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DA Davidson maintained its underperform rating on 1-800-FLOWERS.COM (NASDAQ:FLWS) with a steady price target of $8.00. The firm's position comes in anticipation of the company's financial report set to release on August 29th before the market opens. The analysts cited data from Bloomberg indicating that the company's sales have declined more than expected.
According to this data, sales in the fourth fiscal quarter of 2024 decreased in the mid-teens percentage range year-over-year, while the consensus estimated a 6% decline.
Further, the early data for the first fiscal quarter of 2025 suggests a 10% year-over-year sales drop, which is steeper than the consensus forecast of a 5% decrease. These figures have led the analysts to predict that the upcoming fiscal year 2025's gross margin increase will be less significant than the 260 basis points rise estimated for fiscal year 2024.
The firm also voiced concerns that 1-800-FLOWERS.COM's EBITDA guidance might fall short of the current market consensus, which anticipates a 4% year-over-year growth.
DA Davidson has indicated that the $8 price target, which is predicated on five times the calendar year 2025 estimated EBITDA of $106 million, is subject to review following the release of the company's financial report. The forthcoming earnings announcement will provide further insights into the company's performance and outlook, potentially impacting the firm's assessment.
1-800-FLOWERS.COM has been the subject of financial discussions due to its revenue and earnings results, as well as analyst adjustments. The company reported a 9.1% decline in third-quarter revenue and a net loss of $16.9 million. Despite this, the company has seen improvements in e-commerce revenue trends and gross margin due to cost optimization and lower commodity costs.
DA Davidson downgraded shares of 1-800-FLOWERS.COM from Neutral to Underperform, adjusting the price target to $8.00 from the previous $9.00. The firm cited concerns over weaker-than-expected sales trends and potential underperformance in the upcoming fiscal quarter.
In response to ongoing sales decline, 1-800-FLOWERS.COM has reduced its workforce, which is expected to decrease general and administrative expenses by approximately $10 million annually starting in the fourth fiscal quarter of 2024.
As part of recent developments, the company also acquired Card Isle, aiming to boost its personalized greeting card offerings. These are the recent developments for 1-800-FLOWERS.COM.
InvestingPro Insights
As we approach the earnings release for 1-800-FLOWERS.COM, the InvestingPro platform provides a nuanced picture of the company's current financial standing. Recent data indicates a market capitalization of approximately $595.23 million, which reflects the company's valuation in the market. Despite a challenging sales environment, with a reported revenue decline of 11.19% over the last twelve months as of Q3 2024, InvestingPro Tips suggest that net income is expected to grow this year. This contrasts with analysts' expectations of a sales decline in the current year, highlighting a complex financial landscape.
Investors should note the volatility in the stock price, with a one-year price total return of 28.39%, showcasing the potential risks and rewards associated with investing in the company. On the balance sheet front, the company operates with a moderate level of debt and has liquid assets that exceed short-term obligations, providing some financial stability. Despite not being profitable over the last twelve months, analysts predict the company will turn a profit this year, indicating a potential shift in financial performance.
For those considering 1-800-FLOWERS.COM as an investment opportunity, the InvestingPro platform offers additional insights with more InvestingPro Tips available to guide decision-making. With the next earnings date slated for August 29th, these insights could be pivotal in assessing the company's future trajectory.
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