Shares of 1-800-Flowers.com saw a decline of 12.1% today following the release of a lackluster earnings report this morning.
Shortfall for 1-800-Flowers
The online floral retailer failed to meet expectations in both revenue and profit metrics. Revenue dropped by 9.5% to $360.9 million, falling short of the anticipated $374.4 million.
The company concentrated on enhancing its margins, achieving a 130 basis point increase in gross margin to 38.4%. This improvement was attributed to reduced freight and commodity costs, along with efforts to optimize logistics.
Despite these efforts, the bottom line suffered as the adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss widened from $6.6 million to $8.8 million.
The adjusted loss per share grew to $0.34 from $0.28 in the same quarter last year, exceeding the consensus expectation of a $0.26 loss per share.
CEO Jim McCann acknowledged the broader challenges posed by reduced discretionary consumer spending. Nonetheless, he highlighted the company’s achievements, such as full-year EBITDA growth, enhancements to its gifting platform, and expansion into new segments, including the acquisition of Scharffen Berger Chocolate Maker, a premium craft chocolate producer.
Future Outlook for 1-800-Flowers
Looking forward, the company anticipates continued challenges into the next year, projecting revenue growth to be either flat or experience a low single-digit decline. They also predict adjusted EBITDA to range between $85 million and $95 million, compared to $93.1 million in fiscal 2024.
Given these trends and the current challenges in the consumer market, it’s understandable why the stock has fallen today. Until the company regains growth momentum, the stock may be best approached with caution.
