Friday, September 01, 2023
For more than 45 years, 1-800-Flowers.com has offered truly original floral arrangements, plants and unique gifts to celebrate birthdays, anniversaries, everyday occasions, and seasonal holidays, and to deliver comfort during times of grief. Backed by a caring team obsessed with service, 1-800-Flowers.com provides customers thoughtful ways to express themselves and connect with the most important people in their lives. 1-800-Flowers.com is part of the 1-800-FLOWERS.COM, Inc. family of brands. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Exceeds EBITDA estimate. The company’s fiscal Q4 results were mixed with a “miss” in revenues, but nicely beating our adj. EBITDA estimate. Revenues declined 17.9% to $398.8 million, versus our estimate of $414.2 million. Gross margins substantially improved leading to a beat in adj. EBITDA of a seasonal loss of $6.6 million versus our loss estimate of $10.1 million.
Favorable margin outlook. We believe that a combination of lower ocean freight costs, moderating commodity prices, lower inventory write-offs, and a shift toward higher priced, higher margin products, all should allow the company to move gross margins from 37.5% in 2023 to 39.3% in fiscal 2024 and then to 39.6% in 2025. Our gross margin assumptions are conservatively below the pre-pandemic levels of 42.1% in 2019 and offer positive upside surprise potential.
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