipment

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

	April 2, 2017			July 3, 2016
	(in thousands)
Land	$	30,789		$	30,789
Orchards in production and land improvements		9,564			9,483
Building and building improvements		56,407			54,950
Leasehold improvements		11,378			21,584
Production equipment and furniture and fixtures		44,887			72,912
Computer and telecommunication equipment		53,609			52,737
Software		123,800			136,333
Capital projects in progress - orchards		8,615			8,513
Property, plant and equipment, gross		339,049			387,301
Accumulated depreciation and amortization		(184,381	)		(215,939	)
Property, plant and equipment, net	$	154,668		$	171,362

Property, plant and equipment to be disposed of as a result of the Fannie May disposition were included in "Assets held for sale" on the condensed consolidated balance sheet as of April 2, 2017, and accordingly, are not included in this table (see Note 4). 

Note 10 - Fair Value Measurements

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

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

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

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

			Fair Value Measurements - Assets (Liabilities)
	Carrying Value		Level 1		Level 2		Level 3
			(in thousands)
Assets (liabilities) as of April 2, 2017:
Trading securities held in a “rabbi trust” (1)	$	6,538	$	6,538	$		$
	$	6,538	$	6,538	$		$
Assets (liabilities) as of July 3, 2016:
Trading securities held in a “rabbi trust” (1)	$	4,852	$	4,852	$	-	$	-
	$	4,852	$	4,852	$	-	$	-

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

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Note 11 – Income Taxes

At the end of each interim reporting period, the Company estimates its effective income tax rate expected to be applicable for the full year. This estimate is used in providing for income taxes on a year-to-date basis and may change in subsequent interim periods. The Company's effective tax rate from operations for the three months and nine months ended April 2, 2017 was 34.7% and 31.9% respectively, compared to 37.6% and 31.7% in the same respective periods of the prior year. The effective rates for fiscal 2017 differed from the U.S. federal statutory rate of 35% due to various permanent differences and tax credits, including excess tax benefits on stock based compensation as a result of the Company's early adoption of ASU 2016-09 (see Note 1), domestic production deductions and research and development credits, partially offset by state income taxes. The effective rate for fiscal 2016 differed from the U.S. federal statutory rate of 35% primarily due to the domestic production deduction and various tax credits such as employment credits and research and development credits that were renewed by U.S. Congress in December 2015, as well as the impact of the Company's reduced effective foreign tax rate in the UK resulting from the sale of iFlorist in October 2015, partially offset by state income taxes.

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various foreign countries. The Company concluded its U.S. federal examination for fiscal 2014, however, fiscal years 2015 and 2016 remain subject to U.S. federal examination. Due to ongoing state examinations and non-conformity with the U.S. federal statute of limitations for assessment, certain states remain open from fiscal 2012. The Company commenced operations in foreign jurisdictions in 2012. The Company's foreign income tax filings are open for examination by its respective foreign tax authorities, mainly Canada and the United Kingdom.

The Company's policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At April 2, 2017 the Company has remaining unrecognized tax positions of approximately $0.4 million, including accrued interest and penalties of $0.1 million. The Company believes that none of its unrecognized tax positions will be resolved over the next twelve months.

Note 12 – Business Segments

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

•     1-800-Flowers.com Consumer Floral,

•     BloomNet Wire Service, and

•     Gourmet Food and Gift Baskets

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

Net revenues:	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017			March 27, 2016
Segment Net Revenues:
1-800-Flowers.com Consumer Floral	$	124,684		$	113,182		$	297,707		$	280,956
BloomNet Wire Service		24,091			22,517			65,557			63,740
Gourmet Food & Gift Baskets		85,611			99,096			592,295			595,006
Corporate		260			262			839			817
Intercompany eliminations		(931	)		(850	)		(2,301	)		(1,890	)
Total net revenues	$	233,715		$	234,207		$	954,097		$	938,629

Operating Income:	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017			March 27, 2016
Segment Contribution Margin:
1-800-Flowers.com Consumer Floral	$	15,863		$	13,748		$	37,172		$	33,031
BloomNet Wire Service		8,245			7,747			23,713			22,017
Gourmet Food & Gift Baskets		(10,776	)		(6,753	)		84,544			88,626
Segment Contribution Margin Subtotal		13,332			14,742			145,429			143,674
Corporate (a)		(21,125	)		(20,432	)		(62,616	)		(60,519	)
Depreciation and amortization		8,492			7,546			25,656			24,279
Operating income (loss)	$	(16,285	)	$	(13,236	)	$	57,157		$	58,876

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

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Note 13 – Commitments and Contingencies

Litigation

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

Note 14. Fire at the Fannie May Warehouse and Distribution Facility

On November 27, 2014, a fire occurred at the Company's Maple Heights, Ohio warehouse and distribution facility. While the fire did not cause any injuries, the building was severely damaged, rendering it inoperable for the holiday season, and all Fannie May and Harry London confections in the facility were destroyed. As a result, the Company had limited supplies of its Fannie May Fine Chocolates and Harry London Chocolates products available in its retail stores as well as for its ecommerce and wholesale channels during its fiscal 2015 holiday season. While the Company implemented contingency plans to increase production for Fannie May Fine Chocolates and Harry London Chocolates products at its production facility in Canton, Ohio and to shift warehousing and distribution operations to alternate Company facilities, product availability was severely limited, impacting revenue and earnings during fiscal 2015, and lingering into fiscal 2016.

The following table reflects the costs related to the fire and the insurance recovery and associated gain as of September 27, 2015:

	Fire-related Insurance Recovery
	(in thousands)
Loss on inventory	$	29,587
Other fire related costs		5,802
Total fire related costs		35,389
Less: fire related insurance recoveries		(55,000	)
Fire related gain	$	(19,611	)

During the three months ended September 27, 2015, the Company and its insurance carrier reached final agreement, and during the three months ended December 27, 2015, the Company received all remaining proceeds from its Fannie May fire claim. The agreement, in the amount of $55.0 million, provided for: (i) recovery of raw materials and work-in-process at replacement cost, and finished goods at selling price, less costs to complete the sale and normal discounts and other charges, as well as (ii) other incremental fire-related costs. The cost of inventory lost in the fire was approximately $29.6 million, while other fire-related costs amounted to approximately $5.8 million, including incremental contracted lease and cold storage fees which was incurred until the Company moved back into its leased facility. The resulting gain of $19.6 million is included in “Other (income) expense, net” in the condensed consolidated statements of operations for nine months ended March 27, 2016. 

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

Forward Looking Statements

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

Overview

1-800-FLOWERS.COM, Inc. and its subsidiaries (collectively, the “Company”) is a leading provider of gourmet food and floral gifts for all occasions. For the past 40 years, 1-800-FLOWERS® (1-800-356-9377 or www.1800flowers.com) has been helping deliver smiles for our customers with gifts for every occasion, including fresh flowers and the finest selection of plants, gift baskets, gourmet foods, confections, candles, balloons and plush stuffed animals. As always, our 100% Smile Guarantee® backs every gift. The Company’s Celebrations® suite of services including Celebrations Passport® Free Shipping program, Celebrations Rewards® and Celebrations RemindersSM, are all designed to engage with customers and deepen relationships as a one-stop destination for all celebratory and gifting occasions. In 2016, 1-800-Flowers.com was awarded a Silver Stevie “e-Commerce Customer Service” Award, recognizing the Company’s innovative use of online technologies and social media to service the needs of customers. In addition, 1-800-FLOWERS.COM, Inc. was recognized as one of Internet Retailer’s Top 300 B2B e-commerce companies and was also recently named in Internet Retailer’s 2016 Top Mobile 500 as one of the world’s leading mobile commerce sites. The Company was included in Internet Retailer’s 2015 Top 500 for fast growing e-commerce companies. In 2015, 1-800-FLOWERS.COM was named a winner of the “Best Companies to Work for in New York State” award by The New York Society for Human Resource Management (NYS-SHRM).

The Company’s BloomNet® international floral wire service (www.mybloomnet.net) provides a broad range of quality products and value-added services designed to help professional florists grow their businesses profitably. The 1-800-FLOWERS.COM, Inc. “Gift Shop” also includes gourmet gifts such as premium, gift-quality fruits and other gourmet items from Harry & David® (1-877-322-1200 or www.harryanddavid.com), popcorn and specialty treats from The Popcorn Factory® (1-800-541-2676 or www.thepopcornfactory.com); cookies and baked gifts from Cheryl’s® (1-800-443-8124 or www.cheryls.com); premium chocolates and confections from Fannie May® (www.fanniemay.com and www.harrylondon.com); gift baskets and towers from 1-800- Baskets.com® (www.1800baskets.com); premium English muffins and other breakfast treats from Wolferman’s® (1-800-999-1910 or www.wolfermans.com); carved fresh fruit arrangements from FruitBouquets.com (www.fruitbouquets.com); and top quality steaks and chops from Stock Yards® (www.stockyards.com).

On March 15, 2017, the Company and Ferrero International S.A. entered into a Stock Purchase Agreement pursuant to which Ferrero will purchase from the Company all of the outstanding equity of Fannie May Confections Brands, Inc., including its subsidiaries, Fannie May Confections, Inc. and Harry London Candies, Inc.  The aggregate consideration payable to the Company in exchange for all of the outstanding equity of Fannie May is $115.0 million in cash (subject to adjustment for seasonal working capital).The closing of the Acquisition is expected to be on May 30, 2017 (see Note 4).  

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

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Category Information

The following table presents the net revenues, gross profit and category contribution margin from each of the Company’s business segments, as well as consolidated EBITDA and Adjusted EBITDA and adjusted net income. (Due to certain one-time items, the following Non-GAAP reconciliation tables have been included within MD&A. In order to present comparable information, certain financial information for the nine months ended March 27, 2016, is also being presented on a pro-forma basis.)

	Three Months Ended
	April 2, 2017			March 27, 2016			% Change
Net revenues:
1-800-Flowers.com Consumer Floral	$	124,684		$	113,182			10.2	%
BloomNet Wire Service		24,091			22,517			7.0	%
Gourmet Food & Gift Baskets		85,611			99,096			-13.6	%
Corporate		260			262			-0.8	%
Intercompany eliminations		(931	)		(850	)		-9.5	%
Total net revenues	$	233,715		$	234,207			-0.2	%
Gross profit:
1-800-Flowers.com Consumer Floral	$	50,584		$	45,974			10.0	%
		40.6	%		40.6	%
BloomNet Wire Service		12,915			12,390			4.2	%
		53.6	%		55.0	%
Gourmet Food & Gift Baskets		29,780			38,043			-21.7	%
		34.8	%		38.4	%
Corporate (a)		302			314			-3.8	%
		116.2	%		119.8	%
Total gross profit	$	93,581		$	96,721			-3.2	%
		40.0	%		41.3	%
EBITDA, excluding stock-based compensation
Category Contribution Margin:
1-800-Flowers.com Consumer Floral	$	15,863		$	13,748			15.4	%
BloomNet Wire Service		8,245			7,747			6.4	%
Gourmet Food & Gift Baskets		(10,776	)		(6,753	)		-59.6	%
Category Contribution Margin Subtotal		13,332			14,742			-9.6	%
Corporate (a)		(21,125	)		(20,432	)		-3.4	%
EBITDA	$	(7,793	)	$	(5,690	)		-37.0	%
Add: Stock-based compensation		1,286			1,650			22.1	%
EBITDA, excluding stock-based compensation	$	(6,507	)	$	(4,040	)		-61.1	%

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	Nine Months Ended
	April 2, 2017			March 27, 2016			% Change
Net revenues:
1-800-Flowers.com Consumer Floral	$	297,707		$	280,956			6.0	%
BloomNet Wire Service		65,557			63,740			2.9	%
Gourmet Food & Gift Baskets		592,295			595,006			-0.5	%
Corporate		839			817			2.7	%
Intercompany eliminations		(2,301	)		(1,890	)		-21.7	%
Total net revenues	$	954,097		$	938,629			1.6	%
Gross profit:
1-800-Flowers.com Consumer Floral	$	121,383		$	112,961			7.5	%
		40.8	%		40.2	%
BloomNet Wire Service		37,019			35,360			4.7	%
		56.5	%		55.5	%
Gourmet Food & Gift Baskets		262,716			267,650			-1.8	%
		44.4	%		45.0	%
Corporate (a)		844			842			0.2	%
		100.6	%		103.1	%
Total gross profit	$	421,962		$	416,813			1.2	%
		44.2	%		44.4	%

	Nine Months Ended
EBITDA, excluding stock-based compensation	April 2, 2017			Reported March 27, 2016			Harry & David Integration Costs		As Adjusted March 27, 2016			As Adjusted % Change
Category Contribution Margin:
1-800-Flowers.com Consumer Floral	$	37,172		$	33,031		$	-	$	33,031			12.5	%
BloomNet Wire Service		23,713			22,017			-	$	22,017			7.7	%
Gourmet Food & Gift Baskets		84,544			88,626			-		88,626			-4.6	%
Category Contribution Margin Subtotal		145,429			143,674			-		143,674			1.2	%
Corporate (a)		(62,616	)		(60,519	)		828		(59,691	)		-4.9	%
EBITDA	$	82,813		$	83,155		$	828	$	83,983			-1.4	%
Add: Stock-based compensation		4,784			4,831			-	$	4,831			1.0	%
EBITDA, excluding stock-based compensation	$	87,597		$	87,986		$	828	$	88,814			-1.4	%

16

Reconciliation of GAAP net income (loss) to Adjusted income (loss) attributable to 1-800-FLOWERS.COM, Inc.:

