We have Personalization Mall, which was an acquisition, we have Personalization Universe, which was a de novo start-up that we did ourselves. And now with the addition of Things Remembered, which we’re particularly excited about. We just did our brand review out in Chicago with the team at Personalization Mall with the Things Remembered team, and we can really grow that business nicely. And there’s a perfect example, Michael, where we see the range of price points, the quality of the products that we can bring to a consumer under Things Remembered brand with its history. I was shocked to learn at one time they had 1,400 stores at their peak, which was striking to me. So what we did was we picked up IP that we can sit on top of infrastructure that we already have and grow it out in a very deliberate fashion, appealing to a broader range of customers, especially in that wedding and new baby space and, of course, holiday as well.
Michael Kupinski: Terrific. Thanks for taking my questions.
Jim McCann: Thanks for your interest, Michael.
Operator: The next question comes from Alex Fuhrman with Craig-Hallum. Please go ahead.
Alex Fuhrman: Hey, guys. Thanks very much for taking my question. And first of all, I just want to say, Chris, it’s been such a pleasure getting to know you over the years and I really hope you are back at 1-800-Flowers soon. I wanted to ask you guys about revenue growth, obviously, has been challenging here. What gives you confidence that it is a matter of when and not if you get to revenue growth? Are there any kind of new kind of product launches or marketing campaigns? I know you mentioned a big uptick in kind of multi-branded gifting, but would love to just get a sense of where that confidence comes from that revenue growth will resume at some point in the future?
Jim McCann: Well, we didn’t mean to sound confident, Alex — just kidding. The things that we point to internally are, the challenge has been in the everyday business, and I’ll ask Tom to give you some more color on that. The everyday business where it’s purely discretionary, we think, and we’ve seen historically that when it comes to the important milestone holidays, like Thanksgiving and Christmas at the end of the second fiscal quarter for us. It’s not really discretionary, there’s a discretionary element, but people you want to buy gifts were going to be there all the time. With the range of products we have, with the behavior of our Passport customer, which has become a very big and important part of our mix, and historical patterns that we can go back to.
So I think what — as Bill mentioned in his summary here, if you look back, pre-pandemic, we had 10 years of CAGR, compounded growth rate, obviously, of 12%. We — that was a combination of organic growth and some of the small acquisition — tuck-ins that we’ve done. As we look back over that time, we also had 42% gross margin during that same period, well, give or take 50 basis points year-to-year without it being a straight linear rise. So those are the two metrics we’re looking to get back to, but from a sales point of view, that will be an important ingredient. Tom, why don’t you touch on where you think we’ve anchored our forecast for the future and why we have that confidence.
Tom Hartnett: Yeah. So first, I mean, as we look into this 2024 year, we are expecting our sales to begin to rebound during the holiday period as we have seen better results during the holiday periods than the everyday periods, as Jim mentioned. We believe the user experience investments we’ve made, the increasing visibility of our family of brands, our extended array of products that Jim had mentioned earlier, that includes marketplace products and organic products, we continue to build beyond the acquisitions. And what we’re seeing is a deeper relationship with our existing customers, and we’re seeing good results and focus there, and we think we have a lot more opportunity as well as Bill mentioned that in the second half of the year, we will — we do have plans that will be increasing our marketing expense in order to drive more demand, again, as appropriate and prudent in the management.
We’ve all been here for many years, we’ve seen pullbacks in the economy, et cetera. And we think history is a great guide for us. So that gives us confidence that — we can’t predict when exactly the consumer is going to return, but we do see a lot of indications and other means where the consumers habits have returned from pre-pandemic levels. And so, that along with many other factors give us confidence that the consumer will return.
Alex Fuhrman: Okay. That’s really helpful. Thank you, guys, very much.
Jim McCann: Thank you, Alex.
Operator: The next question comes from Anthony Lebiedzinski with Sidoti & Company. Please go ahead.
Anthony Lebiedzinski: Good morning, and thank you for taking the questions. And, welcome back, Jim, and best wishes to Chris for a speedy recovery.
Jim McCann: Thank you, Anthony.
Anthony Lebiedzinski: So yeah — so I guess just a follow-up on the previous question. As far as the everyday gifting business obviously has been challenged. As far as main demand levers that you’re looking to put in place to get that business to do better. I know you mentioned some multi-branded bundles. I mean — as far as your comment about increasing marketing spending in the back half of the year, is there maybe perhaps a reason why you’re waiting until the back half to do that? Or — I know there’s a fine line that you’re looking to navigate there, but I mean if you can actually pull off better revenue with better — more spending, why not do it sooner?
Jim McCann: I think Bill will comment on that. But as we look at marketing efficiencies, Tom and his team are working on that all the time. We see veins of opportunity. And frankly, during this period, it’s — let’s be prudent, let’s keep our powder dry. Let’s continue to manage our costs as best we can. But the one place that we now have the ability to step on the gas pedal, frankly, is in marketing. And those plants take some time to build and the materials, plus there are some capabilities we have that we think we can build on top of that will come more fully online as we get closer to the end of this calendar year. So it’s a question of timing, when do you fire your guns when you have the best opportunity and frankly, by overspending now as we’ve seen some competitors in all different categories doing, we see themselves spending themselves into oblivion. And frankly, we’re quite happy to see them continue to do that.
Anthony Lebiedzinski: Okay. All right. That makes sense. Okay.
Bill Shea: Anthony, did you want to…
Jim McCann: Bill, you want to add something to that?
Bill Shea: Yeah. I just think the consumer is going to tell us a little bit more, too, as we get through the holiday period. This is our slow season to begin with, a lot of messages in the marketplace, the consumer is still struggling at this point in time. We always do better at the holiday, and we believe coming off the success that we’ll have this holiday, that will be the time for us to invest. But we’ll continue to monitor and operate this business efficiently based on what the macro trends are.
Tom Hartnett: We are always in market and iterating based upon where we see customer acquisition costs, segments, et cetera. So if there are veins, as Jim said, we will be taking advantage of those opportunities.
