Good morning, and welcome to the 1-800-FLOWERS.COM, Inc. 2Q21 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Joe Pititto. Please go ahead. Thank you, Grant. Good morning, thank you all for joining us today to discuss 1-800-FLOWERS.COM, Inc.'s financial results for our fiscal 2021 second quarter. Those of you who have not received a copy of our press release issued earlier this morning, the release can be accessed at the investor relations section of our corporate website at www.1800flowersinc.com. Our call today will begin with brief formal remarks, then we will open the call to your questions. Presenting today will be Chris McCann, CEO, and Bill Shea, CFO. Before we begin, I need to remind everyone that some of the statements we will make today may be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. For a detailed description of these risks and uncertainties, please refer to our press release issued this morning, as well as our SEC filings, including the company's annual report on Form 10-K and quarterly reports on Form 10-Q. In addition, this morning, we will discuss certain supplemental financial measures that were not prepared in accordance with generally accepted accounting principles. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in the tables accompanying the company's press release issued this morning. The company expressly disclaims any intent or obligation to update any of the forward-looking statements made in today's call and your recordings of today's call, the press release issued earlier today, or in any of its SEC filings, except as may be otherwise stated by the company. I'll now turn the call over to Chris McCann. Thanks, everyone. I apologize for the technical difficulties. It's good to have somewhat of a backup plan in place, and it's a heck of a way to kick off a celebration of a great quarter. Let's jump back in. As I started to say, this morning we are very, very pleased to report our highest quarterly revenue and profit in our company's history. This reflects the continuation of the momentum that we've been building over the past several years. This includes the accelerated revenue growth that we saw begin in fiscal 2018, continue through 2019 and into fiscal 2020, and accelerating further since the start of the COVID pandemic. Our record results for the quarter were driven by strong double-digit e-commerce growth across our gourmet food and gift basket brands, in our market-leading 1-800-Flowers brand, and in our newest market-leading brand, Personalization Mall. Our strong e-commerce growth, combined with excellent operational execution, enabled us to drive record-adjusted EBITDA and EPS results, despite the significant headwinds that we faced in the year-end holiday period, including what we're all familiar with, the increased labor and product shipping costs, as well as operating inefficiencies related to the ongoing pandemic. This is really a testament to the incredible hard work and commitment of all of our associates across the company to help our customers connect and express themselves in a very challenging environment. To step back and put our strong results and our positive view of our future in perspective, it's worth taking a look at the unique business platform that we've built. Over the past several years, we've made investments in our brands, our technology stack, our digital marketing and MarTech capabilities, our customer care platform, and our fast-growing customer file. In our brands, we've continued to roll out initiatives designed to deepen customer engagement, such as our weekly Celebrations Pulse letters to our customers from me and my brother Jim. These feature thoughtful tips, personal stories, all designed to help people stay connected and express themselves. It's creating a two-way dialogue with our customers. Also, our virtual experiential workshops that we've launched in collaboration with a wonderful young business, Alice's Table. These include immersive virtual events such as floral design and ever-popular charcuterie board building workshops, really fun classes that friends can do together even while being socially distant. Our Connection Communities portal. This is a peer-to-peer support community that helps guide people through meaningful life events by connecting them with others who have walked the same path. It's these and other such programs that are evolving our relationship with our customers, engaging with them beyond the transaction to really focus and build a community that fosters deeper brand engagement and loyalty. In terms of technology investments, we've built a culture of innovation, this enables us to stay at the forefront of new technologies that help our customers connect and express themselves. We've built a new headless commerce platform for our brands and for all devices. This is a microservices-driven platform that resides in the cloud, giving us significantly enhanced performance, flexibility, and scalability. Among the latest enhancements that we've deployed. Our new site search capabilities across our multi-brand website that enables us to show more cross-brand results on product collections for specific occasions or when our customers are using keyword search, significantly enhancing our cross-brand merchandising efforts. Just in time for the holiday season, we launched a completely new enterprise B2B commerce platform. This brings a variety of new capabilities designed to help our corporate customers stay connected with their work from home employees and their clients. One such feature is Smart Gift, which enables corporate customers to send gifts even when they don't have the recipient's home address. All we need is an email address, or we can utilize SMS. We recently tested a fully automated AI bot on Apple Business Chat that allows customers to interact with the complete AI natural language bot, maintaining and scaling our high standards of customer service, and we are now rolling it out across our website with excellent early results. In digital marketing, we've leaned into our effective programs in search, display, video, and social channels, expanding our reach, building our brands, all with analysis-driven optimization for enhanced results. We've continued to invest in our customer care platform with a laser focus on enhancing the customer experience. We've integrated an AI-powered intelligent virtual assistant that seamlessly combines artificial intelligence and human