	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017		March 27, 2016
GAAP net income (loss)	$	(11,130	)	$	(9,126	)	$	36,028	$	46,922
Less: Net income (loss) attributable to noncontrolling interest		-			-			-		(1,007	)
Income (loss) attributable to 1-800-FLOWERS.COM, Inc.		(11,130	)		(9,126	)		36,028		47,929
Adjustments to reconcile income (loss) attributable to 1-800-FLOWERS.COM, Inc. to adjusted income (loss) attributable to 1-800-FLOWERS.COM, Inc.
Deduct: Gain from insurance recovery on warehouse fire										19,611
Add back: Loss on sale/impairment of iFlorist										2,121
Add back: Impairment of foreign equity method investment										1,728
Add back: Harry & David integration costs										828
Add back: income tax expense effect of adjustments										5,353
Adjusted income (loss) attributable to 1-800-FLOWERS.COM, Inc.	$	(11,130	)	$	(9,126	)	$	36,028	$	38,348
GAAP income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc.
Basic	$	(0.17	)	$	(0.14	)	$	0.55	$	0.74
Diluted	$	(0.17	)	$	(0.14	)	$	0.53	$	0.71
Adjusted income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc.
Basic	$	(0.17	)	$	(0.14	)	$	0.55	$	0.59
Diluted	$	(0.17	)	$	(0.14	)	$	0.53	$	0.57
Weighted average shares used in the calculation of GAAP income (loss) and Adjusted income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc.
Basic		65,199			64,687			65,169		64,724
Diluted		65,199			64,687			67,747		67,053

17

Reconciliation of GAAP income (loss) attributable to 1-800-Flowers.com, Inc. to Adjusted EBITDA, excluding stock-based compensation (b):

	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016				April 2, 2017		March 27, 2016
Income (loss) attributable to 1-800-FLOWERS.COM, Inc.	$	(11,130	)	$	(9,126	)		$	36,028	$	47,929
Add:
Interest expense, net		770			1,384				4,226		5,903
Depreciation and amortization		8,492			7,546				25,656		24,279
Income tax expense									16,903		21,813
Loss on sale/impairment of iFlorist											2,121
Impairment of foreign equity method investment											1,728
Less:
Net loss attributable to noncontrolling interest											1,007
Income tax benefit		5,925			5,494
Gain from insurance recovery on warehouse fire											19,611
EBITDA		(7,793	)		(5,690	)			82,813		83,155
Add: Integration costs											828
Adjusted EBITDA		(7,793	)		(5,690	)			82,813		83,983
Add: Stock-based compensation		1,286			1,650				4,784		4,831
Adjusted EBITDA, excluding stock-based compensation	$	(6,507	)	$	(4,040	)		$	87,597	$	88,814

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

(b) Performance is measured based on segment contribution margin or segment Adjusted EBITDA, reflecting only the direct controllable revenue and operating expenses of the segments. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead, described above, depreciation and amortization, other income (net), nor does it include one-time charges or gains. Management utilizes EBITDA, and adjusted financial information, as a performance measurement tool because it considers such information a meaningful supplemental measure of its performance and believes it is frequently used by the investment community in the evaluation of companies with comparable market capitalization. The Company also uses EBITDA and adjusted financial information as one of the factors used to determine the total amount of bonuses available to be awarded to executive officers and other employees. The Company’s credit agreement uses EBITDA and adjusted financial information to measure compliance with covenants such as interest coverage and debt incurrence. EBITDA and adjusted financial information is also used by the Company to evaluate and price potential acquisition candidates. EBITDA and adjusted financial information have limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of these limitations are: (a) EBITDA does not reflect changes in, or cash requirements for, the Company's working capital needs; (b) EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the Company's debts; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

18

Results of Operations

Net Revenues

	Three Months Ended							Nine Months Ended
	April 2, 2017		March 27, 2016		% Change			April 2, 2017		March 27, 2016		% Change
	(dollars in thousands)
Net revenues:
E-Commerce	$	177,729	$	179,413		-0.9	%	$	705,407	$	696,371		1.3	%
Other		55,986		54,794		2.2	%		248,690		242,258		2.7	%
Total net revenues	$	233,715	$	234,207		-0.2	%	$	954,097	$	938,629		1.6	%

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

Net revenues during the three months ended April 2, 2017 were consistent with the same period of the prior year. This reflects lower year-over-year revenues in the Company's Gourmet Food & Gift Baskets segment, primarily due to the impact of the Easter holiday shifting into the Company's fiscal fourth quarter of Fiscal 2017, compared to Fiscal 2016, when Easter was in the Company's fiscal third quarter. The unfavorable revenues within the Gourmet Food & Gift Baskets segment were largely offset by strong revenue growth in the Company's Consumer Floral and BloomNet segments, driven by "everyday" gifting and leveraging the benefit of the favorable placement of the Valentine's Day holiday. Net revenues increased 1.6% during the nine months ended April 2, 2017, compared to the same period of the prior year, as a result of growth within the Company's Consumer Floral and BloomNet segments, due to "everyday" gifting and the favorable placement of the Valentine's Day holiday, partially offset by lower revenue within the Company's Gourmet Food and Gift Baskets segment due to the impact of the Easter holiday shift, in addition to a reduction in the number of Harry & David seasonal kiosks and pop-up locations and the closure of several underperforming retail stores. The revenue impact of the shift of the Easter holiday on the three and nine months ended April 2, 2017, in comparison to the same periods of the prior year, is approximately $13.0 million.

E-commerce revenues (combined online and telephonic) decreased by 0.9% during the three months ended April 2, 2017, compared to the same period of the prior year, as a result of lower year-over-year revenues in the Company's Gourmet Food and Gift Baskets segment, primarily due to the impact of the Easter holiday shifting into the Company's fiscal fourth quarter of Fiscal 2017, compared to Fiscal 2016, when Easter was in the Company's fiscal third quarter. This impact was largely offset by strong revenue growth in the Company's Consumer Floral segment, primarily attributable to the favorable placement of the Valentine's Day holiday. E-commerce revenues increased 1.3%, during the nine months ended April 2, 2017, compared to the same period of the prior year, as a result of growth in the Company's Consumer Floral segment, primarily attributable to increases in "everyday" volume, as well as the favorable placement of the Valentine's Day holiday. Growth within the Consumer Floral segment was partially offset by lower revenues within the Gourmet Food & Gift Baskets segment, primarily due to the impact of the Easter holiday shifting into the Company's fiscal fourth quarter this year. During the three months ended April 2, 2017, the Company fulfilled approximately 2,703,000 orders through its e-commerce sales channels (online and telephonic sales) at an average value of $65.75, compared to approximately 2,860,000 orders at an average order value of $62.74 during the same period of the prior year.  During the nine months ended April 2, 2017, the Company fulfilled approximately 9,395,000 orders through its e-commerce sales channels (online and telephonic sales) at an average order value of $75.08, compared to approximately 9,550,000 orders at an average value of $72.92 during the same period of the prior year.

Other revenues are comprised of the Company's BloomNet Wire Service segment, as well as the wholesale and retail channels of its 1-800-Flowers.com Consumer Floral and Gourmet Food and Gift Baskets segments. Other revenues increased by 2.2% and 2.7% during the three and nine months ended April 2, 2017, respectively, compared to the same periods of the prior year, as a result of wholesale growth within the Gourmet Food and Gift Baskets segment and membership and ancillary service increases within the Bloomnet segment, partially offset by the timing of the Easter holiday and a reduction in the number of Harry & David seasonal kiosks and pop-up locations and the closure of several underperforming retail stores.

The 1-800-Flowers.com Consumer Floral segment includes the operations of the 1-800-Flowers.com brand, which derives revenue from the sale of consumer floral products through its e-commerce sales channels (telephonic and online sales), retail stores, and royalties from its franchise operations, as well as iFlorist, a UK based e-commerce retailer of floral products (through the date of its disposition in October 2015). Net revenues increased 10.2% and 6.0%, during the three and nine months ended April 2, 2017, in comparison to the same periods of the prior year, primarily as a result higher order volume driven by the Company's ability to leverage the Tuesday date placement of Valentine's Day, in comparison to the prior year when Valentine's Day fell on a Sunday, as well as enhanced merchandise assortments, including the Flirty Feline® floral arrangement, and efforts to increase its "everyday" business, including birthdays, anniversaries, sympathy and "just because," partially offset by the timing of the Easter holiday, which shifted approximately $2.5 million of revenue into the fourth quarter of Fiscal 2017.

The BloomNet Wire Service segment includes revenues from membership fees as well as other product and service offerings to florists. Net revenues increased 7.0% and 2.9% during the three and nine months ended April 2, 2017, respectively, compared to the same periods of the prior year, primarily due to increased order volumes, partly due to the favorable Valentine's Day placement, and an expanded offering of digital marketing and advertising programs. Growth during the nine months ended April 2, 2017 was partially offset by a decline in wholesale products, due to unfavorable Christmas holiday volume. 

The Gourmet Food & Gift Baskets segment includes the operations of Harry & David, Wolferman's, Stockyards, Cheryl's, Fannie May, Harry London, The Popcorn Factory and 1-800-Baskets/DesignPac. Revenue is derived from the sale of gourmet fruits, cookies, baked gifts, premium chocolates and confections, gourmet popcorn, gift baskets, and prime steaks and chops through the Company's e-commerce sales channels (telephonic and online sales) and company-owned and operated retail stores under the Harry & David, Cheryl's and Fannie May brand names, as well as wholesale operations. Net revenues decreased 13.6% and 0.5% during the three and nine months ended April 2, 2017, compared to the same period of the prior year, as a result of the timing of the Easter holiday,  which shifted approximately $10.5 million of revenue into the fourth quarter of Fiscal 2017, as well as the timing of some Harry & David revenues related to the brand's Fruit of the Month Club shipments and a reduction in the number of Harry & David seasonal kiosks and pop-up locations and the closure of several underperforming retail stores, partially offset by e-commerce revenue growth across most brands, as well as higher wholesale volumes within the Fannie May, Harry & David and DesignPac brands.

19

Gross Profit

	Three Months Ended									Nine Months Ended
	April 2, 2017			March 27, 2016			% Change			April 2, 2017			March 27, 2016			% Change
	(dollars in thousands)
Gross profit	$	93,581		$	96,721			-3.2	%	$	421,962		$	416,813			1.2	%
Gross margin %		40.0	%		41.3	%					44.2	%		44.4	%

Gross profit consists of net revenues less cost of revenues, which is comprised primarily of florist fulfillment costs (fees paid directly to florists), the cost of floral and non-floral merchandise sold from inventory or through third parties, and associated costs including inbound and outbound shipping charges. Additionally, cost of revenues include labor and facility costs related to direct-to-consumer and wholesale production operations.

Gross profit decreased 3.2% during the three months ended April 2, 2017, compared to the same period of the prior year, as a result of the aforementioned revenue decline and a 130 basis point decrease in gross margin percentage, both the result of the later Easter, which shifted higher margin e-commerce and retail revenues into the fourth quarter of Fiscal 2017, in comparison to Fiscal 2016 when Easter fell in the third quarter. Gross profit increased 1.2% during the nine months ended April 2, 2017, compared to the same period of the prior year, as a result of the aforementioned revenue growth within the Consumer Floral and BloomNet segments, partially offset by a 20 basis point decline in gross margin percentage attributable to the Gourmet Food & Gift Baskets segment.

The 1-800-Flowers.com Consumer Floral segment gross profit increased by 10.0% and 7.5%, respectively, during the three and nine months ended April 2, 2017, in comparison to the same periods of the prior year, due to the revenue growth noted above. Gross margin percentage of 40.6% for the three months ended April 2, 2017 was consistent with the same period of the prior year, but increased 60 basis points to 40.8%, during the nine months ended April 2, 2017, as a result of improved product sourcing and reductions in shipping costs, due to improvements in ground transportation coverage. 

The BloomNet Wire Service segment gross profit during the three and nine months ended April 2, 2017 increased by 4.2% and 4.7%, respectively, in comparison to the same periods of the prior year, due to the revenue increase referred to above. During the three months and nine months ended April 2, 2017, gross margin percentage was 53.6% and 56.5%, respectively, representing a decrease of 140 basis points, and an increase of 100 basis points, during the same periods of the prior year, as a result of product mix.

The Gourmet Food & Gift Baskets segment gross profit decreased 21.7% and 1.8%, while gross margin percentage declined 360 and 60 basis points, during the three and nine months ended April 2, 2017, compared to the same periods of the prior year, as a result of the aforementioned shift of the Easter Holiday, while gross margin percentage was also impacted by channel and product mix, and a decline in manufacturing productivity. 

Marketing and Sales Expense

	Three Months Ended									Nine months Ended
	April 2, 2017			March 27, 2016			% Change			April 2, 2017			March 27, 2016			% Change
	(dollars in thousands)
Marketing and sales	$	70,158		$	71,502			-1.9	%	$	245,112		$	243,567			0.6	%
Percentage of net revenues		30.0	%		30.5	%					25.7	%		25.9	%

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

Marketing and sales expenses decreased 1.9% during the three months ended April 2, 2017, primarily due to the shift of advertising and variable costs associated with the Easter selling season which moved into the Company's fiscal fourth quarter of Fiscal 2017, compared to Fiscal 2016, when Easter was in the Company's fiscal third quarter. As a percentage of net revenues, marketing and sales expenses decreased 50 and 20 basis points, to 30.0% and 25.7%, during the three and nine months ended April 2, 2017, respectively, compared to the same periods of the prior year, as a result of a decrease in labor costs due to a reduction in performance based bonuses, as well as reductions in labor and facility costs associated with the year-over-year decrease in the number of Harry & David seasonal kiosks and pop-up locations, and the closure of several underperforming retail stores.

20

Technology and Development Expense

	Three Months Ended									Nine months Ended
	April 2, 2017			March 27, 2016			% Change			April 2, 2017			March 27, 2016			% Change
	(dollars in thousands)
Technology and development	$	10,254		$	9,903			3.5	%	$	29,591		$	29,059			1.8	%
Percentage of net revenues		4.4	%		4.2	%					3.1	%		3.1	%

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

Technology and development expenses, during the three and nine months ended April 2, 2017, increased 3.5% and 1.8%, respectively, compared to the same periods of the prior year, primarily due to increased license and maintenance costs related to system monitoring and security, and platform improvements, partially offset by lower labor costs, due to reduced headcount and a reduction in performance based bonuses.

