FLWS - 1-800-Flowers.com (FLWS) - Revenue Growth Expected On Top Of The Pandemic Lift

Fiscal Q3 exceeds expectations. Q3 revenues surged 70.1% to $474.2 million, well above our $404.8 million estimate. Adjusted EBITDA beat our expectations, $15.4 million versus $4.1 million estimate. The company benefited from solid growth in PersonalizationMall.com and 83% growth in Harry & David. Stronger than expected guidance for Q4. Management guided revenues to a range of 10% to 15% growth, with adjusted EBITDA of $25 million to $30 million. This was stronger than our revenue growth estimate of 6.7% and adjusted EBITDA of $18.2 million. The favorable revenue momentum reflects contributions from its recent acquisition PersonalizationMall.com, as well as growth in its Floral division. Raising fiscal 2022 expectations. Increases in its customer acquisition file, passport customers, and favorable growth expectations at PMall is expected to drive revenue growth in fiscal 2022. As such, we are raising our fiscal 2022 revenue estimate from $2.051 billion to $2.296 billion. We are raising our adj. EBITDA estimate from $192.2 million to $229.3 million. Ups its stock repurchase authorization. The board approved a $40 million share repurchase authorization, increasing from its previous authorization of $30 million. The company had $4 million left under its previous repurchase authorization. The company's balance sheet is strong with $256 million in cash which supports share repurchases and acquisition fueled growth.Compelling stock valuation. In spite of the 20% rise in the stock on the good news from the quarter, we believe that the shares offer a favorable risk/reward relationship. Near current levels, the FLWS shares trade at 8.6 times Enterprise Value to our upwardly revised fiscal 2022 adj. EBITDA estimate. We reiterate our Outperform rating and a $47 price target. Read More >>