understanding to provide exceptional service for customers calling us with questions. We've rolled out our online customer service hub that lets customers view real-time updates on order status, gives them the ability to modify their orders, and offers a live chat feature. We also continue to invest in new customer acquisition to accelerate the growth of our customer file. In addition to the significant growth in new customers, we're seeing enhanced order frequency and retention in our best customer cohorts, specifically our Celebrations Passport members and multi-brand customers. Both of these cohorts continue to grow at strong double-digit rates. In addition to our internal investments, we've continued to identify and execute strategic and highly accretive acquisitions, such as Shari's Berries in August of 2019, and PersonalizationMall.com just this past August. With Shari's Berries, we bought the IP, the brand, the URL, and the customer list, no facilities or personnel. Because of the flexibility of our platform, we were able to plug Shari's Berries into our distribution networks as well as our marketing and merchandising programs, literally from the day that we closed the deal. We have taken a brand that was declining and losing money before we acquired it, to one that is now growing rapidly with strong bottom-line contributions. With PMall, we added a leading provider of personalized gifts and home décor to our platform, a whole new suite of products and capabilities that instantly makes us a leader in the fast-growing category. Most important, by leveraging our business platform, particularly our digital marketing expertise, we've already been able to significantly accelerate PMall's revenue growth and enhance its profitability in just the first six months that it's been part of our platform. Through the combination of our internal investments and our strategic acquisitions, we've successfully created a highly scalable and leverageable e-commerce platform that's built for growth. This platform will enable us to continue to drive growth both near and longer term as consumers are increasingly shopping online to solve for their connective and expressive needs. I'd like to turn the call to Bill to go over company specifics. Thank you, Chris. As noted, we achieved record top and bottom line results for our fiscal second quarter, despite the significant headwinds that we told you about as we headed into the year-end holiday period, including increased costs for seasonal labor, volume constraints from third-party shippers, higher shipping costs related to the holiday season, COVID-related expenses, and operating inefficiencies related to the ongoing pandemic. This was no small achievement, and all our associates across the company are to be commended for going above and beyond in a very challenging environment to help millions of our customers stay connected and express themselves to the important people in their lives. Breaking down some highlights from the quarter. First, in terms of revenue, total consolidated revenues increased 44.8%, or $271.6 million to $877.3 million, compared with $605.6 million in the prior year period. The strong growth was driven by e-commerce growth of 59.7%, including revenue contributions from PersonalizationMall.com, which we acquired in August 2020. Excluding PMall, total revenues increased 24.7%, and e-commerce revenues increased 34.6% compared with the prior year period. Gross profit margin for the quarter increased 100 basis points to 45.4%, compared with 44.4% in the prior year period. The gross margin improvement primarily reflects strong PMall gross margins and our successful efforts to reduce promotions during what is typically a highly promotional environment. These efforts more than offset higher costs associated with seasonal labor and third-party shippers. Operating expenses as a percent of total revenues was 28.6% compared with 28% in the prior year period. The slight deleverage in the quarter reflects several factors, including investments we have made in enterprise marketing personnel and programs designed to help drive future strong growth. The acquisition of PMall, which has higher gross profit margin but also higher operating costs compared with the overall company. The impact in the quarter of the higher investment income associated with our company's non-qualified deferred compensation plan, with the offset being compensation expense. Combination of these factors resulted in an increase of 48.4% or $53.6 million in adjusted EBITDA to $164.3 million, compared with adjusted EBITDA of $110.7 million in the prior year period. Net income for the quarter increased 53.3% or $39.5 million to $113.7 million or $1.71 per diluted share, compared with net income of $74.2 million or $1.12 per diluted share in the prior year period. Adjusted net income for the quarter increased 54.1% or $40.1 million to $114.2 million or $1.72 per diluted share. In terms of our segment results. In our Consumer Floral and Gift segment, which includes PMall, we grew revenues 163.9% or $189.7 million to $305.4 million, compared with $115.7 million in the prior year period. Excluding the contribution of PMall, total revenues in this segment increased 58.3% compared with the prior year period, as our 1-800-FLOWERS brand continues to expand its market-leading position. Gross profit margin in this segment increased 550 basis points to 44%, compared with 38.5% in the prior year period, primarily reflecting contributions from PMall. Excluding PMall, gross margins for the 1-800-FLOWERS brand increased 70 basis points. Segment contribution margin increased 319.3% or $34.8 million to $45.7 million, compared with $10.9 million in the prior year period, including a strong contribution from PMall. Excluding PMall, segment contribution margin increased 69.7% compared with the prior year period, illustrating the leverage in our business model. In terms of our BloomNet business, revenues grew 32.4% to $34.1 million, compared with $25.7 million in the prior year period. This reflected strong growth in wholesale products, including fresh floral and hard goods, as well as growth and significant order volumes from both the 1-800-FLOWERS brand as well as florist-to-florist orders. As we noted after our first quarter, the decision we made to help our florists back in the early days of the pandemic, including waiving membership fees and providing various products and services at reduced