General and Administrative Expense

	Three Months Ended									Nine months Ended
	April 2, 2017			March 27, 2016			% Change			April 2, 2017			March 27, 2016			% Change
	(dollars in thousands)
General and administrative	$	20,962		$	21,006			-0.2	%	$	64,446		$	61,032			5.6	%
Percentage of net revenues		9.0	%		9.0	%					6.8	%		6.5	%

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

General and administrative expense, during the three months ended April 2, 2017, was consistent with the same period of the prior year, but increased 5.6%, during the nine months ended April 2, 2017, compared to the same period of the prior year, primarily as a result of increased health insurance costs, and an increase in headcount, partially offset by lower labor costs as a result of decreases in performance based bonuses, as well as one-time Harry and David integration costs incurred during the prior year. 

Depreciation and Amortization Expense

	Three Months Ended								Nine months Ended
	April 2, 2017		March 27, 2016			% Change			April 2, 2017			March 27, 2016			% Change
	(dollars in thousands)
Depreciation and amortization	$	8,492	$	7,546			12.5	%	$	25,656		$	24,279			5.7	%
Percentage of net revenues		3.6		3.2	%					2.7	%		2.6	%

Depreciation and amortization expense for the three and nine months ended April 2, 2017 increased 12.5% and 5.7%, respectively, in comparison to the same periods of the prior year, as a result of recent increases in capital expenditures, primarily in support of the Company's technology infrastructure.

21

Interest Expense, net

	Three Months Ended							Nine months Ended
	April 2, 2017		March 27, 2016		% Change			April 2, 2017		March 27, 2016		% Change
	(dollars in thousands)
Interest expense, net	$	1,191	$	1,239		-3.9	%	$	4,796	$	5,292		-9.4	%

Interest expense, net consists primarily of interest expense and amortization of deferred financing costs attributable to the Company's credit facility (see Note 8), net of income earned on the Company's available cash balances.

Interest expense, net decreased 3.9% and 9.4% during the three and nine months ended April 2, 2017, respectively in comparison to the same periods of the prior year, due to the reduction in the outstanding Term Debt due to principal payments during the year, partially offset by a $0.3 million write-off of deferred financing costs as a result of amending the Company's credit facility in December 2016, and an overall increase in interest rates.

Other (income) expense, net

	Three Months Ended								Nine months Ended
	April 2, 2017			March 27, 2016		% Change			April 2, 2017			March 27, 2016			% Change
	(dollars in thousands)
Other (income) expense, net	$	(421	)	$	145		-390.3	%	$	(570	)	$	(15,151	)		-96.2	%

Other (income) expense, net for the three months ended April 2, 2017 and March 27, 2016 consists primarily of income and losses resulting from changes in the value of the Company's Non-Qualified Deferred Compensation Plan investments.

Other (income) expense, net for the nine months ended April 2, 2017 consists primarily of income from the increase in the value of the Company's Non-Qualified Deferred Compensation Plan investments, partially offset by a decrease in the Company's equity interest in Flores Online, while Other (income) expense, net for the nine months ended September 27, 2015 consists primarily of a $19.6 million gain on insurance recoveries related to the Fannie May warehouse fire, offset by a $2.1 million impairment related to the sale of iFlorist (see Note 4), a $1.7 million impairment of the Company's investment in Flores Online (see Note 7), and a decline in the value of Non-Qualified Deferred Compensation Plan investments.

Income Taxes

The Company recorded income tax benefit of $5.9 million, and income tax expense of $16.9 million, respectively, during the three and nine months ended April 2, 2017, compared to an income tax benefit of $5.5 million and income tax expense of $21.8 million, respectively during the three and nine months ended March 27, 2016. The Company's effective tax rate from operations for the three months and nine months ended April 2, 2017 was 34.7% and 31.9% respectively, compared to 37.6% and 31.7% in the same respective periods of the prior year. The effective rates for fiscal 2017 differed from the U.S. federal statutory rate of 35% due to various permanent differences and tax credits, including excess tax benefits on stock based compensation as a result of the Company's early adoption of ASU 2016-09 (see Note 1), domestic production deductions and research and development credits, partially offset by state income taxes. The effective rate for fiscal 2016 differed from the U.S. federal statutory rate of 35% primarily due to the domestic production deduction and various tax credits such as employment credits and research and development credits that were renewed by U.S. Congress in December 2015, as well as the impact of the Company's reduced effective foreign tax rate in the UK resulting from the sale of iFlorist in October 2015, partially offset by state income taxes. At April 2, 2017 the Company has remaining unrecognized tax positions of approximately $0.4 million, including accrued interest and penalties of $0.1 million. The Company believes that none of its unrecognized tax positions will be resolved over the next twelve months.

Liquidity and Capital Resources

Cash Flows

At April 2, 2017, the Company had working capital of $133.0 million, including cash and cash equivalents of $56.8 million, and $87.4 million of net assets held for sale relating to the pending Fannie May transaction, compared to working capital of $45.8 million, including cash and cash equivalents of $27.8 million, at July 3, 2016.

Net cash provided by operating activities of $61.2 million for the nine months ended April 2, 2017, was primarily attributable to the Company's net income during the period, adjusted by non-cash charges for depreciation/amortization and stock based compensation, partially offset by seasonal changes in working capital, including an increase in trade receivables and prepaids, partially offset by an increase in accounts payable and accrued expenses. 

Net cash used in investing activities of $18.8 million for the nine months ended April 2, 2017, was primarily attributable to capital expenditures related to the Company's technology infrastructure and Gourmet Foods & Gift Baskets production equipment.

Net cash used in financing activities of $13.5 million for the nine months ended April 2, 2017 was primarily due to net Term Loan repayments of $4.0 million, the acquisition of $8.3 million of treasury stock and $1.5mm of additional debt issuance costs related to the 2016 Amended Credit Agreement (see Note 8). All borrowings under the Company's revolving credit facility were repaid by the end of the fiscal second quarter. 

22

Credit Facility

See Note 8 - Debt for details regarding the 2016 Amended Credit Agreement.

Despite the current challenging economic environment, the Company believes that cash flows from operations along with available borrowings from its 2016 Amended Credit Agreement will be a sufficient source of liquidity. Due to the seasonal nature of the Company's business, and its continued expansion into non-floral products, the Thanksgiving through Christmas holiday season, which falls within the Company's second fiscal quarter, is expected to generate nearly 50% of the Company's annual revenues, and all of its earnings. As a result, the Company generates significant cash from operations during its second quarter, and then utilizes that cash for operating needs during its fiscal third and fourth quarters. During the fourth quarter of Fiscal 2017, the Company expects to close on the sale of its Fannie May transaction (see Note 4 - Dispositions for details regarding the pending sale of Fannie May).  The terms of the Company's 2016 Credit Facility provide for the reinvestment of such sale proceeds within a 24 month period following closing.  Until such time, or until the Company reinvests such proceeds, the proceeds  from the sale will be used for working capital needs, reducing the amount that the Company expects to borrow against its Revolver to fund pre-holiday manufacturing and inventory purchases during its first and second quarter of fiscal 2018. Borrowings under the Revolver typically peak in November, at which time cash generated from operations during the Christmas holiday shopping season is expected to enable the Company to repay any working capital borrowings prior to the end of December.

Stock Repurchase Program

The Company has a stock repurchase plan through which purchases can be made from time to time in the open market and through privately negotiated transactions, subject to general market conditions. The repurchase program is financed utilizing available cash. In October 2016, the Company’s Board of Directors authorized an increase to its stock repurchase plan of up to $25 million. As of April 2, 2017, $19.7 million remained authorized under the plan.

Contractual Obligations

There have been no material changes outside the ordinary course of business related to the Company’s contractual obligations as discussed in the Annual Report on Form 10-K for the year ended July 3, 2016.

Critical Accounting Policies and Estimates

As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended July 3, 2016, the discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements of 1-800-FLOWERS.COM, Inc., which have been prepared in conformity with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances, and management evaluates its estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. The Company’s most critical accounting policies relate to revenue recognition, accounts receivable, inventory, goodwill, other intangible assets and long-lived assets and income taxes. There have been no significant changes to the assumptions and estimates related to the Company’s critical accounting policies, since July 3, 2016.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This amended guidance will enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Expanded disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. This guidance will be effective for the Company’s fiscal year ending June 30, 2019 and may be applied retrospectively. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which amends ASC 835-30, “Interest – Imputation of Interest.” In order to simplify the presentation of debt issuance costs, ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, and not recorded as a separate asset. The Company adopted this standard effective July 4, 2016 and applied it retrospectively to all periods presented. The impact of the adoption of the new guidance was to reclassify $3.6 million of deferred financing costs previously included within “Other Assets” to “Long-term debt” in the consolidated balance sheets as of July 3, 2016.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330).” The pronouncement was issued to simplify the measurement of inventory and changes the measurement from lower of cost or market to lower of cost and net realizable value. ASU 2015-11 is effective for the Company’s fiscal year ending July 1, 2018. The adoption of ASU 2015-11 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations.

23

In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." The pronouncement requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for the Company's fiscal year ending June 30, 2019. The adoption is not expected to have a significant impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for the Company’s fiscal year ending June 28, 2020. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” ASU No. 2016-09 affects all entities that issue share-based payment awards to their employees. ASU No. 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company has elected to early adopt the amendments in ASU 2016-09, beginning in the second quarter of fiscal year 2017. As a result, stock-based compensation excess tax benefits are reflected in the Consolidated Statements of Income as a component of the provision for income taxes, whereas they were previously recognized in equity. This change resulted in the recognition of excess tax benefits against income tax expenses, rather than additional paid-in capital, of $0.1 million and $0.9 million for the three and nine months ended April 2, 2017. There was no impact on earnings per share since approximately 700,000 tax benefit shares for the nine months ended April 2, 2017, previously associated with the APIC pool calculation, are no longer considered in the diluted share computation. Additionally, our Consolidated Statements of Cash Flows now present excess tax benefits as an operating activity. This change has been applied prospectively in accordance with the ASU and prior periods have not been adjusted.  Further, the Company has elected to account for forfeitures as they occur, rather than estimate expected forfeitures. The cumulative effect of this change, which was recorded as compensation expense in fiscal 2017, was not material to the financial statements. In addition, this ASU allows entities to withhold an amount up to an employees’ maximum individual statutory tax rate in the relevant jurisdiction, up from the minimum statutory requirement, without resulting in liability classification of the award. We adopted this change on a modified retrospective basis, with no impact to our consolidated financial statements. Finally, this ASU clarified that the cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity. This change does not have an impact on the Company’s consolidated financials as it conforms with its current practice

.In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces a new forward-looking “expected loss” approach, to estimate credit losses on most financial assets and certain other instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. ASU 2016-13 is effective for the Company’s fiscal year ending July 4, 2021, and the guidance is to be applied using the modified-retrospective approach. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01)," which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. ASU 2017-01 is effective for the Company's fiscal year ending June 30, 2019, with early adoption permitted, and should be applied prospectively, We do not expect the standard to have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04)," which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance is effective for the Company’s fiscal year ending July 4, 2021, with early adoption permitted, and should be applied prospectively. We do not expect the standard to have a material impact on our consolidated financial statements.

Forward Looking Information and Factors that May Affect Future Results

Our disclosure and analysis in this report contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company’s current expectations or beliefs concerning future events and can generally be identified by the use of statements that include words such as “estimate,” “project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “goal,” “target” or similar words or phrases. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements, including:

● the Company’s ability:

○ to achieve revenue and profitability;

○ to leverage its operating platform and reduce operating expenses;

○ to manage the increased seasonality of its business;

○ to cost effectively acquire and retain customers;

○ to effectively integrate and grow acquired companies, including the recent acquisition of Harry & David;

○ to reduce working capital requirements and capital expenditures;

○ to compete against existing and new competitors;

○ to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; and

○ to cost efficiently manage inventories;

● the outcome of contingencies, including legal proceedings in the normal course of business; and

● general consumer sentiment and economic conditions that may affect levels of discretionary customer purchases of the Company’s products.

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

24

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Forms 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission. Our Annual Report on Form 10-K filing for the fiscal year ended July 3, 2016 listed various important factors that could cause actual results to differ materially from expected and historic results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. Readers can find them in Part I, Item 1A, of that filing under the heading “Cautionary Statements Under the Private Securities Litigation Reform Act of 1995”. We incorporate that section of that Form 10-K in this filing and investors should refer to it.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Interest Rate Risk

The Company’s exposure to market risk for changes in interest rates relates primarily to the Company’s investment of available cash balances and its long-term debt. The Company generally invests its cash and cash equivalents in investment grade corporate and U.S. government securities. Due to the currently low rates of return the Company is receiving on its cash equivalents, the potential for a significant decrease in short-term interest rates is low and, therefore, a further decrease would not have a material impact on the Company’s interest income. Borrowings under the Company’s credit facility bear interest at a variable rate, plus an applicable margin, and therefore expose the Company to market risk for changes in interest rates. The effect of a 50 basis point increase in current interest rates on the Company’s interest expense would be approximately $0.2 million and $0.6 million during the three and nine months ended April 2, 2017, respectively.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of April 2, 2017. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of April 2, 2017.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the Company’s evaluation required by Rules 13a-15(d) or 15d-15(d) of the Securities Exchange Act of 1934 during the quarter ended April 2, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

25

PART II. – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Litigation

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

ITEM 1A.  RISK FACTORS.

There were no material changes to the Company’s risk factors as discussed in Part 1, Item 1A-Risk Factors in the Company’s Annual Report on Form 10-K for the year ended July 3, 2016.

26

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

The Company has a stock repurchase plan through which purchases can be made from time to time in the open market and through privately negotiated transactions, subject to general market conditions. The repurchase program is financed utilizing available cash. In October 2016, the Company’s Board of Directors authorized an increase to its stock repurchase plan of up to $25 million. As of April 2, 2017, $19.7 million remained authorized under the plan.

