Friday, February 02, 2024
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.
Adj. EBITDA exceeds expectations. The company had a solid Q2, even though revenue of $822.1 million was below our estimate of $830.1 million. Adj. EBITDA of $130.1 beat our estimate of $127.9 million, by 1.7%. Notably, the company’s cost reduction efforts and easing commodity costs have driven year-over-year gross margin improvement for 5 consecutive quarters.
Favorable margin outlook. The company reported strong gross margins of 43% in Q2, an improvement of 230 basis points from the prior year period. The favorable gross margin improvement was driven by lower in-bound shipping, labor and commodity costs. Notably, the company has made significant progress in returning gross margins to pre-pandemic levels in the low 40% range. Management indicated that there is still opportunities for moderating commodity prices.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.