prices, continues to pay off as florists are buying more products and services from BloomNet, in addition to fulfilling increased order volumes, further expanding BloomNet's market share. Gross profit margin in this segment was 49.4%, a decrease of 180 basis points compared with 51.2% in the prior year period, primarily reflecting product mix. Segment contribution margin increased 32.9% to $12.1 million, compared with $9.1 million in the prior year period. In our Gourmet Food and Gift Baskets segment, we grew revenues 15.9% or $73.7 million to $538.3 million, compared with $464.6 million in the prior year period. Strong growth was driven by accelerated e-commerce growth of 27.1%, which more than offset lower wholesale gift basket orders for the holiday season and the loss of revenues associated with the closing of the Harry & David retail stores in fiscal 2020. Gross profit margin increased 40 basis points to 45.9%, compared with 45.5% in the prior year period. Segment contribution margin, as adjusted, improved 19.5% or $22.2 million to $135.5 million, compared with $113.3 million in the prior year period. This also demonstrates the leverage in this segment, which offset the aforementioned cost headwinds. Now turning to our balance sheet. Our cash and investment position was $370.6 million at the end of the quarter. It should be noted that due to the proximity of the holiday season, our quarter end, our accounts payable and accrued expenses were also at seasonal highs. With that said, our cash position is very strong, particularly considering the August acquisition of PMall, which we funded with $145 million in cash and $100 million in bank debt. Inventory was $89.4 million, compared with $68 million at the end of last year's second quarter. The increase reflects the acquisition of PMall and the growth in our business. In terms of debt, we had $185.9 million in debt with zero borrowings under our revolving credit facility. The strength of our balance sheet, with a strong cash position and low debt, combined with the untapped revolving line of credit gives us significant flexibility to continue to invest in our business platform and add accretive acquisitions like Shari's Berries and PMall. Regarding guidance. In keeping with our practice over the past several quarters, due to the significant uncertainty in the overall economy related to the ongoing COVID pandemic, we are providing guidance on a quarter-by-quarter basis. Regarding the current fiscal third quarter, based on the continued strong e-commerce growth momentum that has carried into January, we anticipate achieving total consolidated revenue growth for the fiscal third quarter, including contributions from PMall, in the range of 45%-50% compared with the prior year period. We anticipate that the strong revenue growth will help offset certain headwinds, including the Sunday day placement of the key Valentine's Day holiday, increased year-over-year labor and transportation costs, and operating inefficiencies related to the COVID pandemic. As a result, we anticipate achieving adjusted EBITDA of between $4 million and $5 million for the fiscal third quarter compared with an adjusted EBITDA loss of $2.4 million in the prior year period. In terms of EPS, we anticipate improving to a loss of between $0.09 and $0.11 for the quarter, compared with a loss of $0.15 in the prior year period. I will now turn the call back to Chris. Thank you, Bill. To sum up, again, we achieved the highest quarterly revenue and profit in our company's history. We had a tremendous holiday season with strong customer demand, truly incredible execution offsetting the headwinds that we told you about back in the fall, and I just can't say enough about how proud I am of how well our associates rose to the occasion during this very challenging environment. During the quarter, we saw a continuation of strong growth in new customers, increased frequency from our existing customers, more customers signing up to Celebrations Passport, and more customers buying from multiple brands. The strong growth and enhanced behaviors that we're seeing in our customer file give us the confidence in our outlook for continued strong revenue growth going forward. The strong momentum that we have been building for the past several years now in our top and bottom line results reflects the investments that we've made and continue to make in our technology stack, our digital marketing and innovative merchandising programs, our laser-focused initiatives in customer experience and customer care, and in strategic and highly accretive acquisitions. We have built a highly scalable and leverageable e-commerce platform that is designed and built for growth. We're confident that our business platform positions us well to continue to drive growth both near and longer term. Before I turn the call back to Grant to provide instructions for the Q&A portion of the call, I'd like to again thank all of our associates, as well as our vendors and suppliers for their hard work and commitment to helping our customers solve for their connective and expressive needs, sentiments that are more important than ever in today's environment. With that, I will turn the call back to you, Grant. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. First question today will come from Dan Kurnos with The Benchmark Company. Please go ahead. Thanks. Good morning, congratulations on the quarter. I thought the revenue number was a misprint. Just, Chris, look, the kind of the key here, I think, maybe just talk about PMall a little bit. I think it was some probably 50% higher, $120-plus million in the quarter, than where most people were expecting you to come in. I know there was a lot of underlying strength in e-com demands, we were talking originally when you bought this about non-complete integration by the holiday period. I know you were really pushing hard for it. Can you just give us some color around either cross-sell, about around any of the metrics or learnings you've had, and how much more do you have to do here to get kind of full integration if you're not there yet on PMall? I'm just trying to get a sense of where the growth rates on this thing can actually go. Yeah. Dan, thank you very much. We really couldn't be more pleased with the acquisition of PMall than we are right now. From an integration point of view, we did focus on some efforts early in the beginning, making sure that we got it up in one form or fashion