The following table sets forth, for the months indicated, the Company’s purchase of common stock during the first nine months of fiscal 2017, which includes the period July 4, 2016 through April 2, 2017:

Period	Total Number of Shares Purchased		Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (2)
	(in thousands, except average price paid per share)
07/04/16 - 07/31/16		95.0	$	9.31		95.0	$	11,161
08/01/16 - 08/28/16		100.0	$	9.31		100.0	$	10,227
08/29/16 - 10/02/16		123.6	$	9.21		123.6	$	9,085
10/03/16 – 10/30/16		119.3	$	9.33		119.3	$	23,883
10/31/16 - 11/27/16		286.9	$	9.41		286.9	$	21,184
11/28/16 - 01/01/17		4.1	$	10.48		4.1	$	21,141
01/02/17 - 01/29/17		59.5	$	10.11		59.5	$	20,538
01/30/17 - 02/26/17		90.3	$	9.43		90.3	$	19,656
02/27/17 - 04/02/17		-	$	-		-	$	19,656
Total		878.7	$	9.40		878.7

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

27

ITEM 6. EXHIBITS

2.1	Stock purchase agreement dated as of March 15, 2017, by and among 1-800-Flowers.com, Inc. and Ferrero International S.A. (Current Report on Form 8-k filed with the Securities and Exchange Commision on March 20, 2017, Exhibit 2.1)**
31.1	Certification of the principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
31.2	Certification of the principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
32.1	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Document
101.PRE	XBRL Taxonomy Definition Presentation Document

* Filed herewith.

** Incorporated by reference to exhibits or appendices previously filed with the Securities and Exchange Commission, as indicated by the reference in brackets.

28

SIGNATURES

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

	1-800-FLOWERS.COM, Inc. (Registrant)
Date:      May 12, 2017	/s/ Christopher G. McCann Christopher G. McCann Chief Executive Officer,  Director and President (Principal Executive Officer)
Date:      May 12, 2017	/s/ William E. Shea William E. Shea Senior Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)

29

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(RULE 13a-14 (a))

I, Chris G. McCann, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 12, 2017	/s/ Chris G. McCann
	Chris G. McCann
	Chief Executive Officer,
	Director and President

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(RULE 13a-14 (a))

I, William E. Shea, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 12, 2017	/s/ William E. Shea
	William E. Shea
	Senior Vice President, Treasurer and
	Chief Financial Officer

EX-32.1

Exhibit 32.1

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

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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

(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended April 2, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934; as amended; and

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

Dated: May 12, 2017	/s/ Chris G. McCann
	Chris G. McCann Chief Executive Officer, Director and President
Dated: May 12, 2017	/s/ William E. Shea
	William E. Shea Senior Vice President, Treasurer and Chief Financial Officer

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

XML

Document And Entity Information - shares	9 Months Ended
	Apr. 02, 2017	May 04, 2017
Document Information [Line Items]
Entity Registrant Name	1 800 FLOWERS COM INC
Entity Central Index Key	0001084869
Trading Symbol	flws
Current Fiscal Year End Date	--07-02
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Type	10-Q
Document Period End Date	Apr. 02, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		35,352,095
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		29,983,004

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Apr. 02, 2017	Jul. 03, 2016
Assets
Cash and cash equivalents	$ 56,765	$ 27,826
Trade receivables, net	21,549	19,123
Inventories	63,713	103,328
Prepaid and other	17,388	16,382
Assets held for sale	91,822
Total current assets	251,237	166,659
Property, plant and equipment, net	154,668	171,362
Goodwill	62,767	77,667
Other intangibles, net	61,441	79,000
Other assets	9,685	8,253
Total assets	539,798	502,941
Liabilities and Stockholders' Equity
Accounts payable	19,457	35,201
Accrued expenses	87,921	66,066
Current maturities of long-term debt	6,469	19,594
Liabilities held for sale	4,428
Total current liabilities	118,275	120,861
Long-term debt	103,300	94,396
Deferred tax liabilities	33,628	35,517
Other liabilities	9,225	9,581
Total liabilities	264,428	260,355
Total stockholders' equity	275,370	242,586
Total liabilities and stockholders' equity	$ 539,798	$ 502,941

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2017	Mar. 27, 2016	Apr. 02, 2017	Mar. 27, 2016
Net revenues	$ 233,715	$ 234,207	$ 954,097	$ 938,629
Cost of revenues	140,134	137,486	532,135	521,816
Gross profit	93,581	96,721	421,962	416,813
Operating expenses:
Marketing and sales	70,158	71,502	245,112	243,567
Technology and development	10,254	9,903	29,591	29,059
General and administrative	20,962	21,006	64,446	61,032
Depreciation and amortization	8,492	7,546	25,656	24,279
Total operating expenses	109,866	109,957	364,805	357,937
Operating income (loss)	(16,285)	(13,236)	57,157	58,876
Interest expense, net	1,191	1,239	4,796	5,292
Other (income) expense, net	(421)	145	(570)	(15,151)
Income (loss) before income taxes	(17,055)	(14,620)	52,931	68,735
Income tax expense (benefit)	(5,925)	(5,494)	16,903	21,813
Net income (loss)	(11,130)	(9,126)	36,028	46,922
Less: Net loss attributable to noncontrolling interest				(1,007)
Net income (loss) attributable to 1-800-FLOWERS.COM, Inc.	$ (11,130)	$ (9,126)	$ 36,028	$ 47,929
Basic net income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc. (in dollars per share)	$ (0.17)	$ (0.14)	$ 0.55	$ 0.74
Diluted net income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc. (in dollars per share)	$ (0.17)	$ (0.14)	$ 0.53	$ 0.71
Weighted average shares used in the calculation of net income (loss) per common share:
Basic (in shares)	65,199	64,687	65,169	64,724
Diluted (in shares)	65,199	64,687	67,747	67,053

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2017	Mar. 27, 2016	Apr. 02, 2017	Mar. 27, 2016
Net income (loss)	$ (11,130)	$ (9,126)	$ 36,028	$ 46,922
Other comprehensive income/(loss) (currency translation)	(100)	(6)	(19)	231
Comprehensive income (loss)	(11,230)	(9,132)	36,009	47,153
Net loss attributable to noncontrolling interest				(1,007)
Other comprehensive income (loss) (currency translation) attributable to noncontrolling interest				87
Comprehensive net loss attributable to noncontrolling interest				(920)
Comprehensive income (loss) attributable to 1-800-FLOWERS.COM, Inc.	$ (11,230)	$ (9,132)	$ 36,009	$ 48,073

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Apr. 02, 2017	Mar. 27, 2016
Operating activities:
Net income	$ 36,028	$ 46,922
Reconciliation of net income to net cash provided by operating activities, net of acquisitions:
Depreciation and amortization	25,656	24,279
Amortization of deferred financing costs	1,285	1,209
Deferred income taxes	(1,889)	(1,793)
Foreign equity method investment impairment		1,728
Loss on sale/impairment of iFlorist		2,121
Bad debt expense	935	973
Stock-based compensation	4,784	4,831
Other non-cash items	(227)	299
Changes in operating items:
Trade receivables	(13,595)	(15,090)
Insurance receivable		3,053
Inventories	892	(2,488)
Prepaid and other	(2,030)	156
Accounts payable and accrued expenses	9,670	10,453
Other assets	(34)	(47)
Other liabilities	(267)	412
Net cash provided by operating activities	61,208	77,018
Investing activities:
Capital expenditures, net of non-cash expenditures	(18,753)	(20,022)
Net cash used in investing activities	(18,753)	(20,022)
Financing activities:
Acquisition of treasury stock	(8,277)	(12,958)
Proceeds from exercise of employee stock options	268	700
Proceeds from bank borrowings	181,000	178,000
Repayment of notes payable and bank borrowings	(185,000)	(188,980)
Debt issuance costs	(1,507)
Other		(2)
Net cash used in financing activities	(13,516)	(23,240)
Net change in cash and cash equivalents	28,939	33,756
Cash and cash equivalents:
Beginning of period	27,826	27,940
End of period	$ 56,765	$ 61,696

XML

Note 1 - Accounting Policies

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

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

Note

1

– Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by

1

-

800

-FLOWERS.COM, Inc. and subsidiaries (the “

Company”) in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form

10

-Q and Article

10

of Regulation S-X. They do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the

three

and

nine

month periods ended

April

2,

2017

are not necessarily indicative of the results that

may

be expected for the fiscal year ending

July

2,

2017.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form

10

-K for the fiscal year ended

July

3,

2016.

The Company

’s quarterly results

may

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

second

fiscal quarter, is expected to generate nearly

50%

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

third

and

fourth

quarters in comparison to its fiscal

first

quarter. In fiscal

2016,

the Easter Holiday was on

March

27th,

and as a result, all revenue and EBITDA associated with this holiday was within the Company’s fiscal

third

quarter. In fiscal

2017,

Easter falls on

April

16th,

which will result in the shift of associated revenue and EBITDA from the Company’s

third

quarter to its

fourth

quarter.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanyin

g notes. Actual results could differ from those estimates.

Recent Accounting Pronouncements

In

May

2014,

the FASB issued ASU No.

2014

-

09,

“

Revenue from Contracts with Customers.” This amended guidance will enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Expanded disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. This guidance will be effective for the Company’s fiscal year ending

June

30,

2019

and

may

be applied retrospectively. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In

April

2015,

the FASB issued ASU No.

2015

-

03,

“

Simplifying the Presentation of Debt Issuance Costs,” which amends ASC

835

-

30,

“Interest – Imputation of Interest.” In order to simplify the presentation of debt issuance costs, ASU No.

2015

-

03

requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, and not recorded as a separate asset. The Company adopted this standard effective

July

4,

2016

and applied it retrospectively to all periods presented. The impact of the adoption of the new guidance was to reclassify

$3.6

million of deferred financing costs previously included within “Other Assets” to “Long-term debt” in the consolidated balance sheets as of

July

3,

2016.

In

July

2015,

the FASB issued ASU No.

2015

-

11,

“

Inventory (Topic

330).”

The pronouncement was issued to simplify the measurement of inventory and changes the measurement from lower of cost or market to lower of cost and net realizable value. ASU

2015

-

11

is effective for the Company’s fiscal year ending

July

1,

2018.

The adoption of ASU

2015

-

11

is not expected to have a significant impact on the Company’s consolidated financial position or results of operations.

In

January

2016,

the FASB issued ASU No.

2016

-

01,

"Financial Instruments

– Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." The pronouncement requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for the Company's fiscal year ending

June

30,

2019.

The adoption is not expected to have a significant impact on the Company’s consolidated financial statements.

In

February

201

6,

the FASB issued ASU No.

2016

-

02,

“Leases (Topic

842).”

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

June

28,

2020.

The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In

March

2016,

the FASB issued ASU No.

2016

-

09,

“Improvements to Employee Share-Based Payment Accounting.” ASU No.

2016

-

09

affects all entities that issue share-based payment awards to their employees. ASU No.

2016

-

09

simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company has elected to early adopt the amendments in ASU

2016

-

09,

beginning in the

second

quarter of fiscal year

2017.

As a result, stock-based compensation excess tax benefits are reflected in the Consolidated Statements of Income as a component of the provision for income taxes, whereas they were previously recognized in equity. This change resulted in the recognition of excess tax benefits against income tax expenses, rather than additional paid-in capital, of

$0.1

million and

$0.9

 million

 for the

three

and

nine

months ended

April

2,

2017.

There was no impact on earnings per share since approximately

700,000

tax benefit shares for the 

nine

months ended

April

2,

2017,

previously associated with the APIC pool calculation, are no longer considered in the diluted share computation. Additionally, our Consolidated Statements of Cash Flows now present excess tax benefits as an operating activity. This change has been applied prospectively in accordance with the ASU and prior periods have not been adjusted.  Further, the Company has elected to account for forfeitures as they occur, rather than estimate expected forfeitures. The cumulative effect of this change, which was recorded as compensation expense in fiscal

2017,

was not material to the financial statements. In addition, this ASU allows entities to withhold an amount up to an employees’ maximum individual statutory tax rate in the relevant jurisdiction, up from the minimum statutory requirement, without resulting in liability classification of the award. We adopted this change on a modified retrospective basis, with no impact to our consolidated financial statements. Finally, this ASU clarified that the cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity. This change does not have an impact on the Company’s consolidated financials as it conforms with its current practice.

In

June

2016,

the FASB issued ASU No.

2016

-

13,

“

Financial Instruments-Credit Losses (Topic

326):

Measurement of Credit Losses on Financial Instruments.” ASU

2016

-

13

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

2016

-

13

is effective for the Company’s fiscal year ending

July

4,

2021,

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

In

January

2017,

the FASB issued ASU No.

2017

-

01,

"Business Combinations (Topic

805):

Clarifying the Definition of a Business (ASU

2017

-

01),"

which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. ASU

2017

-

01

is effective for

the Company's fiscal year ending

June

30,

2019,

 

with early adoption permitted,

and should be applied

 prospectively, We do not expect the standard to have a material impact on our consolidated financial statements.

In

January

2017,

the FASB issued ASU No.

2017

-

04,

"Intangibles - Goodwill and Other (Topic

350):

Simplifying the Test for Goodwill Impairment (ASU

2017

-

04),"

which eliminates step

two

from the goodwill impairment test. Under ASU

2017

-

04,

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

July

4,

2021,

with early adoption permitted, and should be applied prospectively. 

We do not expect the standard to have a material impact on our consolidated financial statements.

Reclassifications

Certain balances in the prior fiscal years have been reclassified to conform to the presentation in the current fiscal year. See “

Recent Accounting Pronouncements” above regarding the impact of our adoption of ASU No.

2015

-

03

and ASU No.

2015

-

17.

XML

Note 2 - Net Income Per Common Share

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

2

– Net Income Per Common Share

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

	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017		March 27, 2016
	(in thousands, except per share data,  unaudited)
Numerator:
Net income (loss)	$	(11,130	)	$	(9,126	)	$	36,028	$	46,922
Less: Net loss attributable to noncontrolling interest		-			-					(1,007	)
Income attributable to 1-800-FLOWERS.COM, Inc.	$	(11,130	)	$	(9,126	)	$	36,028	$	47,929
Denominator:
Weighted average shares outstanding		65,199			64,687			65,169		64,724
Effect of dilutive securities:
Employee s tock options (1)		-			-			1,511		1,428
Employee restricted stock awards		-			-			1,067		901
		-			-			2,578		2,329
Adjusted weighted-average shares and assumed conversions		65,199			64,687			67,747		67,053
Net income per common share attributable to 1-800-FLOWERS.COM, Inc.
Basic	$	(0.17	)	$	(0.14	)	$	0.55	$	0.74
Diluted	$	(0.17	)	$	(0.14	)	$	0.53	$	0.71

Note

(1):

The effect of options to purchase

0.0

and 

0.1

million shares for the

three

and

nine

months ended

April

2

,

2017

and

0.1

million shares for both the

three

and

nine

months ended

March

27,

2016,

respectively, were excluded from the calculation of

 net income per share on a diluted basis as their effect is anti-dilutive. 

