Why 1-800-Flowers.com Stock Wilted Today
Shares of 1-800-Flowers.com (NASDAQ: FLWS) headed lower today after the company posted a disappointing earnings report this morning. The stock closed down 12.1% on the news.
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1-800-Flowers comes up short
The online flower seller missed the mark on the top and bottom lines in the report. Revenue fell 9.5% to $360.9 million, which was worse than the consensus estimate of $374.4 million.
The company focused its attention on margin improvement and gross margin rose 130 basis points to 38.4% due to lower freight costs, a decline in commodity costs, and efforts to optimize logistics.
However, that wasn't enough to improve the bottom line as the adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss expanded from $6.6 million to $8.8 million.
Its adjusted loss of $0.34 per share expanded from a loss of $0.28 per share in the quarter a year ago and was worse than the consensus estimate of a per-share loss of $0.26.
CEO Jim McCann acknowledged overarching challenges with discretionary consumer spending, but said the company was able to grow EBITDA on a full-year basis, improved its gifting platform, and expanded into new categories, including its acquisition of Scharffen Berger Chocolate Maker, a high-end producer of craft chocolates.
What's next for 1-800-Flowers?
Looking ahead, the company expects its challenges to continue into next year, forecasting revenue growth between flat and a decline in the low single digits. It also sees adjusted EBITDA of $85 million-$95 million, which compares to $93.1 million in fiscal 2024.
Given those trends and the challenges in the consumer environment, it's clear why the stock is down today. Until the business returns to growth, the stock is best avoided.Should you invest $1,000 in 1-800-flowers.com right now?
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