on our multi-brand site, integrated the customer database so Passport customers would have access to PMall. We did some of those things. A lot of the integration is still yet to come. There was limited capabilities that we could do before we really hit holiday time, when then we would think the risk factor was too high to mingle with it at that time. The fact of how we've added that to our platform now, you'll see PMall products on the flower site for Valentine's Day this year, showing further integration. It's really given us great capabilities that we're starting to integrate across the company, across the brands, moves us into a whole new category for our customers. We really couldn't be more pleased with it and the progress that we're making. From an early point of view, one of the early areas that we said we were going to focus on from an integration was really on the marketing side of things and the digital marketing. There, we're really happy with the early first holiday season results helping to increase its growth rate. Bill, why don't you give a little more color on that? Dan, as Chris mentioned, we're tremendously pleased with the results of PMall. You were able to do the math. We like to leave a little math for you guys to do within the earnings call and the earnings release. The $122 million is a pretty accurate number. That is what we achieved. They were up 50% year-over-year. I think a lot of people had about $80 million in their models, and they did contribution margin of $25 million-$26 million. Significantly profitable business. We're extremely pleased with the results. A really good team of people there, Dan, that have been integrating well with us, meshing with our team. Really, it's a really strong operational team there we're very proud of. That's super helpful. Thanks, guys. Just as we look into calendar Q1, fiscal Q3 here, we know Valentine's Day is on a Sunday. You kind of pointed that out, which has been historically bad, but we have still, obviously, the lingering effects of COVID, everybody at home. Obviously, the guidance you've given is well ahead of where people are, too, and so we're seeing that momentum. Just trying to gauge, are you going to be able to, and I know it's probably not quite like Mother's Day, but is there some flexibility maybe earlier in the week around shipping dates and how you're kind of working around that? Right. As we looked at Valentine's Day, you're right, there's a day placement shift there. Bill will cover that in a minute. What we're looking at is the ability to change things around. Looking at this holiday season, instead of just the decrease that we normally would expect, we're such well-positioned right now as a company, much better than we were even a year ago. We're bigger, we're better, we have a stronger customer file, we have consumer demand, we have broader product categories. As we head into this quarter, even with that headwind, gives us the confidence for the guidance. Bill, why don't you cover that in a little more detail as well? Yeah. As we mentioned in our release and in the call this morning, we're providing overall guidance for revenue growth of 45%-50%. With the contributions of PMall, it still represents 35% plus organic growth. That builds in the impact of the floral brand and the Sunday day placement. Typically, when we move from a Friday, which is a great day placement for Valentine's Day to the weekend into a Sunday, revenue is usually impacted and decremented by about 20%. This year is certainly atypical due to the pandemic. Most recipients are not going to be in the office. We do anticipate that we're going to be able to achieve double-digit growth within the flowers brand. That combined with the very strong everyday gifting that we're seeing within the flowers brand, within our food brands, and within PMall leads us to the overall top line growth. On top of that, there's a lot of headwinds that we continue to face from a cost perspective, we're very pleased to be providing guidance of adjusted EBITDA improvement of approximately $7 million, turning what is typically an adjusted EBITDA loss quarter into a positive quarter. Therefore, we'll have four quarters positive for the year. Got it. Really helpful. Last one, if I could Chris, look, I get not wanting to give guidance, right, given the tough comp coming up and sort of just the uncertainties. I guess maybe if I just ask from a high level, you're now building what effectively is four straight quarters of challenging comps, but it seems like the business is just underlying accelerating. Should we just be thinking of this as kind of the new baseline for the business and we can kind of grow off of these levels? I think what you're seeing here is that the momentum we had going into the pandemic, the acceleration that we've got from the pandemic, decisions we've made to jettison the retail at Harry & David and double down and focus on e-commerce, the customer file that we've built, it's been a pivotal moment for us, for our company to really seize the opportunities that have been presented. I think you're right, Dan Kurnos. I think that we're in a much better position than we were a year ago. We're a bigger, stronger, better company, better assets. The additional acquisitions that we've done put us in place, and we're looking at a good growth rates going forward. Perfect. Thanks so much, and congratulations again, guys. Thank you. Our next question comes from Anthony Lebiedzinski with Sidoti & Company. Please go ahead. Yes. Good morning. Thank you for taking the question. In previous calls, you guys talked about the Friday placement of Christmas being beneficial. Did that kind of play out as you expected? Also just wondering, as far as I guess based on the strong results, it doesn't seem like it was much of an issue, but as far as third-party carriers. If you could just touch on that, as far as if you had any issues with FedEx or any of the other carriers, that'd be great. I think as we did the Christmas day placement, it was beneficial for us. It gave us two extra shopping days in the season compared to last year. That ramped up. Much of our volume really came in earlier than that last week than it normally does. That also gave us the capability to push the numbers a little bit. The 27% e-commerce growth that we got in the gourmet food brands, as an example, Anthony, was a little bit ahead of our expectations. We were able to achieve that. On the