Note

(2):

 As a result of the net loss from continuing operations attributable to

1

-

800

-FLOWERS.COM, Inc. for the

three

months ended

April

2,

2017

and

March

27,

2016,

there is

no

dilutive impact to the net loss per share calculation for the respective periods.

XML

Note 3 - Stock-based Compensation

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note

3

– Stock-Based Compensation

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

12

and Note

13

 to the consolidated financial statements included in the Company

’s Annual Report on Form

10

-K for the fiscal year ended

July

3,

2016,

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

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

	Three Months Ended				Nine Months Ended
	April 2,  2017		March 27,  2016		April 2,  2017		March 27,  2016
			(in thousands, unaudited)
Stock options	$	110	$	112	$	337	$	314
Restricted stock		1,176		1,538		4,447		4,517
Total		1,286		1,650		4,784		4,831
Deferred income tax benefit		387		491		1,528		1,533
Stock-based compensation expense, net	$	899	$	1,159	$	3,256	$	3,298

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

	Three Months Ended				Nine Months Ended
	April 2,  2017		March 27,  2016		April 2,  2017		March 27,  2016
			(in thousands,  unaudited)
Marketing and sales	$	342	$	586	$	1,384	$	1,781
Technology and development		71		91		267		411
General and administrative		873		973		3,133		2,639
Total	$	1,286	$	1,650	$	4,784	$	4,831

The following table summarizes stock option activity during the 

nine

months ended

April

2,

2017

(unaudited)

:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (000s)
Outstanding at July 3, 2016		2,182,234		$	2.49
Granted		-		$	-
Exercised		(51,500	)	$	5.20
Forfeited		-		$	-
Outstanding at April 2, 2017		2,130,734		$	2.43		$	16,566
Options vested or expected to vest at April 2, 2017		2,130,734		$	2.43		$	16,566
Exercisable at April 2, 2017		1,471,734		$	2.37		$	11,530

As of

April

2,

2017,

the total future compensation cost related to non-vested options, not yet recognized in the statement of income, was

$1.0

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

2.2

 years.

The Company grants shares of Common Stock to its employees that are subject to r

estrictions on transfer and risk of forfeiture until fulfillment of applicable service and performance conditions and, in certain cases, holding periods (Restricted Stock). The following table summarizes the activity of non-vested restricted stock awards during the 

nine

months ended

April

2,

2017

(unaudited)

:

	Shares			Weighted Average Grant Date Fair Value
Non-vested at July 3, 2016		2,017,069		$	6.78
Granted		814,406		$	9.88
Vested		(885,502	)	$	6.83
Forfeited		(473,494	)	$	9.77
Non-vested at April 2, 2017		1,472,479		$	7.50

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

April

2,

2017,

there was

$6.9

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

2.2

years.

XML

Note 4 - Dispositions

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note

4

- Dispositions

Pending disposition of Fannie

May

On

March

15,

2017,

the Company 

and Ferrero International S.A., a Luxembourg corporation (“Ferrero”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) pursuant to which Ferrero will purchase from the Company all of the outstanding equity of Fannie

May

Confections Brands, Inc., including its subsidiaries, Fannie

May

Confections, Inc. and Harry London Candies, Inc. (“Fannie

May”)

(the “Acquisition”).  The aggregate consideration payable to the Company in exchange for all of the outstanding equity of Fannie

May

is

$115.0

million in cash (subject to adjustment for seasonal working capital).

 The Purchase Agreement contains customary representations, warranties and covenants by the Company and F

errero. The closing of the Acquisition is expected to be on 

May

30,

2017

and is subject to customary closing conditions, including applicable regulatory approvals, covenants to enter into a transition services agreement whereby the Company will provide certain post-closing services to Ferrero and Fannie

May

related to the business of Fannie

May

and a commercial agreement with respect to the distribution of certain Ferrero and Fannie

May

products. 

The Company determined that the Fannie

May

business (disposal group) met the held for sale criteria, as prescribed by FASB ASC

360

-

10

-

45

-

9,

but did not meet the criteria to qualify as a discontinued operation.

 Further, per 

ASC

360

-

10

-

35

-

43,

a disposal group classified as held for sale is initially measured at the lower of its carrying amount or fair value less cost to sell

. The Company compared Fannie May's carrying amount to its fair value less estimated costs to sell, and determined that the disposal group should be measured at its carrying amount as of

April

2,

2017.

The assets and liabilities of Fannie

May

are presented as "Assets held for sale" and "Liabilities held for sale" in the Company's condensed consolidated balance sheets as of

April

2,

2017.

 

The following table presents the aggregate carrying amounts of the major classes of assets and liabilities related to the Fannie

May

business to be disposed of as of

April

2,

 

2017:

	Fannie May - Held for sale assets and liabilities
		(in thousands, unaudited)
Assets:
Trade receivables, net		9,325
Inventories		38,724
Prepaid and other		1,024
Property, plant and equipment, net		11,087
Goodwill (Note 1)		14,900
Other intangibles, net		16,572
Other assets		190
Total assets held for sale	$	91,822
Liabilities:
Accounts payable	$	1,387
Accrued expenses		1,264
Other liabilities		1,777
Total liabilities held for sale	$	4,428

Note

(1)

- Per FASB ASC

350

-

20

-

40,

when a portion of reporting unit that constitutes a business is to be disposed of, goodwill associated with that business shall be included in the carrying amount of the business in determining the gain or loss on disposal. The amount of goodwill to be included in that carrying amount shall be based on the relative fair values of the business to be disposed of and the portion of the reporting unit that will be retained. Fannie

May

represents a business as defined by FASB and is included in the Company's Gourmet Food & Gift Baskets reporting unit. As a result, we allocated goodwill of

$14.9

million to the Fannie

May

business based on the relative fair value of Fannie

May

to the remaining Gourmet Food & Gift Baskets reporting unit. The Company estimated the fair value of the Gourmet Food & Gift Baskets reporting unit in a manner consistent with its significant accounting policy for goodwill, described in Item

15,

Note

1

of the  

Company’s annual report on Form

10

-K for the fiscal year ended

July

3,

2016.

                     

Disposition of Colonial Gifts Limited ("iFlorist")

During the quarter ended

September

27,

2015,

the Company

’s management committed to a plan to sell its iFlorist business in order to focus its internal resources and capital on integrating and achieving synergy savings with respect to its acquisition of Harry & David, which was completed on

September

30,

2014.

As a result, the Company determined that the iFlorist business (disposal group) met the held for sale criteria, as prescribed by FASB ASC

360

-

10

-

45

-

9,

as of

September

27,

2015.

As such, the Company compared iFlorist’s carrying amount

($3.4

million) to its fair value less cost to sell

($1.5

million), and recorded an impairment charge of

$1.9

million during the period ended

September

27,

2015.

The Company recorded this impairment charge within “Other (income) expense, net” in the condensed consolidated statements of operations. During

October

2015,

the Company completed the sale of substantially all of the assets of iFlorist to Euroflorist AB (“Euroflorist”), a pan-European floral and gifting company headquartered in Malmo, Sweden. As consideration for the assets sold, the Company received an investment in Euroflorist with a fair value on the date of sale of approximately

$1.5

million. (The Company will account for this investment using the cost method as it does not possess the ability to exercise significant influence over Euroflorist.) Upon completion of the sale of iFlorist during the quarter ended

December

27,

2015,

the Company recorded an additional loss on sale of

$0.2

million.

XML

Note 5 - Inventory

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note

5

– Inventory

The Company

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

	April 2, 201 7		July 3, 2016
	(in thousands)
Finished goods	$	30,602	$	44,264
Work-in-process		26,800		24,573
Raw materials		6,311		34,491
Total inventory	$	63,713	$	103,328

Inventories to be disposed of as a result of the Fannie

May

 disposition were included in "Assets held for sale" on the condensed consolidated balance sheet as of

April

2,

2017,

and accordingly, are not included in this table (see

Note

4

). 

XML

Note 6 - Goodwill and Intangible Assets

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note

6

– Goodwill and Intangible Assets

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

	1-800-Flowers.com Consumer Floral		BloomNet Wire Service		Gourmet Food & Gift Baskets (1)		Total
	(in thousands)
Balance at  July 3, 2016	$	17,441	$	-	$	60,226	$	77,667
Goodwill reclassified to assets held for sale (see Note 4 )		-		-		14,900		14,900
Balance at April 2, 2017	$	17,441	$	-	$	45,326	$	62,767

(1) The total carrying amount of goodwill for all periods in the table above is reflected net of $71.1 million of accumulated impairment charges, which were recorded in the Gourmet Food & Gift Baskets segment during fiscal 2009.

The Company

’s other intangible assets consist of the following:

				April 2 , 201 7						July 3, 2016
	Amortization Period			Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in years)			(in thousands)
Intangible assets with determinable lives
Investment in licenses	14	-	16	$	7,420	$	5,911	$	1,509	$	7,420	$	5,832	$	1,588
Customer lists	3	-	10		12,184		7,920		4,264		21,144		15,960		5,184
Other	5	-	14		2,946		2,017		929		3,665		2,698		967
Total intangible assets with determinable lives					22,550		15,848		6,702		32,229		24,490		7,739
Trademarks with indefinite lives					54,739		-		54,739		71,261		-		71,261
Total identifiable intangible assets				$	77,289	$	15,848	$	61,441	$	103,490	$	24,490	$	79,000

Trademarks and customer lists to be disposed of as a result of the Fannie

May

 disposition were included in "Assets held for sale" on the condensed consolidated balance sheet as of

April

2,

2017,

and accordingly, are not included in this table (see

Note

4

). 

Intangible assets are reviewed for impairmen

t whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group

may

not be recoverable. Future estimated amortization expense is as follows: remainder of fiscal

2017

-

$0.4

 million, fiscal

2018

-

$1.3

million, fiscal

2019

-

$0.7

million, fiscal

2020

-

$0.6

million, fiscal

2021

-

$0.6million

and thereafter -

$3.1million.

XML

Note 7 - Investments

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

Note

7

– Investments

The Company has certain investments in non-marketable equity instruments of private companies. The Company accounts for

these investments using the equity method if they provide the Company the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between

20%

and

50%,

although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method is appropriate. The Company records equity method investments initially at cost, and adjusts the carrying amount to reflect the Company’s share of the earnings or losses of the investee.

The Company

’s equity method investment is comprised of a

29.0%

interest in Flores Online, a Sao Paulo, Brazil based internet floral and gift retailer, that the Company made on

May

31,

2012.

The book value of this investment was

$1.1

million as of

April

2,

2017

and

July

3,

2016,

and is included in the “Other assets” line item within the Company’s consolidated balance sheets. The Company’s equity in the net loss of Flores Online for the

three

and

nine

months ended

April

2,

2017

 and

March

27,

2016

 was less than

$0.1

million. During the quarter ended

September

27,

2015,

the Company determined that the fair value of its investment in Flores Online

($1.2

million) was below its carrying value

($2.9

million) and that this decline was other-than-temporary. As a result, the Company recorded an impairment charge of

$1.7

million, which is included within the “Other (income) expense, net” line items in the Company’s consolidated statements of operations for the

nine

-months ended

March

27,

2016.

Investments in non-marketable equity instruments of private companies, where the Company does not possess the ability to exercise significa

nt influence, are accounted for under the cost method. Cost method investments are originally recorded at cost, and are included within the “Other assets” line item within the Company’s consolidated balance sheets. The aggregate carrying amount of the Company’s cost method investments was

$1.7

million (including a

$1.5

million investment in Euroflorist – see

Note

4

) as of

April

2,

2017

 and

July

3,

2016.

The Company also holds certain trading securities associated with its Non-Qualified Deferred C

ompensation Plan (“NQDC Plan”). These investments are measured using quoted market prices at the reporting date and are included within the “Other assets” line item in the condensed consolidated balance sheets (see

Note

10

).

Each reporting period,

the Company uses available qualitative and quantitative information to evaluate its investments for impairment. When a decline in fair value, if any, is determined to be other-than-temporary, an impairment charge is recorded in the consolidated statement of operations. 

XML

Note 8 - Debt

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

8

–Debt

The Company

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

	April 2, 2017			July 3, 2016
	(in thousands)
Revolver (1)	$	-		$	-
Term Loan (1)		113,563			117,563
Deferred financing costs		(3,794	)		(3,573	)
Total debt		109,769			113,990
Less: current debt		6,469			19,594
Long-term debt	$	103,300		$	94,396

(1)

 

On

December

23,

2016

, the Company 

entered into an Amended and Restated Credit Agreement (the

“2016

Amended Credit Agreement”)

with JPMorgan Chase Bank as administrative agent, and a group of lenders. 

The

2016

Amended Credit Agreement amended and restated the Company

’s credit agreement dated as of

September

30,

2014

 (the

“2014

Agreement”)

 to, among other things, extend the maturity date of the

$115.0

million outstanding term loan ("Term Loan") and the revolving credit facility (the "Revolver") by approximately

two

years to

December

23,

2021.

 The Term Loan is payable in

19

 quarterly installments of principal and interest beginning on

April

2,

2017,

with escalating principal payments, at the rate of

5%

in year

one,

7.5%

in year

two,

10%

in year

three,

12.5%

in year

four,

and

15%

 in year

five,

with the remaining balance of

$61.8

 million due upon maturity. The Revolver, in the aggregate amount of

$200

million, subject to seasonal reduction to an aggregate amount of

$100

million for the period from

January

1

through

August

1,

may

be used for working capital and general corporate purposes, subject to certain restrictions.

