FLWS - 1-800 Flowers stock soars over 20% after earnings

1-800 FLOWERS.COM ( NASDAQ: FLWS ) shares surged over 20% higher after exceeding analyst expectations in its fiscal first quarter and offering a solid full-year forecast on Thursday.

For the first quarter, a loss of $0.52 came in better than expected by $0.03, while only a mild deceleration in revenue from 2021 to $303.6M was also better than expected. The beat on the bottom line came despite a 720 basis point decline in gross margins. CEO Chris McCann credited the company’s Gourmet Foods and Gift Baskets businesses for the beats despite a slowdown in “everyday gifts” as consumers tighten belts.

“As we look out to the holiday season and the balance of our fiscal year, we are cautiously optimistic that consumers will spend during the major gift giving holiday occasions, while we anticipate they will remain guarded on their spending otherwise,” he commented. “Coming into Fiscal 2023, we expected a challenging macroeconomic backdrop to affect our performance during the first quarter. However, we expect to see a stabilization of our business during our second quarter and improvement during the second half of our fiscal year, as we cycle against the sharp inflationary period of a year ago.”

McCann added that the company is embarking upon a number of efficiency improvement initiatives to offset waning sales. For example, he said that inventory and operations improvements in the current fiscal year are expected to generate more than $75M in free cash flow, up from -$60M in the prior year. Additionally, adjusted EBITDA for the full year is anticipated to be in a range of $75M to $80M, above the analyst consensus of $65.7M.

Shares of the Jericho, New York-based flower and gift delivery company rose 22.17% in afternoon trading.

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