shipping distribution front, Bill, why don't you cover that? Yeah. I was going to reiterate with Chris, I think there were so many stories about shipping challenges that the consumer was trained to buy a little earlier, which did kind of create an earlier demand than we normally have. There wasn't that kind of the late push, which we would've otherwise gotten the benefit of with the Friday day placement. There certainly will continue to be challenges within the shipping environment. We had to go into the quarter planning for volume constraints with it, and we managed very well. We have a great partner in FedEx that does a significant amount of our shipments, and we work with them daily on any of the challenges that we have. We did have increased costs, and we had to absorb those within that. I think increased shipping costs are the new normal. The third party carriers have instituted what essentially are permanent surcharges. They start off with, first was COVID surcharges, then it became holiday surcharges. Now we're past holiday, we have a new set of surcharges. Increased shipping costs is the new normal. We all have to adjust for it. I think we've done a very good job. I think we've historically demonstrated our ability to absorb challenges that we have with regard to whether it be shipping costs or increased labor costs and build it into our plans, automate certain things to help offset these items. Got it. Yeah. Thanks, Bill and Chris. Is there any way you can quantify these higher labor and transportation costs, higher shipping costs? Any sort of ballpark estimate as to how much that impacted the quarter? They're significant, Anthony, but bottom line, I think they're here to stay. It's not like they're gonna go away and all of a sudden we're gonna have these positive comps in those areas going forward. We're gonna have a $15 minimum wage rate across the country. Now, we've operated in that environment already in Oregon as they've stepped up towards that $15 rate. In other locations, we don't have that, but because of supply and demand on labor, we're already paying very close to those rates. These are here to stay. Increased labor costs, increased shipping costs are here to stay. We have to continue to invest to automate what we can in the manufacturing and distribution side of our business so that we're less reliant on that seasonal labor force. These are the things we do. Each year, we're faced with challenges, both short-term and long-term, and we address them and continue to grow both top and bottom line. All of that, Anthony, is part of the reason why we're really pleased to provide the guidance for Q3 of a nice improvement on the bottom line that was showing taking it from a loss to a positive in this quarter, even with those new increased costs. Got it. Thank you. The last question for me to just give us a sense as to the order volume versus AOV quarter. Yeah. Bill, go ahead. Cover the AOV. Yeah. AOV was up a couple of points during the quarter. The e-commerce growth was mainly driven by volume. Got it. All right. Well, thank you guys, and best of luck. Thanks, Anthony. Our next question will come from Michael Kupinski with Noble Capital Markets. Please go ahead. Questions and congratulations. Some companies would have problems scaling to the level of revenue growth you've achieved over the last past year, I think it's a great testament to you and your team to successfully handle that type of revenue growth you've gotten. Congratulations. Thanks. My question is going back to the seasonal labor and the cost there. As you mentioned, you had some markets that already implemented a $15 minimum wage. I was just wondering in terms of how in those markets, how competitive it's been. Have you been able to get labor at $15 an hour, or do you have to raise your wages higher than that? In those markets where you have not seen the minimum wage, I know given the competitiveness of what you see for seasonal labor, I'm just trying to get a sense of how the minimum wage has impacted your seasonal labor hiring and the cost for seasonal labor in the markets that you've already seen that. I'll give two examples. Oregon is a minimum wage state. It's not at $15 yet, but it's phased up towards $15. Every year we get a step up in what the minimum wage is, and we pay above that. Another big state where we have a lot of employees is not a minimum wage state or has not been. However, as you mentioned, Southern Ohio is kind of the distribution capital of the world, so it really becomes more of a supply and demand issue, which drives higher wages in that market. It is tough to get employees. I think we have said this before, that when the unemployment a year ago was at 3.5%, and then at the beginning of the pandemic, it jumped to double digits, we anticipated that labor would be not as much of a challenge going forward. As unemployment came down, but because of the COVID environment that we're operating in, labor was still tough to get. Supply and demand still drives higher wage rates. Our answer to that is we need to bring that labor in. We need to pay what the market rates are that drive that. We continue to invest in automation. We have big projects. Some of them were stalled during the pandemic. We've launched some big automation projects going forward, and that's going to allow us to be less reliant on the seasonal labor force. No, I think, Michael, to your comment and your compliment in the beginning of your question about the scalability of our business, in addition to focusing on the scalability that I referenced in my opening remarks regarding scalability of our IT platforms, we're looking at the full platform, including our manufacturing and distribution platforms, and making the appropriate investments there to scale into the future to handle the demand that we see. Thank you for that. In terms of PMall, kind of going back to the significant amount of space and facilities that you've acquired there, can you talk a little bit about your plans now? I know you haven't been into PMall that much, but you still have such a large facility there. Have you thought about the integration on the facility and how you might use the facility at this point? We've begun some discussions on that, Michael. No rock-solid plans there yet on how we utilize that facility further than what it is currently being used or how we integrate some of the personalization capabilities into some of our other facilities