For each borrowing under the

2016

Amended Credit Agreement, the Company

may

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

(1)

a base rate plus an applicable margin varying from 

0.75%

to

1.5%,

based on the Company’s consolidated leverage ratio, where the base rate is the highest of (a) the prime rate, (b) the highest of the federal funds rate and the overnight bank funding rate as published by the New York Fed, plus

0.5%

and (c) an adjusted LIBO rate, plus

1%

or

(2)

 an adjusted LIBO rate plus an applicable margin varying from

1.75%

to

2.5%,

  based on the Company’s consolidated leverage ratio.

The

2016

Amended Credit Agreement requires that while any borrowings are outstanding the Company comply with certain financial covenants and affirmative covenants as well as certain negative covenants, that subject to certain exceptions, limit the Company's ability to, among other things, incur additional indebtedness, make certain investments and make certain restricted payments.

 The Company was in compliance with these covenants as of

April

2,

2017.

 

The

2016

Amended Credit Agreement is secured by substantially all of the assets of the Company and the Subsidiary Guarantors.

Future principal payments under the term loan are as fo

llows:

$1.5

 million – remainder of fiscal

2017,

$7.2

 million – fiscal

2018,

$10.1

 million – fiscal

2019,

$12.9

 million – fiscal

2020,

$15.8

million - fiscal

2021,

and

$66.1

million thereafter.

XML

Note 9 - Property, Plant and Equipment

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note

9

- Property, Plant and Equipment

The Company

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

	April 2, 2017			July 3, 2016
	(in thousands)
Land	$	30,789		$	30,789
Orchards in production and land improvements		9,564			9,483
Building and building improvements		56,407			54,950
Leasehold improvements		11,378			21,584
Production equipment and furniture and fixtures		44,887			72,912
Computer and telecommunication equipment		53,609			52,737
Software		123,800			136,333
Capital projects in progress - orchards		8,615			8,513
Property, plant and equipment, gross		339,049			387,301
Accumulated depreciation and amortization		(184,381	)		(215,939	)
Property, plant and equipment, net	$	154,668		$	171,362

Property, plant and equipment to be disposed of as a result of the Fannie

May

 disposition were included in "Assets held for sale" on the condensed consolidated balance sheet as of

April

2,

2017,

and accordingly, are not included in this table (see

Note

4

). 

XML

Note 10 - Fair Value Measurements

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

10

- Fair Value Measurements

Cash and cash equivalents, trade and other receivables, accounts payable and accrued expenses are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Although no

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

may

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

may

have occurred. Goodwill and indefinite lived intangibles are tested for impairment annually, or more frequently if events occur or circumstances change such that it is more likely than not that an impairment

may

exist, as required under the accounting standards.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants

at the measurement date. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level

1

measurements) and the lowest priority to unobservable inputs (level

3

measurements). The

three

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

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

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

			Fair Value Measurements - Assets (Liabilities)
	Carrying Value		Level 1		Level 2		Level 3
			(in thousands)
Assets (liabilities) as of April 2, 2017:
Trading securities held in a “ rabbi trust” (1)	$	6,538	$	6,538	$		$
	$	6,538	$	6,538	$		$
Assets (liabilities) as of July 3, 2016:
Trading securities held in a “ rabbi trust” (1)	$	4,852	$	4,852	$	-	$	-
	$	4,852	$	4,852	$	-	$	-

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

XML

Note 11 - Income Taxes

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

11

– Income Taxes

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

may

change in subsequent interim

periods. The Company's effective tax rate from operations for the

three

months and

nine

months ended

April

2,

2017

 was

34.7%

and

31.9%

respectively, compared to

37.6%

and

31.7%

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

2017

differed from the U.S. federal statutory rate of

35%

due to various permanent differences and tax credits

, including excess tax benefits on stock based compensation as a result of the Company's early adoption of ASU

2016

-

09

(see 

Note

1

)

, domestic production deductions and research and development credits,

partially offset by state income taxes. 

The effective rate for fiscal

2016

differed from the U.S. federal statutory rate of

35%

primarily due to the domestic production deduction and various tax credits such as employment credits and research and development credits that were renewed by U.S. Congress in

December

2015,

as well as the impact of the Company's reduced effective foreign tax rate in the UK resulting from the sale of iFlorist in

October

2015,

partially offset by state income taxes.

The Company files income tax returns in the U

.S. federal jurisdiction, various state jurisdictions, and various foreign countries. The Company concluded its U.S. federal examination for fiscal

2014,

however, fiscal years

2015

and

2016

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

2012.

The Company commenced operations in foreign jurisdictions in

2012.

The Company's foreign income tax filings are open for examination by its respective foreign tax authorities, mainly Canada and the United Kingdom.

The Company'

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

April

2,

2017

the Company has remaining unrecognized tax positions of approximately

$0.4

million, including accrued interest and penalties of

$0.1

million. The Company believes that

none

of its unrecognized tax positions will be resolved over the next

twelve

months.

XML

Note 12 - Business Segments

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

12

– Business Segments

The Company

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

three

business segments:

•

     

1

-

800

-Flowers.com Consumer Floral,

•

     BloomNet Wire Service, and

•

     Gourmet Food and Gift Baskets

Segment performance is measured based on contribution margin, which includes only the direct controllable revenue and operating expe

nses of the segments. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead (see (a) below), nor does it include depreciation and amortization, other (income) expense, net and income taxes, or stock-based compensation and certain acquisition/integration costs, both of which are included within corporate overhead. Assets and liabilities are reviewed at the consolidated level by management and not accounted for by segment.

Net revenues:	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017			March 27, 2016
Segment Net Revenues:
1-800-Flowers.com Consumer Floral	$	124,684		$	113,182		$	297,707		$	280,956
BloomNet Wire Service		24,091			22,517			65,557			63,740
Gourmet Food & Gift Baskets		85,611			99,096			592,295			595,006
Corporate		260			262			839			817
Intercompany eliminations		(931	)		(850	)		(2,301	)		(1,890	)
Total net revenues	$	233,715		$	234,207		$	954,097		$	938,629

Operating Income:	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017			March 27, 2016
Segment Contribution Margin:
1-800-Flowers.com Consumer Floral	$	15,863		$	13,748		$	37,172		$	33,031
BloomNet Wire Service		8,245			7,747			23,713			22,017
Gourmet Food & Gift Baskets		(10,776	)		(6,753	)		84,544			88,626
Segment Contribution Margin Subtotal		13,332			14,742			145,429			143,674
Corporate (a)		(21,125	)		(20,432	)		(62,616	)		(60,519	)
Depreciation and amortization		8,492			7,546			25,656			24,279
Operating income (loss)	$	(16,285	)	$	(13,236	)	$	57,157		$	58,876

(a)

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

XML

Note 13 - Commitments and Contingencies

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

13

– Commitments and Contingencies

Litigation

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

XML

Note 14 - Fire at the Fannie May Warehouse and Distribution Facility

9 Months Ended

Apr. 02, 2017

Notes to Financial Statements

Nonrecurring Items [Text Block]

Note

14.

Fire at the

Fannie

May

Warehouse and Distribution Facility

On

November

27,

2014,

a fire occurred at the Company's Maple Heights, Ohio warehouse and distribution facility. While the fire did not cause any injuries, the building was severely damaged, rendering it inoperable for the holiday season,

and all Fannie

May

and Harry London confections in the facility were destroyed. As a result, the Company had limited supplies of its Fannie

May

Fine Chocolates and Harry London Chocolates products available in its retail stores as well as for its ecommerce and wholesale channels during its fiscal

2015

holiday season. While the Company implemented contingency plans to increase production for Fannie

May

Fine Chocolates and Harry London Chocolates products at its production facility in Canton, Ohio and to shift warehousing and distribution operations to alternate Company facilities, product availability was severely limited, impacting revenue and earnings during fiscal

2015,

and lingering into fiscal

2016.

The following table reflects the costs related to the

fire and the insurance recovery and associated gain as of

September

27,

2015:

	Fire-related Insurance Recovery
	(in thousands)
Loss on inventory	$	29,587
Other fire related costs		5,802
Total fire related costs		35,389
Less: fire related insurance recoveries		(55,000	)
Fire related gain	$	(19,611	)

During the

three

months ended

September

27,

2015,

the Company and its insurance carrier reached final agreement, and during the

three

months ended

December

27,

2015,

the Company received all remaining proceeds

 from its Fannie

May

fire claim. The agreement, in the amount of

$55.0

million, provided for: (i) recovery of raw materials and work-in-process at replacement cost, and finished goods at selling price, less costs to complete the sale and normal discounts and other charges, as well as (ii) other incremental fire-related costs. The cost of inventory lost in the fire was approximately

$29.6

million, while other fire-related costs amounted to approximately

$5.8

million, including incremental contracted lease and cold storage fees which was incurred until the Company moved back into its leased facility. The resulting gain of

$19.6

million is included in “Other (income) expense, net” in the condensed consolidated statements of operations for 

nine

months ended

March

27,

2016.

 

XML

Significant Accounting Policies (Policies)

9 Months Ended

Apr. 02, 2017

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by

1

-

800

-FLOWERS.COM, Inc. and subsidiaries (the “

Company”) in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form

10

-Q and Article

10

of Regulation S-X. They do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the

three

and

nine

month periods ended

April

2,

2017

are not necessarily indicative of the results that

may

be expected for the fiscal year ending

July

2,

2017.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form

10

-K for the fiscal year ended

July

3,

2016.

The Company

’s quarterly results

may

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

second

fiscal quarter, is expected to generate nearly

50%

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

third

and

fourth

quarters in comparison to its fiscal

first

quarter. In fiscal

2016,

the Easter Holiday was on

March

27th,

and as a result, all revenue and EBITDA associated with this holiday was within the Company’s fiscal

third

quarter. In fiscal

2017,

Easter falls on

April

16th,

which will result in the shift of associated revenue and EBITDA from the Company’s

third

quarter to its

fourth

quarter.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanyin

g notes. Actual results could differ from those estimates.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In

May

2014,

the FASB issued ASU No.

2014

-

09,

“

Revenue from Contracts with Customers.” This amended guidance will enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Expanded disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. This guidance will be effective for the Company’s fiscal year ending

June

30,

2019

and

may

be applied retrospectively. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In

April

2015,

the FASB issued ASU No.

2015

-

03,

“

Simplifying the Presentation of Debt Issuance Costs,” which amends ASC

835

-

30,

“Interest – Imputation of Interest.” In order to simplify the presentation of debt issuance costs, ASU No.

2015

-

03

requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, and not recorded as a separate asset. The Company adopted this standard effective

July

4,

2016

and applied it retrospectively to all periods presented. The impact of the adoption of the new guidance was to reclassify

$3.6

million of deferred financing costs previously included within “Other Assets” to “Long-term debt” in the consolidated balance sheets as of

July

3,

2016.

In

July

2015,

the FASB issued ASU No.

2015

-

11,

“

Inventory (Topic

330).”

The pronouncement was issued to simplify the measurement of inventory and changes the measurement from lower of cost or market to lower of cost and net realizable value. ASU

2015

-

11

is effective for the Company’s fiscal year ending

July

1,

2018.

The adoption of ASU

2015

-

11

is not expected to have a significant impact on the Company’s consolidated financial position or results of operations.

In

January

2016,

the FASB issued ASU No.

2016

-

01,

"Financial Instruments

– Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." The pronouncement requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for the Company's fiscal year ending

June

30,

2019.

The adoption is not expected to have a significant impact on the Company’s consolidated financial statements.

In

February

201

6,

the FASB issued ASU No.

2016

-

02,

“Leases (Topic

842).”

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

June

28,

2020.

The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

In

March

2016,

the FASB issued ASU No.

2016

-

09,

“Improvements to Employee Share-Based Payment Accounting.” ASU No.

2016

-

09

affects all entities that issue share-based payment awards to their employees. ASU No.

2016

-

09

simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company has elected to early adopt the amendments in ASU

2016

-

09,

beginning in the

second

quarter of fiscal year

2017.

As a result, stock-based compensation excess tax benefits are reflected in the Consolidated Statements of Income as a component of the provision for income taxes, whereas they were previously recognized in equity. This change resulted in the recognition of excess tax benefits against income tax expenses, rather than additional paid-in capital, of

$0.1

million and

$0.9

 million

 for the

three

and

nine

months ended

April

2,

2017.

There was no impact on earnings per share since approximately

700,000

tax benefit shares for the 

nine

months ended

April

2,

2017,

previously associated with the APIC pool calculation, are no longer considered in the diluted share computation. Additionally, our Consolidated Statements of Cash Flows now present excess tax benefits as an operating activity. This change has been applied prospectively in accordance with the ASU and prior periods have not been adjusted.  Further, the Company has elected to account for forfeitures as they occur, rather than estimate expected forfeitures. The cumulative effect of this change, which was recorded as compensation expense in fiscal

2017,

was not material to the financial statements. In addition, this ASU allows entities to withhold an amount up to an employees’ maximum individual statutory tax rate in the relevant jurisdiction, up from the minimum statutory requirement, without resulting in liability classification of the award. We adopted this change on a modified retrospective basis, with no impact to our consolidated financial statements. Finally, this ASU clarified that the cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity. This change does not have an impact on the Company’s consolidated financials as it conforms with its current practice.

In

June

2016,

the FASB issued ASU No.

2016

-

13,

“

Financial Instruments-Credit Losses (Topic

326):

Measurement of Credit Losses on Financial Instruments.” ASU

2016

-

13

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

2016

-

13

is effective for the Company’s fiscal year ending

July

4,

2021,

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

In

January

2017,

the FASB issued ASU No.

2017

-

01,

"Business Combinations (Topic

805):

Clarifying the Definition of a Business (ASU

2017

-

01),"

which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. ASU

2017

-

01

is effective for

the Company's fiscal year ending

June

30,

2019,

 

with early adoption permitted,

and should be applied

 prospectively, We do not expect the standard to have a material impact on our consolidated financial statements.

In

January

2017,

the FASB issued ASU No.

2017

-

04,

"Intangibles - Goodwill and Other (Topic

350):

Simplifying the Test for Goodwill Impairment (ASU

2017

-

04),"

which eliminates step

two

from the goodwill impairment test. Under ASU

2017

-

04,

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

July

4,

2021,

with early adoption permitted, and should be applied prospectively. 