as well. Again, looking to move that product line closer to the customer around the country. As we talk about investing into this distribution and manufacturing assembly capabilities of our business, those are the things that are in consideration now, but no hard plans in place at this point. My final question is about gross margins. You said that it benefited from reduced marketing spend. Of course, this could be because of your scale and your broad platform, but it also may just be due to the fact that you're just seeing e-commerce sales being very strong. Can you provide some color on your decrease in marketing spend in the quarter? What do you believe will be the sustainable gross margins going forward? Just kind of give us an idea about whether or not you're currently just benefiting from the platform of adding more onto your platform and not really seeing the type of incremental increases in marketing spend. Mike, Michael, I think as we look at the marketing spend here, as we look at last year, we had extremely low marketing costs as we went into the pandemic. We're seeing those marketing costs return to normal. Because we're seeing effectiveness, we continue to lean into the growth rate. We continue to lean into new customer acquisition with the marketing spend. As long as we're getting the proper return on ad spend, we'll continue to push that. How that might impact gross margin, Bill? Yeah. Let's just be clear when we're talking about marketing spend. What affects gross margins is promotions and discounting. The actual marketing advertising spend sits in operating expenses. What we saw in the second quarter was a reduced level of promotions in what is normally a very promotional environment. We were able to pull back on promotions in the quarter, and that helped offset a bunch of the headwinds that we've talked about with regard to seasonal labor and transportation costs and operating inefficiencies because of the pandemic, which allowed us to produce better gross margins year-over-year. As we reported, gross margins were up 100 basis points for the quarter. PMall was a nice contributor to that because they have high gross margins. Without PMall, we're still flat with gross margins, but even that was a bit of a mix because we saw better margins on the 1-800-Flowers brand. We saw better margins within the food brands, but because the floral brand grew higher and traditionally has lower gross margins, that mix blended to the overall 44%. I think what we see going forward is we're going to continue to, we started to do this before the pandemic, was be less promotional. We want to get our messaging out about our products and our brands and be less promotional. I think we will continue to be less promotional going forward, which is going to help gross margins and help offset those ongoing headwinds that we have on course. From a marketing side, we actually did, as Chris mentioned, we actually leaned into it a little bit. We're getting a good return on that. We'll spend some more dollars to help drive growth, both revenue growth as well as customer file growth, because we think that bodes well for the future. Bill, thanks for that added color. Appreciate that. That's all I have. Congratulations again, everyone. Thank you, Michael. Our next question will come from Linda Bolton Weiser with D.A. Davidson. Please go ahead. Hi. Thank you. Not to rain on your parade here because it's a great quarter. Congratulations. Your organic sales growth is decelerating from when the pandemic started, although you are guiding to a re-acceleration next quarter. Can you give us some color or some feel on why the growth rate would be decelerating? Is it just as the world reopens, there is just simply less need for remote gifting? What is the phenomenon that's going on? Why would your business really slow at all here, even though it was a very high growth rate, which can't be expected to continue, but the growth rate has slowed a bit. Can you give a little bit of color? Linda, after we significantly outperformed the consensus revenue numbers, you have a but. The bottom line is the second quarter is different than the rest of the quarter. I think we guided as we went into the quarter saying, we have volume restrictions that the third-party carriers have put on all e-commerce companies. We have to live within that. The tremendous growth in overall industry e-commerce has put a lot of pressure on the third-party carriers. They outlined, starting back in the summer, there've been tons of stories about that, about the constraints and the pressure, the on-time delivery of the third-party carriers was suffering. They put restrictions on it. We've talked about some of the labor challenges that all companies are having in this environment. The ability to produce all the inventory to ship out, even if there weren't volume constraints from the third-party carriers. Those is what impacted the second quarter. With that said, we had a tremendous second quarter, right? When you look at that, Bill, first of all, you can't look at us as a quarter-to-quarter sequential business, right? Because of the seasonality of our business, and certainly, Linda, you understand that. As we look at the gourmet food category, for example, was where we had most of the restrictions that Bill just mentioned. We grew e-commerce there 27%. Certainly, a real strong result in what's our largest quarter led by the gourmet food category. One of the other areas that we said in our last call when questioned where could there be some upside in the business for the fiscal Q2, calendar Q4, we said, "Well, we don't probably see a lot of upside in gourmet food." We did get some, but where we saw upside was in consumer floral, where it continues to grow, and there certainly has been no deceleration in consumer floral growth as we've gone forward here hitting about 58- 58% in the quarter. 