We do not expect the standard to have a material impact on our consolidated financial statements.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain balances in the prior fiscal years have been reclassified to conform to the presentation in the current fiscal year. See “

Recent Accounting Pronouncements” above regarding the impact of our adoption of ASU No.

2015

-

03

and ASU No.

2015

-

17.

XML

Note 2 - Net Income Per Common Share (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

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

	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017		March 27, 2016
	(in thousands, except per share data,  unaudited)
Numerator:
Net income (loss)	$	(11,130	)	$	(9,126	)	$	36,028	$	46,922
Less: Net loss attributable to noncontrolling interest		-			-					(1,007	)
Income attributable to 1-800-FLOWERS.COM, Inc.	$	(11,130	)	$	(9,126	)	$	36,028	$	47,929
Denominator:
Weighted average shares outstanding		65,199			64,687			65,169		64,724
Effect of dilutive securities:
Employee s tock options (1)		-			-			1,511		1,428
Employee restricted stock awards		-			-			1,067		901
		-			-			2,578		2,329
Adjusted weighted-average shares and assumed conversions		65,199			64,687			67,747		67,053
Net income per common share attributable to 1-800-FLOWERS.COM, Inc.
Basic	$	(0.17	)	$	(0.14	)	$	0.55	$	0.74
Diluted	$	(0.17	)	$	(0.14	)	$	0.53	$	0.71

XML

Note 3 - Stock-based Compensation (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block]

	Three Months Ended				Nine Months Ended
	April 2,  2017		March 27,  2016		April 2,  2017		March 27,  2016
			(in thousands, unaudited)
Stock options	$	110	$	112	$	337	$	314
Restricted stock		1,176		1,538		4,447		4,517
Total		1,286		1,650		4,784		4,831
Deferred income tax benefit		387		491		1,528		1,533
Stock-based compensation expense, net	$	899	$	1,159	$	3,256	$	3,298

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended				Nine Months Ended
	April 2,  2017		March 27,  2016		April 2,  2017		March 27,  2016
			(in thousands,  unaudited)
Marketing and sales	$	342	$	586	$	1,384	$	1,781
Technology and development		71		91		267		411
General and administrative		873		973		3,133		2,639
Total	$	1,286	$	1,650	$	4,784	$	4,831

Share-based Compensation, Stock Options, Activity [Table Text Block]

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (000s)
Outstanding at July 3, 2016		2,182,234		$	2.49
Granted		-		$	-
Exercised		(51,500	)	$	5.20
Forfeited		-		$	-
Outstanding at April 2, 2017		2,130,734		$	2.43		$	16,566
Options vested or expected to vest at April 2, 2017		2,130,734		$	2.43		$	16,566
Exercisable at April 2, 2017		1,471,734		$	2.37		$	11,530

Schedule of Nonvested Share Activity [Table Text Block]

	Shares			Weighted Average Grant Date Fair Value
Non-vested at July 3, 2016		2,017,069		$	6.78
Granted		814,406		$	9.88
Vested		(885,502	)	$	6.83
Forfeited		(473,494	)	$	9.77
Non-vested at April 2, 2017		1,472,479		$	7.50

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Note 4 - Dispositions (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

Disposal Groups, Including Discontinued Operations [Table Text Block]

	Fannie May - Held for sale assets and liabilities
		(in thousands, unaudited)
Assets:
Trade receivables, net		9,325
Inventories		38,724
Prepaid and other		1,024
Property, plant and equipment, net		11,087
Goodwill (Note 1)		14,900
Other intangibles, net		16,572
Other assets		190
Total assets held for sale	$	91,822
Liabilities:
Accounts payable	$	1,387
Accrued expenses		1,264
Other liabilities		1,777
Total liabilities held for sale	$	4,428

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Note 5 - Inventory (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	April 2, 201 7		July 3, 2016
	(in thousands)
Finished goods	$	30,602	$	44,264
Work-in-process		26,800		24,573
Raw materials		6,311		34,491
Total inventory	$	63,713	$	103,328

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Note 6 - Goodwill and Intangible Assets (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

Schedule of Goodwill [Table Text Block]

	1-800-Flowers.com Consumer Floral		BloomNet Wire Service		Gourmet Food & Gift Baskets (1)		Total
	(in thousands)
Balance at  July 3, 2016	$	17,441	$	-	$	60,226	$	77,667
Goodwill reclassified to assets held for sale (see Note 4 )		-		-		14,900		14,900
Balance at April 2, 2017	$	17,441	$	-	$	45,326	$	62,767

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

				April 2 , 201 7						July 3, 2016
	Amortization Period			Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in years)			(in thousands)
Intangible assets with determinable lives
Investment in licenses	14	-	16	$	7,420	$	5,911	$	1,509	$	7,420	$	5,832	$	1,588
Customer lists	3	-	10		12,184		7,920		4,264		21,144		15,960		5,184
Other	5	-	14		2,946		2,017		929		3,665		2,698		967
Total intangible assets with determinable lives					22,550		15,848		6,702		32,229		24,490		7,739
Trademarks with indefinite lives					54,739		-		54,739		71,261		-		71,261
Total identifiable intangible assets				$	77,289	$	15,848	$	61,441	$	103,490	$	24,490	$	79,000

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Note 8 - Debt (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

Schedule of Debt [Table Text Block]

	April 2, 2017			July 3, 2016
	(in thousands)
Revolver (1)	$	-		$	-
Term Loan (1)		113,563			117,563
Deferred financing costs		(3,794	)		(3,573	)
Total debt		109,769			113,990
Less: current debt		6,469			19,594
Long-term debt	$	103,300		$	94,396

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Note 9 - Property, Plant and Equipment (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

Property, Plant and Equipment [Table Text Block]

	April 2, 2017			July 3, 2016
	(in thousands)
Land	$	30,789		$	30,789
Orchards in production and land improvements		9,564			9,483
Building and building improvements		56,407			54,950
Leasehold improvements		11,378			21,584
Production equipment and furniture and fixtures		44,887			72,912
Computer and telecommunication equipment		53,609			52,737
Software		123,800			136,333
Capital projects in progress - orchards		8,615			8,513
Property, plant and equipment, gross		339,049			387,301
Accumulated depreciation and amortization		(184,381	)		(215,939	)
Property, plant and equipment, net	$	154,668		$	171,362

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Note 10 - Fair Value Measurements (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

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

			Fair Value Measurements - Assets (Liabilities)
	Carrying Value		Level 1		Level 2		Level 3
			(in thousands)
Assets (liabilities) as of April 2, 2017:
Trading securities held in a “ rabbi trust” (1)	$	6,538	$	6,538	$		$
	$	6,538	$	6,538	$		$
Assets (liabilities) as of July 3, 2016:
Trading securities held in a “ rabbi trust” (1)	$	4,852	$	4,852	$	-	$	-
	$	4,852	$	4,852	$	-	$	-

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Note 12 - Business Segments (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

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

Net revenues:	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017			March 27, 2016
Segment Net Revenues:
1-800-Flowers.com Consumer Floral	$	124,684		$	113,182		$	297,707		$	280,956
BloomNet Wire Service		24,091			22,517			65,557			63,740
Gourmet Food & Gift Baskets		85,611			99,096			592,295			595,006
Corporate		260			262			839			817
Intercompany eliminations		(931	)		(850	)		(2,301	)		(1,890	)
Total net revenues	$	233,715		$	234,207		$	954,097		$	938,629

Operating Income:	Three Months Ended						Nine Months Ended
	April 2, 2017			March 27, 2016			April 2, 2017			March 27, 2016
Segment Contribution Margin:
1-800-Flowers.com Consumer Floral	$	15,863		$	13,748		$	37,172		$	33,031
BloomNet Wire Service		8,245			7,747			23,713			22,017
Gourmet Food & Gift Baskets		(10,776	)		(6,753	)		84,544			88,626
Segment Contribution Margin Subtotal		13,332			14,742			145,429			143,674
Corporate (a)		(21,125	)		(20,432	)		(62,616	)		(60,519	)
Depreciation and amortization		8,492			7,546			25,656			24,279
Operating income (loss)	$	(16,285	)	$	(13,236	)	$	57,157		$	58,876

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Note 14 - Fire at the Fannie May Warehouse and Distribution Facility (Tables)

9 Months Ended

Apr. 02, 2017

Notes Tables

Business Insurance Recoveries [Table Text Block]

	Fire-related Insurance Recovery
	(in thousands)
Loss on inventory	$	29,587
Other fire related costs		5,802
Total fire related costs		35,389
Less: fire related insurance recoveries		(55,000	)
Fire related gain	$	(19,611	)

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Note 1 - Accounting Policies (Details Textual) - USD ($)	3 Months Ended	9 Months Ended
	Apr. 02, 2017	Apr. 02, 2017
Employee Service Share-based Compensation, Excess Tax Benefit, Shares		700,000
Reclassification of Deferred Financing Costs From Other Assets to Long-term Debt [Member] | July 3, 2016 [Member]
Prior Period Reclassification Adjustment		$ 3,600,000
Accounting Standards Update 2016-09 [Member]
Employee Service Share-based Compensation, Excess Tax Benefit from Compensation Expense	$ 100,000	$ 0.90

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Note 2 - Net Income Per Common Share (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2017	Mar. 27, 2016	Apr. 02, 2017	Mar. 27, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	100,000	100,000	100,000
Dilutive Securities, Effect on Basic Earnings Per Share	$ 0	$ 0

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Note 2 - Net Income Per Common Share - Computation of Basic and Diluted Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended				9 Months Ended
		Apr. 02, 2017		Mar. 27, 2016		Apr. 02, 2017	Mar. 27, 2016
Net income (loss)		$ (11,130)		$ (9,126)		$ 36,028	$ 46,922
Less: Net loss attributable to noncontrolling interest							(1,007)
Income attributable to 1-800-FLOWERS.COM, Inc.		$ (11,130)		$ (9,126)		$ 36,028	$ 47,929
Weighted average shares outstanding (in shares)		65,199		64,687		65,169	64,724
Dilutive securities (in shares)			[1]		[1]	2,578	2,329
Adjusted weighted-average shares and assumed conversions (in shares)		65,199		64,687		67,747	67,053
Basic (in dollars per share)		$ (0.17)		$ (0.14)		$ 0.55	$ 0.74
Diluted (in dollars per share)		$ (0.17)		$ (0.14)		$ 0.53	$ 0.71
Employee Stock Option [Member]
Dilutive securities (in shares)	[2]					1,511	1,428
Restricted Stock [Member]
Dilutive securities (in shares)						1,067	901

[1] As a result of the net loss from continuing operations attributable to 1-800-FLOWERS.COM, Inc. for the three months ended April 2, 2017 and March 27, 2016, there is no dilutive impact to the net loss per share calculation for the respective periods.

[2] The effect of options to purchase 0.0 and 0.1 million shares for the three and nine months ended April 2, 2017 and 0.1 million shares for both the three and nine months ended March 27, 2016, respectively, were excluded from the calculation of net income per share on a diluted basis as their effect is anti-dilutive.

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Note 3 - Stock-based Compensation (Details Textual) $ in Millions	9 Months Ended
	Apr. 02, 2017 USD ($)
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 1.0
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 73 days
Restricted Stock [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 73 days
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	$ 6.9

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Note 3 - Stock-based Compensation - Stock-based Compensation Expense Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2017	Mar. 27, 2016	Apr. 02, 2017	Mar. 27, 2016
Allocated share-based compensation expense	$ 1,286	$ 1,650	$ 4,784	$ 4,831
Deferred income tax benefit	387	491	1,528	1,533
Allocated share-based compensation expense, net	899	1,159	3,256	3,298
Employee Stock Option [Member]
Allocated share-based compensation expense	110	112	337	314
Restricted Stock [Member]
Allocated share-based compensation expense	$ 1,176	$ 1,538	$ 4,447	$ 4,517

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Note 3 - Stock-based Compensation - Allocation of Stock-based Compensation to Operating Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2017	Mar. 27, 2016	Apr. 02, 2017	Mar. 27, 2016
Allocated share-based compensation expense	$ 1,286	$ 1,650	$ 4,784	$ 4,831
Selling and Marketing Expense [Member]
Allocated share-based compensation expense	342	586	1,384	1,781
Technology and development [Member]
Allocated share-based compensation expense	71	91	267	411
General and Administrative Expense [Member]
Allocated share-based compensation expense	$ 873	$ 973	$ 3,133	$ 2,639

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Note 3 - Stock-based Compensation - Stock Option Activity (Details)	9 Months Ended
	Apr. 02, 2017 $ / shares shares
Outstanding, options (in shares) | shares	2,182,234
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 2.49
Granted, options (in shares) | shares
Granted, weighted average exercise price (in dollars per share) | $ / shares
Exercised, options (in shares) | shares	(51,500)
Exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 5.20
Forfeited, options (in shares) | shares
Forfeited, weighted average exercise price (in dollars per share) | $ / shares
Outstanding, options (in shares) | shares	2,130,734
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 2.43
Outstanding, weighted average remaining contractual term (Year)	16566 years
Options vested or expected to vest, options (in shares) | shares	2,130,734
Options vested or expected to vest, weighted average exercise price (in dollars per share) | $ / shares	$ 2.43
Options vested or expected to vest, weighted average remaining contractual term (Year)	16566 years
Exercisable, options (in shares) | shares	1,471,734
Exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 2.37
Exercisable, weighted average remaining contractual term (Year)	11530 years

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Note 3 - Stock-based Compensation - Non-vested Restricted Stock Activity (Details) - Restricted Stock [Member]	9 Months Ended
	Apr. 02, 2017 $ / shares shares
Non-vested, Shares (in shares) | shares	2,017,069
Non-vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 6.78
Granted, Shares (in shares) | shares	814,406
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 9.88
Vested, Shares (in shares) | shares	(885,502)
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 6.83
Forfeited, Shares (in shares) | shares	(473,494)
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 9.77
Non-vested, Shares (in shares) | shares	1,472,479
Non-vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 7.50