58% in the quarter. BloomNet hitting 33% growth. I'm not sure really what you're seeing in deceleration. Great. Can you remind us when you come up against that comparison of 54% organic growth in the June quarter, when the pandemic hit, was the demand sort of coming, did it come late in the June quarter last year, or was it right from the get-go in April, as soon as the pandemic hit, you had strong growth really throughout the quarter? Is there any way you can remind us about how that worked last year? Yeah, no, it was strong right from really from day one. Actually, what we saw is, initially, a little hold on the floral side of the business, but the food took off right away. Certainly, with Easter being April 10th or 11th, even floral bounced right back, and we had very strong growth in the month of April, and that continued throughout the quarter. I think it's important to note that as we look forward and as we come up to some of those next quarters, are the comps going to be difficult? Sure, they're going to be difficult. Everybody recognizes that and understands that. I think the fact that you have to look at our business, as I mentioned earlier, this has been a pivotal moment for our business going through this pandemic, the way we responded to it, the way we reacted to it, the momentum we had going into it. When we look forward, we see ourselves as a much bigger, much stronger, better-positioned company, and we look at the trends that we're seeing. There's been a seismic shift of offline to online sales that we are just so well positioned for. There's the shift of consumer sentiment out there that we've all learned the need to express and connect. Our business obviously is well positioned for that. The third big trend that we see is the trend of nesting. That's not going away either. I think we were well positioned for that trend to begin with, but now with the addition of PMall, it's even better. Again, our focus as an e-commerce company, keep in mind in Q2, we also lost a lot of revenue from the decision we made on the retail stores that we didn't have this year in Q2. We got to factor that into our growth rates. That just keeps us laser-focused on what we're doing, how we're building our customer file. Will we grow in the future? Yes. Okay. Thank you very much. Our next question will come from Doug Lane with Lane Research. Please go ahead. Yeah. Hi. Good morning, everybody. Just on that note of the retail stores here, Chris and Bill, I had in my model that was about $20 million of revenue to you guys that is not there this year that was there last year. Is that about right? That's about right. The wholesale. Wholesale was down as well, as we guided people to going into the quarter. Okay. Fair enough. Getting back on the floral, PMall obviously blew away my numbers, but also the organic growth at floral was pretty astounding. To your point, Chris, I wondered if you could step back and give us some color on the retail landscape at floral. I know a lot of flower shops around here are closed. I don't see them coming back. Is there just a permanent dislocation going on at floral, or how do you view the whole retail market a year from now or so when we come out of the COVID thing? I think what we're seeing and the help that we're seeing in BloomNet, Bill really referenced, Doug, what we saw in the benefits that we're seeing in BloomNet from the aid that we gave in the early pandemic. I think as we look at the retail florist industry, there's always a different number of closings, and certainly many shops have been hit harder by the pandemic than others. Again, we're fortunate that as an industry, we've been well-positioned during this pandemic. Even while orders have shifted from offline to online, it still is benefiting the BloomNet partners for us from a fulfillment perspective. What we expected last summer was a little bit more of a challenge of shops closing up. It hasn't been what we expected. There are those situations, those unfortunate situations in every town. I would say we have not really seen that acceleration there on the retail store side. As we look at our distribution capabilities, we continue to see the benefits of our franchise shops, our BloomNet shops, as well as our direct ship capabilities. Having that flexibility in the network works very well for us, especially as we manage the high volume holidays like Valentine's Day coming up. Okay, that's helpful. Just one more thing. You talked about your balance sheet, it's getting a lot better. You're getting all this cash in from the December quarter. Obviously, the acquisition strategy is on point, Shari's Berries, Personalization Mall, and that's what you guys do, but acquisitions, as you know, are difficult to time. What else can you do with the financial strength here as far as stock buyback, as far as reinvestment in the business, CapEx, additional marketing? Just what's sort of the backup plan pending the next acquisition? Yes. Thank you, Doug. First and foremost, I think we've always been proven to be very good stewards of our balance sheet. We utilize our balance sheet to drive investments in our existing business. As we talked about, some of the investments Bill highlighted a moment ago, certainly around the scaling up the operational capabilities of the company, implementing automation, et cetera, investments in technology that we like to make. As you pointed out, I think we've proven very capable and adept at acquiring companies and integrating them. You're right, you can't predict timing on that, unfortunately. Also, I think we've been very diligent in our approach, and we'll continue to be very diligent in our approach on the M&A aspect. I think that's how we're looking to utilize our cash in general. Bill, why don't you speak to buybacks, et cetera? Yeah, we still, our kind of our stated strategy is that we're going to buy back shares at a level designed to draw any sort of share creep. We did in the first half of the year, spend about $12.5 million and bought back about 550,000 shares, actually, at a price of $22. I guess we're pretty good stock pickers too. If you look at the denominators in our EPS calculations, you'll see that our share count is slightly down year-over-year. We are effectively implementing that strategy. Okay, that's helpful. Doug, our goal at the end of the day is to put our under-leveraged balance sheet to work for our shareholders, primarily through acquisitions that help us accelerate our growth. Fair enough. Thanks, everybody. Thank you. Again, if you have a question, it is star, then one. Our next question will come from Tim Vierengel with Northcoast Research. Please go ahead. Thank you. Just one question for you guys. From my notes, I think you guys cited like a 40%-50% growth in that kind of customer profile or portfolio during that pandemic shutdown quarter back in June last year. If you look at the e-commerce growth rates, it's above that number. Clearly you guys are getting some leverage on the multi-brand customer front. Can you