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Note 4 - Dispositions (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Dec. 27, 2015	Sep. 27, 2015	Apr. 02, 2017	Mar. 15, 2017	Oct. 31, 2015
Fannie May [Member] | Gourmet Food and Gift Baskets [Member]
Disposal Group, Including Discontinued Operation, Goodwill			$ 14.9
Fannie May [Member] | Ferrero [Member]
Disposal Group, Including Discontinued Operation, Consideration				$ 115.0
iFlorist [Member]
Disposal Group, Including Discontinued Operation, Assets, Carrying Amount Before Impairment		$ 3.4
Disposal Group, Including Discontinued Operation, Assets		1.5
Gain (Loss) on Disposition of Business	$ (0.2)
iFlorist [Member] | Other Nonoperating Income (Expense) [Member]
Asset Impairment Charges		$ 1.9
Euroflorist [Member]
Disposal Group, Including Discontinued Operation, Consideration					$ 1.5

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Note 4 - Dispositions - Held for Sale Assets and Liabilities of Fannie May (Details) - USD ($) $ in Thousands	Apr. 02, 2017	Jul. 03, 2016
Assets:
Total assets held for sale	$ 91,822
Liabilities:
Total liabilities held for sale	4,428
Fannie May [Member]
Assets:
Trade receivables, net	9,325
Inventories	38,724
Prepaid and other	1,024
Property, plant and equipment, net	11,087
Goodwill (Note 1)	14,900
Other intangibles, net	16,572
Other assets	190
Total assets held for sale	91,822
Liabilities:
Accounts payable	1,387
Accrued expenses	1,264
Other liabilities	1,777
Total liabilities held for sale	$ 4,428

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Note 5 - Inventory - Summary of Inventory (Details) - USD ($) $ in Thousands	Apr. 02, 2017	Jul. 03, 2016
Finished goods	$ 30,602	$ 44,264
Work-in-process	26,800	24,573
Raw materials	6,311	34,491
Total inventory	$ 63,713	$ 103,328

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Note 6 - Goodwill and Intangible Assets (Details Textual) $ in Millions	Apr. 02, 2017 USD ($)
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	$ 0.4
Finite-Lived Intangible Assets, Amortization Expense, Year Two	1.3
Finite-Lived Intangible Assets, Amortization Expense, Year Three	0.7
Finite-Lived Intangible Assets, Amortization Expense, Year Four	0.6
Finite-Lived Intangible Assets, Amortization Expense, Year Five	0.6
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	3.1
Gourmet Food and Gift Baskets [Member]
Goodwill, Impaired, Accumulated Impairment Loss	$ 71.1

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Note 6 - Goodwill and Intangible Assets - Goodwill by Segment (Details) $ in Thousands	9 Months Ended
	Apr. 02, 2017 USD ($)
Balance	$ 77,667
Goodwill reclassified to assets held for sale (see Note 4)	14,900
Balance	62,767
Consumer Floral [Member]
Balance	17,441
Goodwill reclassified to assets held for sale (see Note 4)
Balance	17,441
BloomNet Wire Service [Member]
Balance
Goodwill reclassified to assets held for sale (see Note 4)
Balance
Gourmet Food and Gift Baskets [Member]
Balance	60,226	[1]
Balance	45,326	[1]
Gourmet Food and Gift Baskets [Member] | Fannie May [Member]
Goodwill reclassified to assets held for sale (see Note 4)	$ 14,900	[1]

[1] The total carrying amount of goodwill for all periods in the table above is reflected net of $71.1 million of accumulated impairment charges, which were recorded in the Gourmet Food & Gift Baskets segment during fiscal 2009.

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Note 6 - Goodwill and Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Apr. 02, 2017	Jul. 03, 2016
Intangible assets with determinable lives, gross	$ 22,550	$ 32,229
Accumulated amortization	15,848	24,490
Intangible assets with determinable lives, net	6,702	7,739
Trademarks with indefinite lives, gross	54,739	71,261
Total identifiable intangible assets, gross	77,289	103,490
Other intangibles, net	61,441	79,000
Licensing Agreements [Member]
Intangible assets with determinable lives, gross	7,420	7,420
Accumulated amortization	5,911	5,832
Intangible assets with determinable lives, net	$ 1,509	1,588
Licensing Agreements [Member] | Minimum [Member]
Amortization period (Year)	14 years
Licensing Agreements [Member] | Maximum [Member]
Amortization period (Year)	16 years
Customer Lists [Member]
Intangible assets with determinable lives, gross	$ 12,184	21,144
Accumulated amortization	7,920	15,960
Intangible assets with determinable lives, net	$ 4,264	5,184
Customer Lists [Member] | Minimum [Member]
Amortization period (Year)	3 years
Customer Lists [Member] | Maximum [Member]
Amortization period (Year)	10 years
Other Intangible Assets [Member]
Intangible assets with determinable lives, gross	$ 2,946	3,665
Accumulated amortization	2,017	2,698
Intangible assets with determinable lives, net	$ 929	$ 967
Other Intangible Assets [Member] | Minimum [Member]
Amortization period (Year)	5 years
Other Intangible Assets [Member] | Maximum [Member]
Amortization period (Year)	14 years

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Note 7 - Investments (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2017	Mar. 27, 2016	Apr. 02, 2017	Mar. 27, 2016	Jul. 03, 2016	Sep. 27, 2015
Equity Method Investment, Other than Temporary Impairment				$ 1,728
Cost Method Investments	$ 1,700		1,700		$ 1,700
Euroflorist [Member]
Cost Method Investments	$ 1,500		$ 1,500		1,500
Flores Online [Member]
Equity Method Investment, Ownership Percentage	29.00%		29.00%
Equity Method Investments	$ 1,100		$ 1,100		$ 1,100	$ 2,900
Income (Loss) from Equity Method Investments	$ (100)	$ (100)	$ (100)	(100)
Equity Method Investments, Fair Value Disclosure						$ 1,200
Equity Method Investment, Other than Temporary Impairment				$ 1,700

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Note 8 - Debt (Details Textual) - USD ($) $ in Thousands			9 Months Ended
		Sep. 30, 2014	Apr. 02, 2017	Jul. 03, 2016
Credit Facility 2014 [Member] | Revolving Credit Facility [Member]
Proceeds from Lines of Credit			$ 200,000
Line of Credit Facility, Maximum Borrowing Capacity			100,000
Term Loan [Member]
Long-term Debt	[1]		113,563	$ 117,563
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year			1,500
Long-term Debt, Maturities, Repayments of Principal in Year Two			7,200
Long-term Debt, Maturities, Repayments of Principal in Year Three			10,100
Long-term Debt, Maturities, Repayments of Principal in Year Four			12,900
Long-term Debt, Maturities, Repayments of Principal in Year Five			15,800
Long-term Debt, Maturities, Repayments of Principal after Year Five			$ 66,100
Term Loan [Member] | Credit Facility 2014 [Member]
Long-term Debt		$ 115,000
Debt Instrument, Term		2 years
Debt Instrument, Number of Installment Payment			19
Debt Instrument, Principal Payment Percentage In Year One			5.00%
Debt Instrument, Principal Payment Percentage In Year Two			7.50%
Debt Instrument, Principal Payment Percentage In Year Three			10.00%
Debt Instrument, Principal Payment Percentage In Year Four			12.50%
Debt Instrument, Principal Payment Percentage in Year Five			15.00%
Debt Instrument, Principal Payment Due Upon Maturity			$ 61,800
Line of Credit and Term Loan [Member] | Base Rate [Member] | Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate			0.75%
Line of Credit and Term Loan [Member] | Base Rate [Member] | Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate			1.50%
Line of Credit and Term Loan [Member] | Federal Funds Effective Swap Rate [Member]
Debt Instrument, Base Rate, Basis Spread on Variable Rate			0.50%
Line of Credit and Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Base Rate, Basis Spread on Variable Rate			1.00%
Line of Credit and Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate			1.75%
Line of Credit and Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate			2.50%

[1] On December 23, 2016, the Company entered into an Amended and Restated Credit Agreement (the "2016 Amended Credit Agreement") with JPMorgan Chase Bank as administrative agent, and a group of lenders. The 2016 Amended Credit Agreement amends and restates the Company's existing credit agreement, dated as of September 30, 2014 (the "2014 Agreement") to, among other things, extend the maturity date of the $115.0 million outstanding term loan ("Term Loan") and the revolving credit facility (the "Revolver") by approximately two years to December 23, 2021. The Term Loan is payable in 19 quarterly installments of principal and interest beginning on April 2, 2017, with escalating principal payments, at the rate of 5% in year one, 7.5% in year two, 10% in year three, 12.5% in year four, and 15% in year five, with the remaining balance of $61.8 million due upon maturity. The Revolver, in the aggregate amount of $200 million, subject to seasonal reduction to an aggregate amount of $100 million for the period from January 1 through August 1, may be used for working capital and general corporate purposes, subject to certain restrictions.

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Note 8 - Debt - Summary of Current and Long-term Debt (Details) - USD ($) $ in Thousands		Apr. 02, 2017	Jul. 03, 2016
Deferred financing costs		$ (3,794)	$ (3,573)
Debt instrument, carrying amount		109,769	113,990
Less: current debt		6,469	19,594
Long-term debt		103,300	94,396
Line of Credit [Member]
Revolver	[1]
Term Loan [Member]
Term Loan	[1]	$ 113,563	$ 117,563

[1] On December 23, 2016, the Company entered into an Amended and Restated Credit Agreement (the "2016 Amended Credit Agreement") with JPMorgan Chase Bank as administrative agent, and a group of lenders. The 2016 Amended Credit Agreement amends and restates the Company's existing credit agreement, dated as of September 30, 2014 (the "2014 Agreement") to, among other things, extend the maturity date of the $115.0 million outstanding term loan ("Term Loan") and the revolving credit facility (the "Revolver") by approximately two years to December 23, 2021. The Term Loan is payable in 19 quarterly installments of principal and interest beginning on April 2, 2017, with escalating principal payments, at the rate of 5% in year one, 7.5% in year two, 10% in year three, 12.5% in year four, and 15% in year five, with the remaining balance of $61.8 million due upon maturity. The Revolver, in the aggregate amount of $200 million, subject to seasonal reduction to an aggregate amount of $100 million for the period from January 1 through August 1, may be used for working capital and general corporate purposes, subject to certain restrictions.

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Note 9 - Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Apr. 02, 2017	Jul. 03, 2016
Property, plant, and equipment, gross	$ 339,049	$ 387,301
Accumulated depreciation and amortization	(184,381)	(215,939)
Property, plant and equipment, net	154,668	171,362
Land [Member]
Property, plant, and equipment, gross	30,789	30,789
Orchards in Production and Land Improvements [Member]
Property, plant, and equipment, gross	9,564	9,483
Building and Building Improvements [Member]
Property, plant, and equipment, gross	56,407	54,950
Leasehold Improvements [Member]
Property, plant, and equipment, gross	11,378	21,584
Furniture and Fixtures [Member]
Property, plant, and equipment, gross	44,887	72,912
Computer and Telecommunication Equipment [Member]
Property, plant, and equipment, gross	53,609	52,737
Software and Software Development Costs [Member]
Property, plant, and equipment, gross	123,800	136,333
Capital Projects in Progress [Member]
Property, plant, and equipment, gross	$ 8,615	$ 8,513

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Note 10 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands		Apr. 02, 2017	Jul. 03, 2016
Trading securities held in a “rabbi trust”	[1]	$ 6,538	$ 4,852
Assets (liabilities) measured at fair value		6,538	4,852
Fair Value, Inputs, Level 1 [Member]
Trading securities held in a “rabbi trust”	[1]	6,538	4,852
Assets (liabilities) measured at fair value		6,538	4,852
Fair Value, Inputs, Level 2 [Member]
Trading securities held in a “rabbi trust”	[1]
Assets (liabilities) measured at fair value
Fair Value, Inputs, Level 3 [Member]
Trading securities held in a “rabbi trust”	[1]
Assets (liabilities) measured at fair value

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

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Note 11 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2017	Mar. 27, 2016	Apr. 02, 2017	Apr. 06, 2016
Effective Income Tax Rate Reconciliation, Percent	34.70%	37.60%	31.90%	31.70%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%	35.00%	35.00%	35.00%
Unrecognized Tax Benefits	$ 400		$ 400
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	100		100
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	$ 0		$ 0

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Note 12 - Business Segments - Segment Performance (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Apr. 02, 2017	Mar. 27, 2016	Apr. 02, 2017	Mar. 27, 2016
Net revenues		$ 233,715	$ 234,207	$ 954,097	$ 938,629
Contribution margin		13,332	14,742	145,429	143,674
Depreciation and amortization		8,492	7,546	25,656	24,279
Operating income (loss)		(16,285)	(13,236)	57,157	58,876
Intersegment Eliminations [Member]
Net revenues		(931)	(850)	(2,301)	(1,890)
Consumer Floral [Member]
Net revenues		124,684	113,182	297,707	280,956
Contribution margin		15,863	13,748	37,172	33,031
BloomNet Wire Service [Member]
Net revenues		24,091	22,517	65,557	63,740
Contribution margin		8,245	7,747	23,713	22,017
Gourmet Food and Gift Baskets [Member]
Net revenues		85,611	99,096	592,295	595,006
Contribution margin		(10,776)	(6,753)	84,544	88,626
Corporate Segment [Member]
Net revenues		260	262	839	817
Corporate	[1]	$ (21,125)	$ (20,432)	$ (62,616)	$ (60,519)

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

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Note 14 - Fire at the Fannie May Warehouse and Distribution Facility (Details Textual) - Fire [Member] - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 27, 2015	Mar. 27, 2016
Insurance Recovery Settlement	$ 55,000
Inventory Write-down	29,587
Other Nonrecurring Expense	5,802
Gain on Business Interruption Insurance Recovery	$ 19,611
Other Nonoperating Income (Expense) [Member]
Gain on Business Interruption Insurance Recovery		$ 19,600

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Note 14 - Fire at the Fannie May Warehouse and Distribution Facility - Costs Related to the Fire and the Insurance Recovery (Details) - Fire [Member] $ in Thousands	3 Months Ended
	Sep. 27, 2015 USD ($)
Loss on inventory	$ 29,587
Other fire related costs	5,802
Total fire related costs	35,389
Less: fire related insurance recoveries	(55,000)
Fire related gain	$ (19,611)