guys speak more specifically about what you're seeing from both Passport and the percentage of people in your portfolio buying from multiple brands? Tim, thank you very much. As we look at the customer file overall, you referenced some earlier numbers from the earlier days of the pandemic. Even I think we see that growth in our customer file continue. As we mentioned, we'll continue to invest into new customer acquisition when and where we see the opportunities. This past quarter, I think we grew new customers north of 50% over last year. Not including PMall. Not including, right, just kind of from an organic perspective. I think that continues. In addition to that, as you point out from our remarks, we're seeing good increases in retention and frequency, especially from our top cohorts, whether it be our top decile customers, our Passport members, customers buying from more than one brand. What's very encouraging is during this time period, we're seeing new customers convert into Passport at a higher rate than average and a higher rate than previous. New customers become multi-brand customers at a higher rate than average and a higher rate than we have been previously experiencing. We continue to grow that file. We have said previously that multi-brand customers were accounting for about 10% of our 12-month active file. We're not forecasting that, but that is growing, and that is increasing as time goes on very nicely. We look at our customer file, we look at those behavior metrics, we look at what's happening to the new customers that have come on during the past year and see their behavior is slightly than the average. We see that as very encouraging. No, I appreciate that color. I was wondering, looking deeper into the customer profile, if you guys could give us an indication whether those new customers are skewing younger or older, maybe as older people get more accustomed to buying e-commerce wise. I know there's been some talk about younger consumers shying away from using a service like you guys. Just some color there would be great as well. Yeah, we're seeing good customer traction across the demographics, and each one of our brands may vary a little bit, slightly from one to the other. Doug, if we look at the Flowers brand, Flowers brand really follows the population more than anything else from a demographic breakdown. With our prowess in digital marketing, we continue to attract younger customers. Some of our new product lines like the Jason Wu Wild Beauty line, our plants category is attracting new and younger customers as well. If we shift over to the gourmet food side, we've been saying for a while, the fastest-growing product category that we have in Harry & David is our gourmet food line, and that's coupled with our digital marketing efforts. That naturally invites a younger audience to the mix there as well. I would also say that there's reports coming out right now that's saying with this shift from offline to online, the biggest category that's shifting offline to online is baby boomers. That's been the core of our business for a long time, so that benefits as well as we look to the future. All right. Thanks, guys. Our next question will come from Alex Fuhrman with Craig-Hallum. Please go ahead. All right. Thanks very much for taking my question, guys, and congratulations on a terrific quarter and a terrific calendar year. I wanted to ask about, I guess, sort of the pace of revenue growth as well. I would imagine it sounds like a lot of the reason that your growth rate in percentage terms probably came back a little bit in the holiday quarter is just the law of large numbers, given how big your base of business in. As we're kind of looking into the March quarter, where obviously you're guiding to revenue growth, re-accelerating it to a very strong rate, it crosses my mind that it looks like, I think last year in the March quarter was, I believe, a record quarter for you guys in terms of Consumer Floral, and obviously Valentine's Day, I imagine, drove a lot of that. Can you kind of give us a sense of how much room is there to continue to grow on the floral platform, given that that becomes really your workhorse brand for the Valentine's Day and Mother's Day seasons? Can you give us a sense of how much growth potential there is in the years to come during those peak holidays if the demand is there? Alex Fuhrman, thanks for the question. We've built into our guidance for the third quarter of what we could do at Valentine's Day for the 1-800-FLOWERS brand. Normally under normal conditions, Valentine's Day would take, moving from a Friday to a Sunday, there would be a 20+% decrement in revenues, and we do think under the current circumstances, we're going to be able to grow that double digits. That's all built into our plan. We did have a very strong third quarter a year ago. We had a 10% growth at Valentine's Day a year ago. I think we were tracking at around 10% for most of the quarter. What I mentioned before, the outset of the pandemic, consumer floral dropped a little bit at the end of March and then picked right back up in April very strongly. We're continuing to build out our infrastructure so that we can handle the growth, not only every day, where we have kind of unlimited capabilities to grow, but also at the peak times, so that at holiday time in December and at the peak floral holidays of Valentine's Day and Mother's Day, that we're going to be able to continue to handle the increased demand that we anticipate. That's terrific. Thanks very much, Bill. There being no further questions, this will conclude our question and answer session. I'd like to turn the conference back over to Chris McCann for any closing remarks. Again, thank you everyone for joining us today. As we celebrate a record quarter for us in terms of revenue and profits, something we're very proud of. Very proud of the team and how we've managed through this process during this very challenging time. Thank you. If you have any further questions, don't hesitate to call us. We'll be glad to handle those questions. Of course, as we've talked on the call, don't forget Valentine's Day is right around the corner. We have some great opportunities. We have some multi-day gifting capabilities for you to make sure you're saying I love you on numerous days, not just one day. Get your orders early, and remember, this year, there are no limits on love. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.